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CLOSE-UP: LIVE ISSUE - REVERSE AUCTIONS. What happens to value when briefs are put up for auction?(DuPont employs online reverse auction technique to cut advertising costs)

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| May 02, 2003 | COPYRIGHT 2003 Haymarket Business Publications Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Are clients damaging the business when they go on price alone?

How apposite that DuPont, the chemicals giant, should have Teflon, that famous repellent of all manner of nasty things, among its stable of world-famous brands.

The US-based multinational is currently fielding brickbats from ad industry people everywhere over the way it has chosen to conduct its search for a full-service global agency.

Seven networks - FCB, Saatchi & Saatchi, McCann-Erickson, Ogilvy & Mather, Young & Rubicam, Fallon and Doner - have pitched their creative work and the DuPont team is evaluating it. So far, so normal.

What makes this contest so unusual, however, is that the company is also sifting the results of an online reverse auction in which pitching shops were asked to show how much they would charge to service the account and how they did their sums.

A senior executive from one of the competing networks calls it 'a bit perplexing'. For others, this doesn't begin to describe what they regard as a crude attempt at cutting costs. 'Appalling,' a senior industry consultant fumes. 'An aberration,' the chairman of a large UK agency group claims.

Even ISBA, the representative of client interest, has grave reservations about excessive dependence on online auctions. Debbie Morrison, its director of membership, says: 'Creativity can't be bought in this way It may lead to some big discounts initially but these aren't sustainable.'

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