After 7 years it was time the old IPA/ISBA pitch “charter” got a facelift.
Who: The Direct Marketing Association, the Institute of Practitioners in Advertising, the Incorporated Society of British Advertisers, the Public Relations Consultants Association and the Marketing Communications Consultants Associations
When: July 2002
All of the UK’s leading marketing industry bodies jointly published, under the title "The Guide", joint industry guidelines on agency search, selection and relationship management. Superseding a pitch ‘Charter’ jointly produced by ISBA and the IPA in 1995, "The Guide" is intended to promote best practice in order to encourage the establishment and maintenance of fruitful, long-term relationships in the industry. It also aims to simplify the process of agency search and selection and increase the chances of appointing the ideal long-term partner.
The Guide sets out "ten key considerations" to be gone through by brand owners before even undertaking a review. The first of these states that a change of agencies should only be contemplated once it has been determined by way of an inclusive consultation process that this will be in the best interests of the brand and will enhance shareholder value. From a legal point of view, the key consideration is to ensure that before the review process begins, provisions in the contract with the incumbent agency have been checked, particularly those relating to the notice period and compensation for termination of the contract. Here clients should bear in mind that even if there is no signed contract, there may still be an agency entitlement to notice.
Key consideration number nine requires that before the process of searching for a new agency begins, both the client and the participating agencies need to consider entering into mutual confidentiality/non-disclosure agreements to deal with the issues concerning copyright and intellectual property. These should cover material supplied by the client for the pitch and that produced by the agency in response.
The Guide then goes on to set out a ten-stage process for agency search, selection and relationship management. Focusing on contracts again, the process envisages that when sending out the recommended written brief to prospective agencies, the proposed remuneration and contract terms should be considered and set out in the brief document itself. Once the pitches have taken place, the guidelines encourage clients to "insist on necessary commercial disciplines before an appointment is made". In other words, no agency should be appointed unless and until contracts, remuneration and the management of the relationship have been discussed, so that all contractual obligations can be clearly agreed and signed at the earliest possible stage.
Why this matters:
The guidelines rightly emphasise the importance of non-disclosure agreements prior to any pitch and of a written contract with the new agency being concluded as quickly as possible. As far as non-disclosure agreements are concerned, agencies must consider carefully any such document which is placed in front of them by their prospective client.
For example, there is often a possibility that lurking within clauses which ostensibly deal with confidential information, there is wording which, if signed by the agency, will end up in the agency unconditionally handing over to the prospective client copyright in any material which it presents at a pitch, even if it is ultimately unsuccessful.
The prospective client will also need to ensure that the confidentiality provisions of the agreement are not drawn too widely. A recent Australian case held a confidentiality agreement to be unenforceable. The view of the Queensland Court of Appeal in the case of Maggbury Pty Ltd v Hafele Australia Pty Ltd was that a restriction in the confidentiality agreement on one party never using information given to it by the other "at any time hereafter" was too wide and an unlawful restraint of trade. The ideal non-disclosure agreement therefore should be clear that it only prevents unauthorised disclosure or use of the information in question as long as it remains confidential and maybe also stipulate a period of time, which is not excessively long, beyond which the disclosee will be released from the obligations in question.