Is anything simpler today? Certainly not fulfilling an RFP, or request for proposal. In the past five years, although sports marketing budgets haven't necessarily increased, the process of the RFP has grown lengthy, complex and sometimes infuriating.
Agency executives don't agree on why this has happened, but they agree that corporate marketers are demanding a great deal of information and expertise before committing to an agency, and the result is a burden.
"But there's really nothing you can do about it if you're going to play in this space," said Jay Kenney, senior vice president of IMG Consulting.
"It's what we do," said Ethan Green, vice president, North America, for the consultancy Redmandarin.
In simple terms, company demands and competition for work have made proposals grow to sometimes five times the size of a few years ago.
"In the past it was just sort of a written presentation of the agency, an overview, a client list, philosophy, client studies, fee proposal and references. But this is now just the pre-qualifier to get in to the presentation stage, plus they're asking eight to 10 agencies to do a lot of [creative] work without getting compensated for it," Kenney said.
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| Schiller |
Added Tony Schiller, executive vice president of Paragon Marketing Group: "Now they're asking for a blueprint for their strategies and tactics and time frames and resources and budgets for a particular program."
The depth of specifications and details required by companies before they make a financial commitment for consultation and assistance is clearly evolving.
Several years ago, a 20-page response to an RFP was sufficient; now the package can be 100 pages long — and maybe even delivered by someone in a baseball uniform to enhance the connection, as Kenney said was the case in a review IMG Consulting took part in.
Marci Grebstein, vice president of media and consumer marketing for NFL sponsor Staples, said she received a proposal tricked out in football-themed packaging and including an NFL football when the company was considering agencies 18 months ago.
Consultants say they're asked to respond to RFPs within 10 days for first-round information, and the process can require between 40 and 100 hours of work and cost the agency $10,000 or more if the agency reaches the second round.
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| Green |
"Marketing departments on the corporate side are facing significant accountability issues, and they need to justify every action they take, whether it's a spend on an activity or the hiring of an agency," Green said.
This results in requests for detailed accounting of projected fees, hours spent, personnel involved and responsibilities. "I'm not against this kind of scrutiny at all," said Green, whose background includes time on the brand side with Compaq Computer Corp. "The pressures internally on the brand side are enormous."
Schiller said he doesn't think the beefed-up RFP process is a result of larger sponsorship budgets, but instead of companies putting "checks and balances" into the process of spending their budgets. He said it also could be the result of companies new to sponsorship and unfamiliar with the players and hyper-careful about picking the right partner.
He said Paragon just finished a long process with a company looking simply for a partner for a marketing test program, with no guarantee of a relationship beyond it. One agency on the short list pulled out, he said, because it wasn't worth its time. "Companies are asking a lot with a little guarantee," Schiller said. "My sense is that a lot of the work put into proposals is work that used to be put into the first 90 to 120 days of being hired."
"Yes, there are an awful lot of agencies being taken advantage of to a certain extent, but a couple of things impact that," said Stan Beals, managing partner of Jones Lundin Beals, which counsels companies on the RFP process in the advertising world and also has done sports marketing-related work for Verizon Wireless, Valvoline and Kemper Insurance in the past few years.
"One is that agencies put themselves in for it. Two, some agencies draw a firm line in the sand and say, 'We're not going to do speculative creative work.'"
Beals believes an agency shouldn't be asked to do creative work in the first round of competition. "A demonstration of thinking, yes — 'This is how we might approach this' — but no special artwork, photography or music."
But agency executives point out that when hungry agencies pull out all the stops in the first round, it creates an upward pressure in the industry. "To make it sing off the page, you have to include creative, such as video, and that's expensive. And that's just for the [initial] response," Kenney said.
And the pressure begins at the very beginning of the process. It's not uncommon for corporate sports sponsors to invite a dozen companies to submit proposals, and that fact alone surprises some agency types. "I didn't know there were that many agencies in our space that do precisely what we do," Kenney said.
If it's any consolation, Beals has seen ad-agency processes begin with 40 invitations for proposals, largely in the case of companies that didn't know how to handle the process. This rankles some.
"My advice [to companies]," Kenney said, "is don't put out an RFP until you're totally committed to hiring an agency." Beals' advice is different, aimed at agencies: "Be careful who you go to lunch with — in other words, do one-on-one [discussions with the company] to hone your understanding up front [before submitting a proposal]. You're not a vacuum cleaner and you don't have to pick up everything you come in contact with."
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| Staples ended up going it alone after going through the RFP process. |
Kenney said IMG Consulting has been paid small fees to create ideas that could result in a full-blown company-agency relationship, "but we don't see that anymore. Now companies just ask us to do work on spec, and that seems to be the way the industry is headed."
Theft of intellectual property remains a concern for agencies when their candidacy fails, but one they prefer to downplay. Nondisclosure agreements are common in proposals, and many agency people said it wouldn't be worth the backlash to accuse a company of theft. Furthermore, said Beals, "agencies have egos. It'll be a cold day before [the winning agency] lets the company use somebody else's idea."
And there is — increasingly — the chance the process will produce no winner. A little over a year ago, Staples engaged five to 10 agencies, including IMG Consulting, Velocity and FCB Sports Marketing, and whittled the finalists down to a handful. The competitors did their job of enlightening Staples about its needs and resources — to the point that the company decided it now had the wherewithal to go it alone.
"This was never our intention, but a realization as we went through the learning process," Grebstein said. "Typically we would have thought an agency was the only solution available to us, but I did learn to think how to get it done creatively without it costing as much."
Grebstein said the company did not put huge demands on the competitors — "no full-blown creative, just conceptual ideas, no more than 10 pages written," although some companies went beyond this. And she has no guilty misgivings now. "There was some level of surprise but all were extremely professional in accepting our decision."
Arguably, Staples' decision slighted only one company, the theoretical eventual winner. But the RFP process carries risks all the way to the end, and potentially for both sides.
Green argues that while brands may feel they have the internal capabilities to handle projects in-house after hearing from prospective partners, it could jeopardize a company in future RFPs, as agencies may not want to participate if they feel the process won't result in new business. "It might put you in a bad position the next time you have external needs."'
