Following up from a statement released last week by 4As on the rejection of Ensemble’s application to join the 4As, Bala Pomaleh, CEO of IPG Mediabrands and Amit Sutha, Managing Director of Ensemble Worldwide shared their side of the story.
Ensemble applied to be a 4As member through Futureplay Sdn. Bhd. and was rejected. We understand that your legal entity is IPG Mediabrands Sdn. Bhd. and Ensemble is a “brand”. There are 2 things we’d like to understand here. What is Futureplay Sdn. Bhd.? And why did you apply through this entity, and not IPG Mediabrands Sdn. Bhd. when there are other brands similarly registered under the 4As?
Yes, it is true that Ensemble applied for membership to 4As and were rejected. Regrettably we didn’t meet some of the set criteria, and we do respect the decision made. Just so you are aware, the 4As membership application can only be made via a legal entity and not a brand name. So our submission for Ensemble hence had to be made via IPG Mediabrands Sdn. Bhd., our legal entity. A legal entity can have multiple brand names under them, which is also how a few other agencies became members – they are registered under their legal entity but are known publicly by their brand names which are different.
When we met with the 4As representative, he strongly encouraged us to use a different legal entity. Citing the 4As pitch disbursement bylaws, the 4As representative told us we risk contravening rule 4.1.
What is Rule 4.1?
Rule 4.1 requires the member and their subsidiaries or related companies to charge pitch disbursement fees to clients who invite them to pitch. What this means is that all brands within the same agency group (subsidiary or related) will have to comply with this rule.
We are absolutely agreeable to comply with this rule for Ensemble as this is an accepted norm within the creative agency space and clients allow it. We however cannot comply with this rule for our other brands within IPG Mediabrands as no client will agree to pay such fees. However 4As insists all our brands within IPG Mediabrands have to charge a pitch disbursement fee otherwise we will contravene Rule 4.1.
That’s interesting. Does this rule apply to all 4A members?
Well, we’re unsure about this. We did enquire as to how this rule was implemented by other 4As members who are part of networks with various services and if their other agencies charged pitch disbursement fees. We unfortunately did not receive any answer to this.
We were however reminded of this rule verbally and in writing and were informed that exceptions are only made for media strategy and buying related pitches as per Rule 7.4. I’m sure you understand that we pitch actively, and literally all media pitches today require us to demonstrate creativity, ideas and executions. Essentially, complying with this rule will compromise the competitiveness of our brands.
Coming back to Futureplay Sdn. Bhd. again, is this why you applied through this entity?
Yes. We enquired if we should use a different legal entity (though this technically contravenes Rule 4.1 too as another legal entity is still a related company), and were encouraged to do so hence our application was made under Futureplay Sdn. Bhd. As you know however, this was eventually rejected.
What were the reasons for the rejection?
Well, the first reason given was that Futureplay Sdn. Bhd. has not been in the market long enough to have established its experience and stability. The basis of the evaluation was on the legal entity Futureplay Sdn. Bhd. and not the brand name Ensemble, which has been in the creative business for two years, profitably, with a solid list of clients and achievements.
The second reason given relates to the paid up capital of Futureplay Sdn. Bhd. We were delayed by a few days to produce documentation that showed we had increased our paid up capital to RM10K. We did alert them upfront that we needed additional days to finalise the paperwork and even offered to lodge a non-refundable RM10K collateral to 4As as our commitment that the paid up capital will be revised to comply with their requirements. This however was not sufficient to satisfy the evaluation committee.
We acknowledge 4As were merely acting based on the set rules. There however is a lack of clarity for us as to why IPG Mediabrands was required to have all our brands comply with the pitch disbursement fee when other 4As members are exempted. If we had submitted Ensemble’s application under IPG Mediabrands Sdn. Bhd., we would have circumvented the administrative rules used to reject our application.
Should media agencies be part of the 4As?
Our understanding is that they were once part of 4As. It is unclear as to the exact reasons why they are not now, but it could be linked to pitch disbursement fees.
We just want to say that we should put aside our differences in origin and come together. We love our industry and see collaboration as a way for it to prosper and grow. Clients increasingly want integration and the lines between creative, media, digital and other services are converging. Most major agency networks are working harder than ever to integrate brands and services and we want to do our best for our clients.
Anything else to share?
Again, we respect and understand 4As decision for rejecting our membership application. Though the reasons given are administrative in nature, they are valid reasons. We appealed and the 4As have stood by their decision so we have accepted it and consider the matter closed. Hopefully we will be able to apply again down the line.
FAME STARTS HERE: APPIES Malaysia 2017 Open for Entries
Win at the APPIES and shine for the rest of the year!
Almost all of last year’s winners for APPIES Malaysia went on to win big in regional and global awards shows which is why we are bringing back Malaysia’s “TED for Marketing” for its second year!
Your campaign will be judged by over 25 leaders in the Marketing industry who will put your knowledge to the test in a unique Live Presentation environment.
Our 2016 winners pitched their cases to key decision makers from Shell Malaysia, Huawei, CIMB and more!
This year’s judging panel will be equally if not more dynamic and leading the panel will be APPIES Malaysia’s Chief Judge Rakesh Mohan – Chairman of Unilever Malaysia, Singapore, Myanmar, Cambodia & Laos.
So what are you waiting for send in your entries today!
Entrant campaigns must have run between April 2016 and April 2017 in any of these six categories – consumer durables, consumer services, food and beverage, non-food FMCG, business services, as well as government, cultural, social and environmental campaigns.
year’s APPIES Malaysia will be held at Eastin Hotel on June 1st & 2nd.
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