I was made aware of an interesting case in West Africa. An Advertising Agency presented concepts to a client. The client was a brand manager, in a relationship with another Agency. She welcomed the approach and went so far as to say the work was so good that the new Agency could have her business.
But when her senior management heard of this, they considered the overall value of the existing Agency relationship. And they overturned her decision, even going so far as to tell her that it was not her decision to make. The Agency that presented the campaign is now taking the client to court for 25 per cent of their annual marketing budget. Watch this space for the outcome.
While we wait for the due process (yawn) of the (stretch) courts, let’s consider. Who is in the wrong? Perhaps the Brand Manager led the Agency on. Certainly she was not being fair and open in her partnership with the incumbent Agency (yet another example of how the ‘p’ word is routinely abused). And were her senior management negligent in not defining her approval rights?
It’ll be an interesting case because it does highlight how little value many client companies place on intellectual effort. If the Agency had built this company a car, then there would be something physical to argue about. Volumes of metal and plastic, to be weighed in the balance. Quantities of nuts and bolts glue and solder to be accounted for.
But perhaps the ideas presented had more value than a car. Perhaps they were worth millions of dollars in incremental business if executed properly? They often are. In London, Ad Agency RKCR Y&R routinely charges clients a idea fee based on an estimate of its value to the business. Marks & Spencer paid a kings’ ransom for such an idea. It repositioned them from a dowdy retailer of failsafe underwear, to the fashionable heart of the British middle class.
How much worse would this abuse of effort have been if the company in question had used the ideas? Had turned them from scripts and layouts into TV commercials, in store promotions, new packaging?
‘Oh, but that couldn’t happen’, you may say. Yes it can, and does all too frequently. But here is the good news. In legislation across Africa, rights to intellectual property are becoming much better protected. In the new Kenyan Constitution for example, IP rights and obligations are brought into sharp definition. There are two unequivocal clauses in which the State commits to protect the intellectual property rights of the people.
So, CEO’s need to be more aware of their procurement and marketing managers’ attitude to intellectual property. The stakes are higher now. And too many middle managers still believe the statement ‘ I’m the client’ absolves them from any guilt.
Coincidentally these are usually the same people who think that Ad Agencies or PR companies should be grateful to present for ‘their’ business. Or who try to insist on exclusivity without paying a premium. Supply and demand dynamics have rendered this position untenable. For example in Kenya alone there are 48 banks, and less than a dozen Ad Agencies competent to handle their business.
The reality is that the most productive client- agency relationships are built over time, and based on mutual respect and shared value systems. Anyone who creates intellectual property for you cannot simply be dismissed as a supplier. Be they a musician, a graphic artist, or a software developer. But too often, they have been.
I am grateful to leading commercial law firm Coulson Harney for supplying us with the following legal text, which we are now using in all our pitch presentation materials. In the spirit of improving market behaviours I share it with you here: