The Other Side of Free: How Spec, the Bane of Agencies, Affects the Vendor Community
Like approximately a million and a half other people, I recently saw the hilarious video Toronto ad agency Zulu Alpha Kilo created decrying the absurd practice of spec work.
As the film painfully points out, working on spec – or worse, being asked to work on spec – is a practice that only seems to fly in the crazy business of advertising. It’s probably best illustrated by the incredulous diner owner whose response to a request to provide free food in exchange for being named ‘restaurant of record’ is to shout “Get out of here!”
I applaud ZAK’s effort to galvanize the agency community around this issue – so much so, in fact, that I almost don’t have the heart to tell them how much worse it gets if you’re a vendor to one of these agencies.
Take the scenarios depicted in the video: Instead of being asked to give the “first one free” (a practice usually relegated to melodramatic movie drug pushers and late-night TV infomercials), vendors are routinely and repeatedly asked to take massive losses on paying jobs, with their only incentive being the dubious privilege of being considered for even more underfunded jobs in the future.
Sounds crazy right? Borrowing a page from ZAK’s book, let’s illustrate what this looks like using a restaurant analogy:
Customer: Okay, we’d like two salads, two steaks, a bottle of wine, dessert and coffee.
Restaurateur: Okay, that will be $150. Customer: I can pay you $67.
Restaurateur: But it costs $150!
Customer: Yeah, but I only have $67. But I’ll tell you what – if you give me this $150 meal for $67, I’ll start eating here all the time. I’ll be here three times a week!
Restaurateur: But –
Customer: Listen, I didn’t want to mention this, but between us the place down the street said he’d do it for $38.
Restaurateur: You mean Pedro’s Taco Truck? It might be easier to hammer this point home if we produced a funny viral video, but unfortunately AICE doesn’t have the budget for that.
All kidding aside, this not-all-that-fictitious exchange reflects the reality of what production and post production vendors deal with all the time. The efforts of agencies and clients to find what they call ‘efficiencies’ and to trim ‘fat’ in the production process has given way to a systematic and repeated degradation of pricing, with vendors routinely asked to offer services at fees that will barely cover costs, much less provide any semblance of a profit. This movement is driven by many factors, including unrealistic client demands, the involvement of ill-informed and inexperienced procurement departments and cost consultants who, like personal injury attorneys, seem to work on commission.
Our members say that often agencies aren’t even bothering to go through the motions of real competitive bidding to get a sense of what a job would actually cost. Instead, they simply tell the production or post company how much they have to spend on a job, which is more often than not a fraction of the actual costs for what they’re requesting, and they expect to get it at that price – with all the bells and whistles that the creatives want, by the way.
ZAK’s spec video ends with a call to action urging their agency peers that “it’s
time we all said no to spec.” Our call to action is the same: it’s time you realized
that it’s fair and ethical to pay what a job is worth, and asking one of your vendor
partners to serve up a $150 meal at half the price is not much better than when
clients ask you to offer up your best creativity, imagination and inspiration for