General Mills CMO Ivan Pollard issued a statement following backlash against the terms of an agency review his company is conducting. In the statement, he explains and defends the terms set for the review issued at the beginning of May.
(To be clear: I am not in any way involved in this review.)
What happened is that, following a General Mills RFP that was sent to several agencies, some of the agencies took issue with the terms, and made them public. According to Adweek: “The specifics of these agreements, sources said, include 120-day payment periods, no compensation for the pitch process and complete ownership of all creative concepts, whether General Mills ultimately hires the agencies in question or not.”
So how terrible is this?
As we all know, 120-day payment terms are nothing new. They have been around probably since 2008 or 2009, instigated by Reckitt Benckiser and Anheuser-Busch InBev.The 120 days is a tough call and not easy to manage for an agency group.
But I can recall several conversations with global agency group leaders who were perfectly willing and capable to discuss payment terms of 120 days. They explained that, as long as it wasn’t on media buying, there was flexibility on terms to pay.
I am not saying the agency holding companies liked the idea. But businesses have pushed payment terms across the board and across all their suppliers. None of these suppliers were happy, but this has become a cost of business, and somehow everyone makes it work. It is the same for agency holding companies.
Compensation for the pitch process? That’s something I have never encountered before, and I have been around a little while. Neither the Association of National Advertisers, nor the Incorporated Society of British Advertisers, the British equivalent of the ANA, have rules that suggest that advertisers pay for pitches. You can check the joint ANA/4A’s pitch rules here, and ISBA’s pitch rules here, Both sites include free, downloadable guides.
So what about the issue of ownership of proposed creative concepts? This is a little more complex. Agency holding companies are doing an awful lot of pitches. And some concepts may have a bit of a shelf life. If one advertiser does not buy a lifestyle concept, perhaps another advertiser will say yes. Or if you have a good idea for a car ad, who is to say that one car advertiser in a pitch might reject what another car advertiser considers the winning concept?
That's why General Mills wants to protect what it sees in pitches. As a principle, that is common sense. Says Ivan Pollard: ““I know that IP ownership has also been a big topic of conversation. I acknowledge that there are times when agencies pitch similar ideas and, in these instances, we must protect ourselves. If agencies have a great idea or concept for our brands, it is likely we will want to work with them.”
In the world of real estate, it is “location, location, location.” In the ad world, it’s “ideas, ideas, ideas.” I must agree with the General Mills CMO that protecting ideas from being recycled requires protection. You can agree with the losing agencies that you won’t actually use their ideas. But by the same token, neither should they.
So is General Mills such a big, bad pitch bully? Not really. It’s simply working by the rule book of pitches today. Nothing wrong with that.