The Martini Shot: How intl approach to in-house production impacts here

by Bobby Amm. The international trend of the monolithic, worldwide, ad agency groups opening in-house production houses/units is not only affecting South African (director-based) production houses but also SA service-based production houses; the knock-on effect in the SA commercial service industry has been evident, with a huge drop in work this past summer season.

The in-house production units are now commissioning their own branches locally to produce (or, at least, shoot) their productions, therefore no longer working through local, independent, experienced service companies.

Hogarth

The most-alarming example is Hogarth Worldwide, which is part of the WPP portfolio (a few of the (other) WPP-owned companies include Ogilvy & Mather Worldwide, JWT, Y&R, Grey, Wunderman and VML; locally, MetropolitanRepublic, The Hardy Boys, The Jupiter Drawing Room and Cerebra (etc) are also WPP-owned).

Hogarth — which calls itself a “marketing implementation agency” — hasn’t been candid in its representation as it doesn’t clearly show that it’s owned by WPP on its own website. This lack of transparency is underhanded to its clients and smacks of anti-competitive behaviour. Allegations of internal bid rigging have also been noted.

Hogarth has over 40 offices worldwide; in SA, there are offices in Johannesburg and Cape Town. It sells itself on the premise that it has developed “a unique ‘Camera-to-Customer’ workflow to address the needs of our clients who need high quality TV advertising, produced and delivered at much lower cost”. It also throws around words such as “a strong belief in the craft of production” and “outstanding talent in every market”. But how may a company proclaim to employ the best skills and ‘outstanding talent’ under one roof? This would require thousands of the most-talented and experienced filmmakers (from directors to editors to DOPs to producers) to be employed or, at least, be available to Hogarth permanently. It’s an impossible and untruthful claim.

Internationally, production associations are speaking out against this anti-competitiveness and attempt at closing down the independent production industry. Experienced filmmakers are avoiding supporting Hogarth as they realise it tolls the death knell for indie filmmakers.

Other groups such as Omnicom and Publicis Groupe also have production units.

Flare Studio

Omnicom (which includes BBDO and TBWA agencies) names Flare Studio as its unit; however, our investigations show that Flare Studio operates more as a platform that represents independent production companies and talent.

Its description includes: “Flare Studio is a new approach to the traditional ad agency production process. It opens up opportunities for filmmakers and content creators of all levels to pitch for and produce content in response to live briefs from brands. Part of the Omnicom network, a global leader in marketing communications, Flare Studio operates for the world’s leading creative agency networks, including BBDO and TBWA, who represent over 5000 brands and clients in over 100 countries.”

It’s good to see that it’s honest on whom it represents (Omnicom) and it (cleverly) continue to access available independent skills and talent on the platform, rather than purporting to have these in-house. It also supports growth in talent through its foundation.

Prodigious

The Publicis Groupe (including agencies such as Publicis Consiel, Leo Burnett, Saatchi & Saatchi, BBH, and Sapient, to name a few), too, has its own in-house production unit, Prodigious.

Prodigious claims: “We design, produce and deliver brand content across all channels, using the best talent, processes and tools. The result? Seamless global execution of multiple content types across all markets, without compromising creative quality. We call this brand logistics™, our new vision for a new content-driven media landscape.”

It seems that Prodigious, too, provides a platform for talent to be accessed by its group. However, to sign up to be included in this talent pool is difficult.

It remains to be seen how Prodigious intend to run its operation in SA, and production companies will be watching with interest to see the impact this has on the independent production community.

In-house suppliers

Production companies have also expressed unhappiness about agencies that insist on using suppliers (particularly post houses) which are owned by them. Again, this is anti-competitive, not transparent (particularly to clients) and also prone to bid-rigging. This system is often an expensive route to take and the finished product may be inferior:

After some investigation in the local post-production industry, we discovered that the independent post houses are finding that, more and more, they have to fix in-house post work and that the quality of production is of a low standard. This “redo” contributes to the expense of a job, which is then passed onto clients.

While the CPA does embrace change, we must insist on transparency and work hard at keeping the quality of work good. We must also protect and continue valuing our skills set and independence.

