The Fix is in…or is it? – What is bid rigging and how does it affect your production?

By - CTL
January 29, 2017
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by Marcus Honesta.

There is a lot of talk at this moment of what has been a taboo subject in the Ad Industry for many generations; its called “Bid Rigging”.

It has often seemed to me that the deliberate intent of a commercial TV production quote is to confuse, misdirect and camouflage what should be
 a relatively straightforward affair. Inevitability you’re presented with a hugely detailed, multi-paged document the reading of which is like wading through a sea of treacle with a millstone tied to your foot.

Make no mistake it is all part of a process set up to secure a desired outcome.

So what is it, (bid rigging) and how does it work and affect your production?

Let’s for arguments sake pick a number. For the purpose of this exercise let’s target a budgeted brief of $500,000.

The first question should be “Is this enough to produce the type of script that will meet my brand needs and standing in the marketplace?”

For the purpose of this exercise let us assume that the budget provided is adequate for the task at hand.

Given we are satisfied that this is all that the project warrants, and indeed can afford, we can proceed to briefing our advertising agency, and requesting that they develop a new script for the current market’s needs and demands. Once the script is approved and in place we then move into the production process proper.

THE MAGICIAN’S OLDEST TRICK.

It is at this stage where the perennial wildcard is often thrown into the equation. It all starts with the way the agency briefs their chosen directors. These are the ones they feel are most able to provide the best treatment and execution with the approved script.

It is commonly believed it all starts with a level playing field, and all production companies are supplied with the same brief, however the selection of those asked to submit may be as different as chalk and cheese.

It’s the oldest of magic tricks; ‘Pick a card, any card’. The problem is you always end up with the card the magician wanted you to pick.

You might ask, just how could this happen? Like all card tricks they take a lot of practice, but once you’ve got the hang of it, it’s pretty easy to fool even the most skeptical of volunteers.

It’s usually done at the briefing stage. Three production companies will be selected to produce treatments, vision and budgets to bring the commercial to life. There are varying levels of production houses and possible directors available at a moments notice.

The issue these days and the real problem that now comes into play, and what is causing all the brouhaha right now, is that many of the agencies own their own in house production companies. There are now being questions raised as to the whole transparency of the process and the commissions and fees agencies earn by going with one company or another and not disclosing or rebating them to their clients.

Enough of that for now, lets get back to the bid rigging process.

If you go in at the top end of town you are sure to get a Rolls Royce price, but if you are on a Holden Commodore budget, it’s a bit like comparing apples and elephants.

If the budget is $500,000 and you brief your preferred bidder with this amount in mind. Then you brief the next production company so they are guaranteed to come in at $560,000, and the next one at $650,000, as your choice, in reality is the first one.

The other two form what I suppose you could call ‘window dressing’, or what is commonly known in the industry as a check quote. These quotes are usually done on the guaranteed promise of work in the future. If ever challenged, it’s easy enough to confirm the apparent independent value for money nature of the recommended bid. “Look we got three independent excellent bids how many more do you need”?

Not all Agencies do it. But enough of a cloud has been raised in the past few weeks, to have all the multi-nationals groups scurrying off to brief legal advisers on the basis of the summons issued by the US Department of Justice just before Christmas.

We await the fall out.

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