Subject: [NEXTEL-1] What Agencies Think Of Search Consultants

From: [email-masked]
Date: Mon, 04 Aug 2003 23:38:55 -0400

What Agencies Think Of Search Consultants
August 04, 2003
By JENNIFER COMITEAU

Exclusive Survey

Ad agencies used to deal with clients directly in reviews. Then search consultants
arrived on the scene. As they became fixtures in more and more pitches, their
power as facilitators grew&#x2014but so did the perception that many of them serve
as little more than roadblocks in the process. Agencies have traditionally stayed
mum on the subject for fear of reprisal. But for this exclusive Adweek survey, the
chance to respond anonymously gave agency execs a valve to let out some of this
simmering resentment.

"Wackos," "snobbish," "biased," "arrogant," they railed, relishing the opportunity
to describe each consultancy in a word or phrase. "Prehistoric," "looney toons,"
"clubby," "naive." One respondent, clearly having been through the wringer with
one consultant in particular, decided, "a root canal is more fun."

This creative assortment of negatives is partly the result of cathartic release.
Positive remarks were sprinkled throughout, too ("honest," "thorough and fair,"
"professional," "supportive"). But a basic truth remains: Many agency executives
feel search consultants are usually more of a hassle than a help in reviews.

"I think more than any other single [factor], the search consultants have damaged
advertising," says one New York agency CEO. "They bring a lot of things to the
table, but nothing good."

And they're not going away. For better or worse, search consultants are brokering
more client/agency relationships than ever before. Based on polling of 273 U.S.
companies with ad budgets of $10 million or more, a new survey by New York-based
research consulting firm Ballester Inc. for the American Association of
Advertising Agencies indicates that 29 percent of those clients use consultants in
reviews. According to Adweek reports, the percentage is rising: In 2002,
consultants ran about 27 percent of the reviews where accounts were worth $20
million or more. This year, the figure is up to 39 percent. Many big-agency
executives say consultants oversee 50-60 percent of the contests in which they
participate.

"The bigger you are, the bigger accounts you are pitching, the higher percentage
of consultants involved," says Jon Bond, co-chairman of New York-based Kirshenbaum
Bond & Partners.

Search consultants, which earn $60,000-100,000 per review, are sometimes credited
with expediting pitches and providing intelligent commentary on shops' strengths
and weakness. But many are roundly criticized for acting as barricades and sending
out long, time-consuming RFPs. And as the search-consulting business itself
becomes more competitive, the firms are becoming ever more demanding, agency
executives say. "There's a feeling that what consultants are doing is garnering a
lot of information that's not germane to the pitch to fill up their own databases,
and that's pretty shitty," says one executive.

Search consultants, of course, reject the criticism. "Obviously, every agency
would prefer to get a piece of business without going through a formal review,"
Pile and Co. managing partner Judy Neer told attendees at the 4A's inaugural
new-business summit in June, where the Ballester findings were presented. "But if
there is a formal review, our experience says that agencies would prefer to have a
consultant in place. We eliminate the random violence that can occur when clients
handle reviews themselves. We ensure a level playing field. We make clear at the
beginning of the review exactly what you need to do at each step of the process
and how you will be evaluated."

Some agency leaders suggest consultants are taking the heat for agencies'
shortfalls. "There's too much blaming going on for deficiencies of talent in this
business," says Tom Carroll, president of the Americas for TBWA Worldwide. "The
whole search-consultant gripe is overblown. It's another advertising gripe that's
not grounded in substance. If you are a good agency and have smart people who do
good work, a good client sees that."

Adds Deutsch CEO Donny Deutsch: "We're necessary bed partners. If you understand
the job these guys have to do, understand that they have to present a handful of
good agencies to clients, in the end you'll do well."

Still, some executives say that no matter how good their work is, consultants are
the reason they're being paid less. The charge is that since most consultants earn
their revenue primarily from marketers, they try to prove their worth by saving
clients money.

