Opinion 3 ; 091015 ; Campaign
09.10.15 ❘ OPINION ❘ 23
campaign
Advertisers need to throw their weight behind C4 MAISIEMcCABE Two weeks ago,an 80mm lens belonging to the veteran press photographer Steve Back put paid to the idea that the government was not thinking about flogging Channel 4. The government,whose own lens is publicly pointed at the BBC,had insisted talk of privatisation was wrong.At the Edinburgh TV Festival inAugust,the culture secretary, JohnWhittingdale,said it was not under discussion.At the RoyalTelevision Society conference in Cambridge two weeks later,he maintained that there were“no plans”to sell Channel 4. Back had opportunistically snapped some papers being carried into Downing Street by a junior civil servant.What he read on them made him so angry that he gave the picture to Channel 4 for free.The document said that the government is examining the options for “extracting greater public value”from Channel 4.The fact that the Department for
Soundoff Brands should stump up for ad production Dear editor, Campaign and Paul Bainsfair recently reported incidents of clients asking agencies to pay for production on approved jobs – and then offering bridging loans where cashflow issues meant this could not happen (25 September). There is no earthly reason why agencies should do this. Production is a pass-through cost and is paid over from the agency to the production company. Second, clients must have choice and make sure the production consultants have benchmarked the job before signing off production money. Production companies do not get fees while all the pitching is going on. Film companies run lean and the work is done on a freelance basis. Our credit as production companies is paramount. The first 50 per cent seems a chunk of cash, but that and more is spent by the time the shoot is over. Production
Got a view?
Culture,Media & Sport subsequently blocked the reappointment of the Channel 4 chairman,Lord Burns,suggests it wasn’t that keen on his proposal to turn the broadcaster into a charitable trust. Channel 4 was set up by theThatcher government to stimulate the independent production sector.And stimulate it has.Last year,70 per cent of Channel 4’s total content outlay was with UK producers.Moreover, Channel 4 works with more independent production companies than Channel 5 and ITV put together. Whittingdale has said that any change to Channel 4’s ownership would not mean an end to its remit.But will the government realise the £1 billion being talked about if a new owner will be required to stick to its existing public-service obligations? Even if
The commercial case – that advertisers like Channel 4’s unusual structure – could get lost in the debate
companies and agencies are cashflowing as it is and clients need to have “skin in the game”. Months of effort, resource and funds have gone by before client production money changes hands. I do not think charging interest or factoring will be money on the screen. Clients should pay for their productions. It is done for their benefit. They own it and it should be their choice if they want to borrow their own money. The agency might do the schedule but, ultimately, many factors go into when a project is shot, edited and seen. Schedules are made up and, quite rightly, the first consideration is servicing the client and their benefit, and last is saving money on production. Bringing us in earlier, reducing the number of suppliers and better organising the spend and scheduling might be better use of agency and client production budgets. Martha Greene, chief executive and executive producer, Pointblank
it does,that sum is barely more than a rounding error when it comes to the £1,506 billion national debt.Channel 4 currently generates £1.1 billion in GDP and supports 19,000 jobs at no cost to the taxpayer.One person I spoke to last week said the £1 billion price tag is likely to be eroded over the term of a single parliament in terms of lost contribution to the economy. I expect that the content case for Channel 4 is going to be made pretty loudly over the next couple of years.But my concern is that the commercial case – the fact that advertisers like Channel 4’s unusual structure – could get lost in the debate.For the past 30 years,Channel 4 has helped brands get their messages across to affluent,young and light-TV viewers.Advertisers don’t need another ITV or a second Channel 5. There are lots of things Channel 4 could do better,but the brilliant craziness of Jonathan Glazer’s films (page 28) shows that the broadcaster is still doing things differently.If you care about it,too,then now is the time to speak up. [email protected] @maisiemccabe
loans. I found his response simplistic and overly traditional. While agencies should never feel “forced” to absorb upfront costs or delayed payments, the commercial models between clients and agencies are evolving and the days of simple retainers and clients covering all costs seem to be going the way of the dinosaur.