CPA position on working with in-house production companies The members of the CPA have requested the association put together this communique to advise the industry of our position on production companies (and other supply companies) that are owned and managed by advertising agencies. Members of the CPA are in unanimous agreement that they will not loan out directors represented by them to in-house production facilities in South Africa. This includes in-house production entities of independent South African-owned agencies, as well as those that are owned by global agency groups ie Hogarth and Prodigious Members of the CPA call for full transparency when they are asked to bid on agency work. Members will ask agencies with in-house production companies if they will be bidding against their in-house facility. It is requested that agencies respond prior to briefings. CPA members have advised that they will not bid against in-house production companies due to the conflict of interest that is inherent in this process. CPA members are happy to bid against other independent production companies, provided that no more than three (3) companies are invited to bid. If an agency wants to invite more than three bids, it should advise all companies up front so that they can elect to continue with the process or decline. CPA members have advised that they will bid on work where the agency (or their in-house production facility) oversees post-production. Production companies should, however, be informed of this at briefing and before pitching, as some directors prefer not to work with in-house post. Disclosure will give these directors the option to decline the job before they pitch. Agencies are requested to desist from giving production an option to use their in-house posts at briefing but then enforcing this when confirming the job. In the interest of transparency, clients should be informed that the post-production is not an open bidding process and that the agency is dictating to the post-house and -operators. If an agency is using an in-house post facility or paying post direct, the production company may charge the traditionally paid post “mark-up” as a “post supervision fee” for the director and producer to oversee the post production. CPA members will also bid when briefed by in-house facilities, provided that they aren’t putting themselves or their directors forward for the same job, thereby eliminating any potential conflict of interest. The majority of CPA members are in agreement that they won’t loan out directors on international jobs produced by in-house production companies in South Africa. While a few members are of the opinion this doesn’t deprive independent companies of opportunities, the view of the majority is that loaning out directors to agencies undermines the international production community, which stands united on this issue. CPA members call on agencies to be transparent in revealing to all clients and suppliers the ownership structure of in-house production companies. All too often, these in-house structures have different names, which may make it difficult for clients and suppliers to identify them. Disclosure to clients should also be applicable where agencies select a preferred post-production supplier (and then insist that production companies work with them), particularly where more-competitive quotes or a better end-product can be achieved by the production company. In our view, this practice suppresses healthy competition in the market place and drives creative standards down. Clients have the right to know about such practices and to veto them, if necessary.

Right of reply

Of the agencies contacted for right of reply, only Net#work BBDO chose to respond:

Net#work BBDO, is a member of the Association for Communication and Advertising; therefore, we take industry policies and institutions like the CPA seriously. So, when we set out to establish Flare in South Africa, we had to ensure that Flare operates as a production unit that adds value to our business without negatively affecting the broader industry.

Below is the outline of how Flare operates in South Africa.

• • Flare Johannesburg is part of the Omnicom group of companies
  • Flare South Africa has been set up by Net#work BBDO to provide Net#work BBDO clients with quick turnaround content work
  • All commercial TV productions are briefed as normal to various production houses and Flare is excluded from these briefs
  • Flare’s ownership is transparent and communicated to all potential clients and cost consultants
  • In the interest of transparency and to ensure fair trading conditions, Flare does note and will not pitch against any other production house; these conditions are clearly communicated to clients and cost consultants
    • For example, recently a new brief came in from our Flare London counterparts. On receipt of the brief and internal scrutiny, it was decided that the best production house for this project would be Star Films. Flare briefed and handed the project over to Star Films.
  • As already stated, Flare South Africa (operating out of Johannesburg) is different to Flare international.
  • Please note that the Flare global model operates as a pitch platform for various production houses, whereby new briefs can be accessed from anywhere in the world.
  • It is an open platform: www.flare.studio

 

Bobby Amm is chief executive of the Commercial Producers Association of South Africa (CPA), the trade association of production companies that produce television, cinema and internet commercials for the local and international market. After a brief stint in journalism, she began her career in the industry at the Consultative Committee for the Entertainment Industry in the early 1990s. She first joined the CPA in 1997 but left three years later to join a production company. After finding that she missed the big-picture perspective of the CPA and the interesting issues which continuously perplex the production industry, Bobby returned to the CPA in 2003. She contributes “The Martini Shot” column monthly, covering developments, trends and insights into the commercial production and film services industries in South Africa, to MarkLives.

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