Deutsch, who split with Pfizer this year after year-long fee negotiations with
client procurement executives failed, appealed to consultants at the 4A's
conference to remember what they're in business for. "You're not divorce lawyers,
you're marriage counselors," he said. (The client is said to have asked the shop
for salary and other normally confidential information.) In their zest to save
clients like Pfizer a couple of million dollars, consultants will end up costing
clients so much more, Deutsch said.

"It's always inappropriate to share salary information. You don't have to do it,"
4A's president and CEO O. Burtch Drake told attendees at the group's summit. "Our
industry needs to toughen its spine and stop taking so much crap from advertisers
and consultants."

During reviews, Deutsch insists, shops shouldn't let clients out of the room until
basic compensation is determined. "No business in the world should be expected to
compete if they don't know what to expect," says Deutsch. "You're an idiot if you
do. We can control this. Have some self respect and some dignity."

A similar complaint was fielded this year by some shops that competed in the
Nextel review, run by Roth Associates. "It was absolute hell," says one executive.
"They hired Roth to run the review, but it was almost managed by the procurement
people. They asked for a lot of financial information that wasn't appropriate."

Roth principal Dick Roth admits Nextel's review was more rigorous than some
others, but he says it had nothing to do with money. "The client said their
purchasing people would be involved," he says. "It's a trend going on. It did make
it more detailed and more elongated than it needed to be."

For this survey, Adweek chose to look at some of the most active consultancies,
with consideration of location and size and scope of reviews they handle. To get a
sense of which consultants are doing it right and which aren't, we sent a
questionnaire to the 75 largest shops in the U.S. Responses came back from either
the CEO or the new-business director at 30 shops, or 40 percent of the group.

We queried agencies on seven topics: which consultants are the most organized;
which understand agency cultures the best; which broker the best agency/client
marriages; which are the most unbiased; which most respect agencies' time and
money; which facilitate interaction the best; and which are the easiest to work
with on a personal level.

The responses were kept completely anonymous. (See opposite page for an
explanation of the methodology.)

On Organization

Reviews are logistical nightmares. A key task of search consultants is organizing
the process. "When a consultant is involved, it's always organized," one agency
executive says. "When a consultant is not involved, it's sometimes organized."
Colin Probert, president of Goodby, Silverstein & Partners in San Francisco, says
consultants can facilitate the process and answer questions quickly. "They lay the
ground rules," he says.

Good RFPs clearly outline the schedule for the review. For example, in its RFP for
Timex last fall, Boston-based Pile and Co., which scored well on organization in
this survey, offered a precise timetable for the $8 million pitch. Following
e-mail confirmation that the RFP was received, shops were asked to indicate
interest by Oct. 18 (and update their listing on www.agencycompile.com). Fifteen
slides responding to the selection criteria were due Oct. 25, along with creative
portfolios, information about past and current clients, and videotaped biographies
of the teams that would work on the account. Semifinalists were to be selected
Oct. 29; agencies would learn the following day if they had made the cut.
Ninety-minute capabilities presentations were set for Nov. 12-13. Finalists would
be chosen Nov. 14, and assignments issued. Shops would be briefed Nov. 19, and
final presentations were set for Dec. 11. A decision would be made shortly after
the finals, the RFP said.

The client and consultancy were right on schedule: New York's Kirshenbaum Bond &
Partners secured the business on Dec. 13.

In this survey, Select Resources International in Los Angeles was deemed the
best-organized search consultancy, with Pile a close second. AAR Partners in New
York was cited as the least organized.

On Understanding Agency Cultures

TBWA's Carroll says he has only one gripe with consultants. He's baffled when they
claim to understand agency culture and yet frequently choose a shortlist of shops
that have wildly divergent identities&#x2014a group, for example, like Crispin
Porter + Bogusky, Doner, Young & Rubicam and Leo Burnett. "Who made that list?"
asks Carroll. "That's absurd."

But Chuck Porter, chairman of CP+B, says he typically is invited only to reviews
that his agency is appropriate for.

SRI was voted the consultancy that best understands the cultures of agencies. Roth
in New York scored well, too, although it received votes on both sides of the
spectrum. Also high on the list: Pile, MatchWorks in New York and Jones Lundin
Beals in Chicago.

