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Charity mark-ups, conflicts and copycatting – the worst extremes of client-agency behaviour

From unethical practices to outright copyright infringement, Trinity P3 has unveiled some of the worst examples of client and agency behaviour from across the Asia-Pacific region.

During a presentation at Mumbrella360 Asia conference in Singapore earlier this month, the marketing consultancy firm revealed how one agency claimed commission for bailing his client out of a charitable donation, while one Asia-based client used an agency’s speculative work to launch a new campaign.

Speaking during the recent conference in Singapore, Trinity P3’s founder and managing director Darren Woolley said all the examples were real-life cases the consultancy had dealt with, although he was unable to name the parties due to potential defamation

On the first scenario, Woolley said: “A marketer had a charity that was part of their strategy, but found themselves at a fundraising event unable to make the donation to the charity. They turned to the agency CEO and asked if they would make the $50,000 donation on their behalf, which the agency CEO agreed to. 

“Later than month, the $50,000 bill turned up with a 10 per cent commission markup and the 7.5 per cent service fee, which the marketer was very disappointed about.”

Responding to that situation, panellist and former senior marketing director of KFC, Virginia Ng, said: “I would be very disappointed as I would just assume the agency would be in love with me and willing to help me out whatever the circumstances.

“This man agreed to help save me from my embarrassment, so I think it’s acceptable to pay the service fee but not the 10 per cent fee for the work done. In this case he probably just got his finance department to issue a cheque.”

Woolley: ‘Our investigation revealed that the ECD was a silent partner in the production company where 80% of his agency’s work was going’

Another incident encountered by Trinity P3 involved an “an award-winning creative director” who sent 80 per cent of his agency’s work to one particular production house. The total amount of work sent was worth around US$12 million, Woolley said.

“The clients [were not] complaining about the quality of the productions but about the price. Our investigation revealed that the ECD was a silent partner in the production company.”

Commenting on the scenario, fellow panellist and PHD APAC CEO Susana Tsui said: “This is very common some countries. Joking aside, why has the creative director a side project that he hasn’t declared? That’s normally mandatory. Not being transparent with the client is absolutely unfair.”

When asked about whether the agency knew about the ECD’s activities, Woolley elaborated: “The ECD said the agency [knew] about it and was part of an unwritten agreement for them to be able to supplement their income because the agency was unable to pay them the amount they wanted. So for the ECD it was very transparent, but nobody had told the client.”

Meanwhile, on the client side Woolley related one incident whereby a large family business based in Asia asked their media agency to buy a “premium package of out-of-home media”, which was quite sizeable for the quarter and an overall shift in the company’s media strategy.

The advertiser then revealed the OOH package came with a “sales incentive” of an expenses-paid trip to Cannes, Woolley continued. The agency was then told to recommend the package and “organise” the client to win it as ‘Advertiser of the Month’.

Another client, also based in Asia, was revealed to have used a speculative pitch “enthusiastically” put together by and agency  and passed it off as work by their incumbent.

“The agency approached a marketer and the marketer decided to give them a brief to work on a particular project,” Woolley said. “The agency was incredibly enthusiastic; did a huge amount of work through different creative territories and lots of different expressions; did the creative presentation to a great reception and then heard nothing for months. Then one day, they saw work that looked very similar to what they had presented.

“When they approached the company, they were told: ‘Thank you for participating in the pitch, but the work was created by our incumbent… We hear about this kind of situation all the time.”

Responding to the example, Ng called the practise “unethical” but said it never took place during her three-year tenure at KFC.

“We can’t pretend this doesn’t happen,” she said. “Under my watch it didn’t. When we get an agency to pitch, it has to be clear what the timeline is and when we would get back to them. When you see the amount of effort that goes into an agency’s work, we should accord them the respect.”

Tsui added: “The [incumbent] agency was also at fault for accepting somebody else’s idea. If you were a proud agency you wouldn’t even entertain the same idea as someone else.”

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