Telkom out to pitch; ACA concerned
by Herman Manson (@marklives) Telkom has issued a request for proposals (RFP) or tender for a number of elements within its marketing environment, Telkom’s spokesperson Jacqui O’Sullivan has confirmed. The Association for Communication and Advertising (ACA) is concerned over various contraventions of the ACA Code of Conduct — eg, as many as 12–15 agencies are believed to have been approached, including major networks and some independents.
The RFP covers three businesses within the Telkom Group — Consumer Business, BCX and Openserve — and includes covers ATL creative, direct marketing, digital, activations and sponsorships. According to O’Sullivan, there is no expectation that one single agency will be required to fulfil all these services.
“Limiting and potentially exclusionary”
The RFP was issued on 3 May 2017 and submissions were due on 19 May. Following internal consideration and discussions with the Association for Communication and Advertising (ACA), the decision was taken to extend the closing date to Thursday 25 May in line with the ACA’s requirement of 15 working days, says O’Sullivan.
“Telkom has opted for a closed tender and has purposefully invited a large number of agencies to pitch, specifically to allow to smaller, black-owned and more niched [sic] agencies to bid for specific bodies of work. We are looking for great ideas and we want to hear from the large and established agencies, as well as the smaller and more-specialist agencies that are often overlooked in large corporate pitches.
“We believe these lesser-known agencies should be offered an equal opportunity to pitch for the section of work they believe they are most-geared to serve. While the ACA Code of Conduct requires the list of agencies shortlisted to not exceed five, in a pitch like this, where there are multiple bodies of work, that requirement is limiting and potentially exclusionary,” she ends.
“Free of charge”
In response, Odette van der Haar, ACA CEO, has told MarkLives that it’s the ACA’s understanding that Telkom requires the participating agencies to submit full strategy and creative work specific to the Telkom brands free of charge: “From the information provided to the ACA when the pitch was logged, Telkom invited a mix of large agencies, medium-sized agencies and small agencies to participate,” she says. “When the ACA asked Telkom how many agencies they invited, they did not confirm and cited this information as confidential. By our count (and if one counts agency group consortiums as one), there are approximately a dozen to 15 agencies involved.”
She continues: “Initially, an unreasonable turnaround was given to the agencies; however, Telkom indicated last week that they will extend the deadline to 25 May 2017 in line with the 15-working day requirement of the industry’s Code of Conduct that governs tenders and pitches.
According to Van der Haar, the situation is disappointing as “the code was put in place for good reason and Telkom were informed of the benefits of adherence to the code, ie that the code promotes fair, equal and healthy competition, transformation, a level playing-field, good ethics and conduct during new business acquisition, and it protects the intellectual property of agencies. The code also mitigates risk and wasteful expenditure on the part of agencies and clients. There is therefore no reason not to adhere to the code which does not contravene any legislation or regulation — it, in fact, enhances pitch processes.
“Clients behave unfairly towards agencies”
“The biggest threat to our industry is that more and more clients behave unfairly towards agencies during pitches or, when contracted, agencies are given unreasonable turnaround times or margins are driven down to limit agencies’ revenue, etc. It is paramount to the sustainability of the profession that agencies stand united against these unscrupulous practices in order to maintain the value and currency of the profession,” she states.
The ACA’s concerns with the Telkom pitch are as follows, according to Van der Haar:
- There are too many agencies being asked for strategic and creative work, which is costly to the agencies and, given the number of agencies involved, each agency stands 8.33% chance of winning the business; it is a large investment with a small prospect of success.
- The ask is onerous and expensive, and it prejudices the smaller agencies as they don’t have the same available resource to invest in this pitch as the larger agencies. Without payment of pitch fees, the unsuccessful agencies can’t recoup some of the cost incurred by answering Telkom’s brief.
- Most worrying is that the contribution and currency of the participating agencies are devalued when agencies are asked to provide clients with free intellectual property. An option for Telkom to accept case studies of recently, successfully produced work is in line with their scope of work and services has been proposed because case studies will accurately demonstrate agencies’ ability to meet Telkom’s requirements and deliver ROI — evaluation of case studies is more accurate during pitches than evaluation of ideas, and submission of case studies won’t incur pitch fees. Telkom hasn’t accepted this proposal to submit case studies, which means that the pitch is still in abeyance until the issue of pitch fees is resolved.
- Given the number of agencies involved and the brief issued to the agencies, the collective cost of this pitch will run into millions of rands. The unsuccessful agencies should be paid the required pitch fees in order for some of their hard costs, incurred as a result of this pitch, to be recouped.
Herman Manson (@marklives) is the founder and editor of MarkLives.com.