On Marriage Brokering

Do consultant-led reviews lead to longer unions between agencies and clients? It
depends whom you ask. Consultants that offer proprietary tools to assess
compatibility say yes. Agency executives, citing a revolving door in the
management ranks of agencies and their clients, tend to say it doesn't matter.

Drake told attendees at the 4A's new-business summit that agency/client marriages
are becoming shorter than ever&#x2014an average today of 7.6 years, compared with
13.1 years in 1984. Combined with the poor economic climate, "it's no surprise
that agencies are bending over backward to chase and win new business when it has
become available," says Drake. This dynamic, he says, further degrades the
relationships. "Gunning to win business at any cost creates an environment where
agencies allow themselves to be walked all over. And some clients and consultants
are more than happy to oblige."

Despite such sentiments, search consultants claim their main role is to facilitate
long, happy unions. AAR founder and managing partner Leslie Winthrop even calls
herself an "agency/client relationship consultant." Consultants say they spend
time traveling the country, meeting with agencies to get intimate knowledge of
their strengths and weaknesses.

The ones that broker the best agency/client marriages, according to the survey
respondents, are SRI, Roth, Pile and MatchWorks.

On Bias

Asked what bothers them the most about working with search consultants, the
majority of respondents to this survey pointed to the issue of bias. Search firms,
they say, have their favorite agencies&#x2014and they rarely budge (see sidebar).
"They can be rigid," says one respondent. "They don't include you in reviews if
you aren't part of their inner circle." Says another: "We've been winning more
reviews than just about anyone, and it's still tough to get on the lists."

Consultants argue the opposite, saying they level the playing field. "I call
agencies that might want to bitch about us and say, 'We're the best friends you've
got,' " says AAR's Winthrop. "If you've got an agency advocate as your search
consultant, you've got the best level playing field you'll ever have."

Some agency leaders say bias is natural&#x2014even necessary. "If a consultant is
not objective, it's not unfair, because they're getting paid by the client for
their expertise," says Bond. "Bias is good. I don't think they're biased enough.
They know and deal with agencies the most. They're in the most pitches. They
should tell clients who is the right agency for them more than they do."

Laurie Coots, chief marketing officer of TBWA Worldwide, agrees. "The expectation
is of them just being important facilitators," she says. "The truth is, the really
good ones should be more than impartial facilitators, because it really helps both
the agency and the client."

Adds Bond: "Stop whining. They're consultants. They're supposed to consult."

In this survey, SRI was deemed the most unbiased consultant. Morgan Anderson in
New York, Bob Wolf Partners/TPG in Los Angeles and The Rojek Cutcher Group in
Cleveland were considered the most biased.

On Respect

Which consultants are most respectful of agencies' time and money? For many
consultancies, this question brought contradictory responses. AAR, for example,
received votes for least respectful and most respectful. Winthrop says, "The one
thing I'm always complimented on is I don't waste their time." Many agreed, giving
her high marks. Overall, the highest average score went to Roth.

Pile and Co., which scored well in all other categories, slipped in this one. This
may be due to the four-minute customized video Pile requires from each agency team
in its reviews. "There has to be a way for clients to look at a larger number of
agencies and narrow it down," says Pile's Neer, who, incidentally, is also
credited with making the Boston-based consultancy more agency-friendly.

"You can spend $50,000 on the video," says one disgruntled new-business director.
"Yet they keep asking agencies to do it, and everybody does it." Adds another:
"Clients love to sit in front of custom videos, but it takes balls to ask for that
in the first round of a review."

Many respondents pointed to Pile's video when asked to name the most
time-consuming and unnecessary task or test that a consultant requires. One
complained that the video "takes an enormous amount of time, energy and money at a
point in time when you have not even met the client to know if it's a good match."

Also unpopular: Consultants that send out lengthy RFPs seeking detailed financial
information whose relevance to a client's business is questionable. "Make RFPs
specific to client issues, or use a short fact sheet for pre-screening," suggests
one respondent. "Twenty-page doctoral thesis RFPs" are not well-received by agency
folks.

