In the free enterprise system, advertising drives competition, innovation and consumer choice as marketers promote their products to connect with potential customers and build brand value. Ironically, these same advertisers–according to the Independent World Producers Alliance–are being denied the benefits of unfettered competition in the production and postproduction marketplace as ad agency holding companies, looking to boost their bottom line, favor their own in-house production and post operations.
This contention is front and center in an open letter to advertisers–dated today (4/16)–from the Independent World Producers Alliance, a consortium of 25 associations representing the interests of independent production and postproduction companies around the globe.
Among those in the consortium are such organizations as the AICP in the U.S., the European Producers Association, Canada’s ACCP, APRO (the Brazilian Association of Independent Production Companies), AMFI (The Asociacion Mexicana del Filmadoras, the Mexican association of film production companies), the CPA (The Commercial Producers Association of South Africa), and IRPII, the official association representing Indonesia’s commercial film and advertising production houses. Signatory members of the European Producers Association span groups in the Baltic countries, Belgium, Cyprus, the Czech Republic, Denmark, France, Germany, Greece, Ireland, Italy, Poland, Portugal, Serbia, Slovenia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.
The letter authored by the Independent World Producers Alliance cautions marketers to pay close attention to the holding company in-house production and post offerings of their advertising agency partners, and explains the value of preserving an open, transparent, and competitive process to creating the very best marketing messages. The current eroding checks and balances in the marketplace due to the holding companies favoring the benefits of propping up its internal production and post offerings is an ongoing issue, one which has been addressed in the past by AICP president and CEO Matt Miller, among others.
For over 20 years AICP has collaborated with counterpart organizations internationally and co-hosted with the European Associations’ umbrella organization the annual World Producers Summit (primarily in Cannes), to share intelligence regarding production and post practices across markets.
The issue of in-house production and post has risen to an alarming level–which challenges the very underpinnings of the creative marketplace and has been identified as being of the utmost concern to all the markets represented by the 25 signatory associations.
The Independent World Producers Alliance affirms that it is not asking advertisers “to protect our businesses.” Rather the letter states, “We are asking you to protect the strength, distinctiveness and credibility of the process that has developed over decades in the interest of your business.”
Here’s the letter as it reads in full:
Dear Advertisers,
Independent production and postproduction companies are a vital pillar of your brands’ success.
Our ability to execute individual creative, technological challenges at all levels is well known. What may be less known is that at the core of our businesses, we discover and nurture, in addition to representing, the world’s leading directors, editors, AI specialists, digital artists and production talent. This allows us to carefully source the best talent locally and globally for each individual brief. As businesses, we finance, develop and stand behind them to deliver distinctive and bold campaigns and strategies for your brands.
We are your most competitive, experienced, innovative, executive and servicing partners in the world. The extensive and diverse supply of the best talent via independent production companies creates a perfect market for brands accessing their services.
Our model is simple and proven: open competition. Independent producers fight for every project on creativity, expertise and price. Through transparent bidding, we apply all our ingenuity to maximize a project’s potential while delivering the best possible value, all in service of the brand message. You choose freely, knowing you are getting the best outcome: the strongest creative output at the fairest price.
The system works because we are judged solely on the final creative deliverables. We invest maximum creative and production value and ingenuity, sometimes at our own financial risk, because our reputation and your trust depend entirely on the work we deliver.
Today, this model is being undermined. As agency holding company networks consolidate and lose market share of their agency business to consultancies, independent agencies and marketers own in-house agencies, many are internalizing all elements of production as part of their own business and profitability models.
The best directing, editing, production and visual effects talent is with independent production and post companies, so what agency holding company in-house departments offer is not of the same caliber. However their survival relies on structural profitability, no longer putting the role of long-term creative “agents” and partners for your brands as their top priority.
When agencies produce in-house, competition is distorted:
● In-house entities are mostly shielded from competition, the exact same competition which allows clients to obtain the best pricing for the highest creative value through their independent partners;
● When the agency includes its in-house production against the independent sector in the bidding pool, the agency may have a conflict in choosing between its own interests and the needs of its client ;
● Often holding agencies seek to credit some productions as “co-productions,” to inflate their creative legitimacy although the film has truly been produced by the independent production company and its directing talent ;
● Proposed margin-sharing models by in-house productions, could prioritize agency profit over production quality for your brands, ultimately weakening the creative output.
We understand that you are often told that in-house production is “faster” or “cheaper.“ History shows the opposite: when ambition, quality, and brand value matter, transparent competition delivers stronger results. The only way to manage costs and true value is through open dialogue, fair bidding, and transparent production circuits with you in control.
We are not asking you to protect our businesses. We are asking you to protect the strength, distinctiveness and credibility of the process that has developed over decades in the interest of your business.
When agency stock prices influence decisions being made in the work being done for you, it should give you pause. If your agency proposes to produce your work in-house, we encourage you to ask these simple questions:
1) Why is this better for my brand than working with independent producers who compete openly to deliver the best quality film at the best price?
2) Then ask yourselves: Is the agency acting primarily in my best interest or their own?
Together, we shape and produce contents that make your brands famous!!