Let’s stop whinging about client terms Dear editor, In response to the Campaign article “Industry ‘dismayed’ by client move to offer bridging loans” (25 September), as a proud member of the IPA I was somewhat dismayed by Paul Bainsfair and his comments of “rapacious behaviour” of clients offering bridging
@campaignmag
Campaign Magazine
Bainsfair…response ‘overly traditional’ [email protected]
Why shouldn’t clients look for the most beneficial terms they can? Because it breaks some “unofficial” rules of engagement the industry has? The rules of commercial contracts are fluid. If an agency has completed due diligence and deemed the contract strong enough to warrant the use of a loan to get it off the ground, then that’s a sound commercial decision. At House of Kaizen, we regularly and successfully run commission-based partnerships with clients, where we absorb all set-up, production and even media costs as part of the commercial model we implement. What’s interesting is that it actually represents a unique opportunity for negotiation. If someone is asking you to accept paying upfront set-up costs and 120 days payments, then leverage it to your advantage and look for areas in which to mitigate the risk and maximise your return – such as greater bonus payments, extended contract terms, wider scope of work or even adding back the cost of the loan to the fees. If the reward doesn’t equal the risk, walk away or look to negotiate further. Such “adult” conversations are likely to see clients engage in a more mature way and may even show them the absurdity of some of their requests. It’s time the industry moved into the 21st century with client and agency partnerships. Pandering to complaints around brands not playing by the “rules” is not a solution. David Shiell, chief executive, House of Kaizen
campaign
Advertisers need to throw their weight behind C4 MAISIEMcCABE Two weeks ago,an 80mm lens belonging to the veteran press photographer Steve Back put paid to the idea that the government was not thinking about flogging Channel 4. The government,whose own lens is publicly pointed at the BBC,had insisted talk of privatisation was wrong.At the Edinburgh TV Festival inAugust,the culture secretary, JohnWhittingdale,said it was not under discussion.At the RoyalTelevision Society conference in Cambridge two weeks later,he maintained that there were“no plans”to sell Channel 4. Back had opportunistically snapped some papers being carried into Downing Street by a junior civil servant.What he read on them made him so angry that he gave the picture to Channel 4 for free.The document said that the government is examining the options for “extracting greater public value”from Channel 4.The fact that the Department for
Soundoff Brands should stump up for ad production Dear editor, Campaign and Paul Bainsfair recently reported incidents of clients asking agencies to pay for production on approved jobs – and then offering bridging loans where cashflow issues meant this could not happen (25 September). There is no earthly reason why agencies should do this. Production is a pass-through cost and is paid over from the agency to the production company. Second, clients must have choice and make sure the production consultants have benchmarked the job before signing off production money. Production companies do not get fees while all the pitching is going on. Film companies run lean and the work is done on a freelance basis. Our credit as production companies is paramount. The first 50 per cent seems a chunk of cash, but that and more is spent by the time the shoot is over. Production
Got a view?
Culture,Media & Sport subsequently blocked the reappointment of the Channel 4 chairman,Lord Burns,suggests it wasn’t that keen on his proposal to turn the broadcaster into a charitable trust. Channel 4 was set up by theThatcher government to stimulate the independent production sector.And stimulate it has.Last year,70 per cent of Channel 4’s total content outlay was with UK producers.Moreover, Channel 4 works with more independent production companies than Channel 5 and ITV put together. Whittingdale has said that any change to Channel 4’s ownership would not mean an end to its remit.But will the government realise the £1 billion being talked about if a new owner will be required to stick to its existing public-service obligations? Even if
The commercial case – that advertisers like Channel 4’s unusual structure – could get lost in the debate
companies and agencies are cashflowing as it is and clients need to have “skin in the game”. Months of effort, resource and funds have gone by before client production money changes hands. I do not think charging interest or factoring will be money on the screen. Clients should pay for their productions. It is done for their benefit. They own it and it should be their choice if they want to borrow their own money. The agency might do the schedule but, ultimately, many factors go into when a project is shot, edited and seen. Schedules are made up and, quite rightly, the first consideration is servicing the client and their benefit, and last is saving money on production. Bringing us in earlier, reducing the number of suppliers and better organising the spend and scheduling might be better use of agency and client production budgets. Martha Greene, chief executive and executive producer, Pointblank
it does,that sum is barely more than a rounding error when it comes to the £1,506 billion national debt.Channel 4 currently generates £1.1 billion in GDP and supports 19,000 jobs at no cost to the taxpayer.One person I spoke to last week said the £1 billion price tag is likely to be eroded over the term of a single parliament in terms of lost contribution to the economy. I expect that the content case for Channel 4 is going to be made pretty loudly over the next couple of years.But my concern is that the commercial case – the fact that advertisers like Channel 4’s unusual structure – could get lost in the debate.For the past 30 years,Channel 4 has helped brands get their messages across to affluent,young and light-TV viewers.Advertisers don’t need another ITV or a second Channel 5. There are lots of things Channel 4 could do better,but the brilliant craziness of Jonathan Glazer’s films (page 28) shows that the broadcaster is still doing things differently.If you care about it,too,then now is the time to speak up. [email protected] @maisiemccabe
loans. I found his response simplistic and overly traditional. While agencies should never feel “forced” to absorb upfront costs or delayed payments, the commercial models between clients and agencies are evolving and the days of simple retainers and clients covering all costs seem to be going the way of the dinosaur.
Let’s stop whinging about client terms Dear editor, In response to the Campaign article “Industry ‘dismayed’ by client move to offer bridging loans” (25 September), as a proud member of the IPA I was somewhat dismayed by Paul Bainsfair and his comments of “rapacious behaviour” of clients offering bridging
@campaignmag
Campaign Magazine
Bainsfair…response ‘overly traditional’ [email protected]
Why shouldn’t clients look for the most beneficial terms they can? Because it breaks some “unofficial” rules of engagement the industry has? The rules of commercial contracts are fluid. If an agency has completed due diligence and deemed the contract strong enough to warrant the use of a loan to get it off the ground, then that’s a sound commercial decision. At House of Kaizen, we regularly and successfully run commission-based partnerships with clients, where we absorb all set-up, production and even media costs as part of the commercial model we implement. What’s interesting is that it actually represents a unique opportunity for negotiation. If someone is asking you to accept paying upfront set-up costs and 120 days payments, then leverage it to your advantage and look for areas in which to mitigate the risk and maximise your return – such as greater bonus payments, extended contract terms, wider scope of work or even adding back the cost of the loan to the fees. If the reward doesn’t equal the risk, walk away or look to negotiate further. Such “adult” conversations are likely to see clients engage in a more mature way and may even show them the absurdity of some of their requests. It’s time the industry moved into the 21st century with client and agency partnerships. Pandering to complaints around brands not playing by the “rules” is not a solution. David Shiell, chief executive, House of Kaizen