In April 1999, the 4A's recommended a standardized new-business agency
questionnaire. It is designed to expedite the early part of the process for shops,
clients and consultants by allowing agencies to respond to basic questions with
prepared answers.

"We take pride in being good to agencies. Without them, we're no good," says Neer.
"But to have a standard RFP everyone uses we don't think is the best approach."

At the end of a recent SRI questionnaire, the consultancy informed shops that it
subscribes to the 4A's guidelines on conducting agency searches: "As such, in
responding to this brief and request for materials, please do not provide us with
sensitive or proprietary information or work you would be unwilling to share with
this prospect."

At this year's new-business summit, Alan Krinsky, principal at ADvice & ADvisors
in New York, said that while a standardized RFP is a well-intended response to
agency complaints, it isn't in the best interest of agencies. Answering a
customized RFP "permits the respondent to put their best foot forward in providing
unique responses and to demonstrate creativity in the submission," he says. "A
standardized questionnaire generates commonalities. We should be looking for
differentiation among agencies, and the agencies should prefer that approach."

The survey also indicates skepticism about Rojek Cutcher's proprietary tool called
CultureScan. "They make you do this Rorschach test where they match your responses
to the cards to the client," explains one executive. "They position it as a
deep-rooted psychological test."

Hasan Ramusevic, founder of consultancy Hasan + Co. in Raleigh, N.C., took the
test a few years ago when he ran McKinney + Silver's new-business operations.
Ramusevic, an AAR veteran who launched his consultancy in March 2001, deems the
test silly. "I'm sure they have some sort of use for it and sell whatever that use
is wisely, but I don't know what it has to do with anything," he says.

The CultureScan system asks agencies and clients to sort 54 cards that have value
attributes written on them (competitive, flexible, risk taking, etc.) in the order
that best describes their organizations. It's far from silly, argues Lorraine
Rojek, who founded the consultancy in 1990. "Most clients say the reason their
partnership with agencies has stood the test of time is because they are
culturally aligned with agencies," she says.

Among the believers is Kim Bartley, vp of marketing at White Castle, who in
November will celebrate her 10th anniversary with J. Walter Thompson, Detroit.
Bartley credits CultureScan for determining the compatibility of agency and
client.

On Interaction

Most respondents say they get incensed when consultants limit access to clients.
"Some prevent access in the name of efficiency. That's a huge mistake," says one.
The consensus is that this prevents both parties from learning whether they have
true chemistry and will make good partners. "If you want to consider it a
marriage, a marriage should not take place after two dates," says Ramusevic.
"During the finals phase, agencies and clients should be getting to know each
other intimately. There should be an exchange of dialogue. There's going to be
trust or distrust being built during that time."

Of course, consultants typically say they do facilitate interaction. "Our process
allows for the client to interact with the agency on all critical issues," says
Roth. He, like Neer and SRI's Catherine Bension, says more interaction "simulates
the real working environment." Still, says Neer, agencies need to recognize that
clients hire consultants to institute a process, and agencies must respect the
client's wishes.

"Our philosophy is to function as a facilitator throughout the whole process,"
says Bension. "We chose as policy not to attend the final presentation, entitling
the client to make the final decision. They're the ones who have to sit with the
agencies and make the relationship work."

Neer says Pile helps each client make a decision but that the search firm does not
have a vote in selecting the winner. Roth says he "prefers not to tell clients his
choice."

At the 4A's conference in June, Cleve Langton, director of business development at
DDB and chairman of the 4A's new-business committee for large agencies, made his
position on interaction crystal clear. "If a consultant doesn't allow contact,
pull out," he said.

On Personality

The final question in Adweek's survey asked agencies to say which consultants are
the easiest to work with on a personal level. SRI again jumped to the head of the
pack.

But whether they're easy to work with or not, consultants are here to stay. "The
marketplace wants them and needs them," Berlin Cameron/Red Cell CEO Andy Berlin
said at the 4A's conference. "The good ones level the playing field. They give
feedback without being unfair. They perform a valuable service. Without them, the
process would be more arbitrary&#x2014less fair, not more fair."

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