Fair tender for production companies

The APA has joined the Fair Tender initiative and, in cooperation with the AKA (Association of Communication Agencies), it has created the Fair Tender for AV Production Companies rules, which are intended to help unify the rules for advertising tenders and thereby ensure that, in the future, something that has not been properly prepared in advance is not assigned to production and that the director’s time and energy will always be treated effectively and with respect. This is a set of recommendations, which we and the AKA have agreed upon and we believe that if we manage to disseminate these recommendations among our members and members of the AKA and implement them in practice as soon as possible, this will result in substantial improvement of the quality of tenders for Czech adverts.

The rules are published on our website and also on the Fair Tender website (www.ferovytendr.cz) and the AKA website (https://aka.cz/novinky/ferovy-tendr-pro-av-produkce/) and we will subsequently work on disseminating them in cooperation with the AKA.

Fair tender for AV production companies

The Fair Tender initiative is a set of recommendations based on extensive knowledge of the agency and client environment. The recommended principles were and are consulted with all participants of the market. Fair Tender is always open to suggestions by clients and suppliers in the field of communication. It is the ambition of the AKA and also the APA, which contributed to creation of the recommended principles, to share best practice in the field of high-quality and effective selection of suppliers. Each company decides whether it will draw inspiration from these principles and to what degree, at its own discretion.

1. a reasonable number of directors
2. directors' names are known to competitors
3. budget target is specified in brief
4. sufficient time and clear timing
5. pitch only when brief is ready
6. pitch only finished scripts
7. feedback
8. cancellation terms

1. a reasonable number of directors 

• we suggest 3 directors as a reasonable number for participation in a tender
• if this number is exceeded, then the client should consider motivating them by means of a pitch idea fee 

WHY?

• a greater number of directors is a waste of resources and human energy for all parties (production, agency, client) - conference calls with directors and detailed examination of treatments is also very time consuming for the agency, which then charges these costs to the client or reduces its profit margin
• the focus of all parties drops rapidly if there is a greater number of competitors (the worst scenario is when the agency creatives don’t even remember the content of the director’s treatment, because they have read so many of them that they can no longer orientate themselves, or they didn’t read the treatments at all and want the director to tell them the content) 
• the probability of success declines with a greater number of participants and this also reduces the motivation of the participating productions and directors - quantity does not mean quality 

2. directors' names are known to competitors

• all participants know the names of their competitors 

WHY? 

• if the director and production know their competitors’ names, it is easier to decide whether to participate in the tender and what creative idea they will offer in order to attract attention
• the client is subsequently provided with a broader range of different concepts 

3. budget target is specified in brief

• at least a rough estimate of the client’s planned budget - range in millions of Crowns (i.e. up to 1 million Crowns, 5-6 million Crowns, 10-12 million Crowns) must be known in order to prepare a suitable bid 

WHY? 

• no client has an unlimited budget 
• various budget solutions are always possible and production wants to submit the right one 
• offering a director and approach that is too expensive or unnecessarily low-cost may automatically eliminate the production agency from the tender 
• all the work on the treatment is then wasted  simply because of an unclear budget brief 
• the client is essentially unable to compare bids with extremely different budgets and, therefore, completely different concepts of realisation 

4. sufficient time and clear timing 

• a clearly set schedule, from writing the treatment, to the spot delivery deadline, is essential for executing a high-quality bid 
• remember to allow enough time for writing the director’s treatment - ideally 5 working days or more 
• making requested changes also takes time - ideally 1-2 working days depending on the extent of the changes 
• the director’s working day for executing a treatment or making changes is a standard working weekday, excluding weekends and bank holidays 
• fair conditions must be provided to all competitors, including timing - the assignment should be sent out on the same day and time to everyone 

WHY?

• a good treatment cannot be created overnight, some research, as well as consideration of the concept are always necessary
• the agency usually works on the concept for several months and doesn’t want its “baby” to be ruined by the director – the same care is required of the director and this requires time
• setting a clear delivery deadline allows better scheduling of detailed timing that is actually feasible
• if sufficient time is provided for execution, the costs can always be reduced substantially – the most expensive solutions are those that are created in a hurry

5. pitch only when brief is ready
(approved concept)

• the tendered concept has been approved by the client on all decision-making levels
• all rights, if the entire concept is based on these, have been purchased before the tender is announced
• in the case of alcoholic products, the concept was examined by the Ethics Committee before the tender was announced
• the concept was tested before the tender was announced

WHY?

• if we tender concepts that have not been approved, we risk that the entire tender is superfluous and our efforts are in vain
• the tender is not just about money, but also about an enormous amount of human energy, which is focused on doing something unique for the specific concept – if this energy is exhausted on something that was completely unnecessary, this diminishes the motivation and will to create more ideas for a new concept and the client loses the opportunity for fresh energy for the project
• if there really is no other way, make sure that both production and the director are aware that the concept has not yet been approved so that they can decide whether to risk entering the tender

6. pitch only finished scripts

• the tender only concerns spots for which the scripts are ready and approved
• the tender cannot include scripts that do not exist at the time the tender is announced
• the tender cannot specify a script to be created by a director who has not yet won the tender
• it is not the director’s job to create the script, but the scriptwriter’s/copywriter’s job. Production company can ensure this work, but this should be completed before the tender for creation of the spot is announced

WHY?

• the director’s job is to expand on and enhance the approved script, not churn out ideas and scripts for a project that has not yet been awarded to him 
• directors cannot be asked to create scripts that will be filmed by someone else who wins the tender during the selection procedure
• from the moment production gets GO, the director must focus on preparatory work, which requires absolute concentration and very meticulous work. Despite this, most directors are very happy to be involved in work on additional scripts if the project is “theirs” – but their involvement in work on the script still has limits and should only be as support of the agency copywriter’s work 
• from the budget aspect – if the client insists on including non-existent scrips in the budget, it is very difficult to compare budgets from various production companies and the production’s requirements for any additional costs linked to production of “new scripts” are very difficult to deny at a later date = there is therefore absolutely no reason to include non-existent scripts in a tender

7. feedback

• don’t brush off production with silence or a text message simply stating “you did not win the tender”
• a reason should always be given for why a competitor did not win a tender and the bid should be given a written evaluation

WHY?

• the only way to raise the quality of a tender and avoid unnecessarily wasted energy on something the client does not expect or appreciate
• if relations between production, the agency and the client are to work in the long-term, there must be mutual respect, even if the tender is not awarded, and the expended effort must be appreciated by giving feedback, which increases the chance of success during the next tender

8. cancellation terms

• consider providing compensation if the tender is cancelled for reasons on your part – no-one has a problem losing a tender, but compensation must be provided if one puts time, energy and money towards something that is then cancelled 
• consider providing a pitching fee if the script is modified during the tender and the director is required to re-work the treatment into a completely new script
• consider providing a pitching fee in the event of significant changes to project timing, which lead to a director withdrawing from the modified tender

WHY?

• increasing demands are being placed on the quality of directors’ treatments, which means that, in order to succeed, a higher number of people have to be involved in creating a treatment, including various subcontractors, and this requires considerable funds, which production assumes will be recouped in the event that the tender is won
• the costs for a standard tender with a Czech director range at around CZK 25-30 thousand, costs for a tender with a foreign director are around CZK 50-80 thousand
• the director’s pitch idea fee is the amount that should provide adequate compensation for the director’s efforts, with regard to how demanding taking part in a tender is and the costs expended according to the previous item
• it is not sustainable in the long-term to invest such funds into projects that are then cancelled. First rate suppliers, who have no shortage of demand, choose which tenders they will take part in with regard to the cancellation terms
• in most creative sectors, compensation of costs or pitch idea fees are a standard motivator for assuring the participation of high-quality bidders

Documents to download:

production brief form

as an annex to each tender

The Universal Principles of Engagement 

is a document we have created in partnership with the APA and the American producers association, the AICP, which has now been endorsed by producers associations around the world – see the document for the full list, which includes every CFP-E member association and the producers associations of Latin America and India. The document has been launched in June 2013 in Cannes at the annual World Producers Summit.

The Universal Principles document is of practical use to all European production companies and to every CFP-E association in assisting them. They show that in seeking to contract in writing, ensure that a substantial part of the budget – 50% to 75%- is paid up front to meet a significant part of the expenditure the production company is making to create the commercial and clear and fair cancellation provisions etc are recognised as being part of the foundation of good commercials production and, in doing so, are an aid in persuading an agency or advertiser that they should contract on that basis.

We believe that working to the Universal Principles is to the benefit of agencies and advertisers.

We believe that working to the Universal Principles is to the benefit of agencies and advertisers, as well as production companies, because having clarity as to what is being produced and having a clear and fair contractual framework is the best foundation for the production of the commercial which best realises the advertisers objectives.