Spec Sucks For Everyone

Drew Davies at BeADesignGroup.com has a great rant on why you should say no to spec work.

If the entire business community understood the value of good design, and saw the effect we can actually have on their bottom line, there wouldn't be nearly enough design firms to handle all of the business. But when any creative firm reiterates to a business client that it's okay to give away what we do on a gamble of a big payoff, it's a huge setback. So I'm raising the horn again and sounding the rallying cry- if we all band together and tell the business community that, like any other professional service, we provide something of great value that is worth paying for, only then can we win the war. Fellow designers, please join me in saying no to spec work.

There are quite a few good links about the argument against spec at the beginning of the post as well as in the comments.

I've dug up a few links as well which go into the evils of working on spec for free. SpeakUp Zeldman Provider.com Creative Latitude (which also has other useful-looking information here) Last year I wrote about Advertisers fear "cartel" in Oz as agencies were looking for compensation for doing spec work when pitching for new business. It created a lot of hoopla in the ad market there. The Australian Graphic Design Association, founded in 1988, has an Anti-Free Pitching Register which states:

The Australian Graphic Design Association (AGDA) has, since it inception, been opposed to the practice of free pitching as a means of acquiring new business in graphic design. Collectively, our members believe it to be detrimental to the value of our core capabilities as a creative profession, short sighted as a means of evaluating designers and their companies for commercial projects, and counter to the efforts of many individuals in raising the perceived value of graphic design as a economic resource.

We could put photographers, art directors, writers, etc in the place of designers and the concept should still apply. Unfortunately it seems only designers have set up this kind of self-regulation against attempts at getting work out of them for free. Perhaps this is what prompted the Australian ad agencies to push for changes in pitching practices. The AGDA's Practice Note, Free Pitching and Designer Selection, discusses why spec is bad for both clients and designers. As one quote in the paper states "Sure, we've done the occasional free pitch. But to be honest, how good is the work really going to be if you're not getting paid for it? I mean, you're just not going to put in the time." There is also more on their site here about why free pitching is bad. The group's Code of Ethics is based on the Model Code of Professional Conduct for Designers published in 1987 by ICOGRADA (International Council of Graphic Design Associations), ICSID (International Council of Societies of Industrial Design) and IFI (International Federation of Interior Architects/Interior Designers). The Institute of Designers in Ireland has a similar Code of Practice for its members as well, stating:

A member shall not undertake any work at the invitation of a client without payment of an appropriate fee. Whether members work for a fee, salary, royalty or honorarium must ultimately depend upon the circumstances, providing always that members shall not use the offer of reduced charges to gain an advantage over their fellow members to obtain work or some other professional benefit.

Apparently Thailand's Advertising Association, under the leadership of Vichai Supasomboon, had tried to instate "a 'Pitching Fees' system where by all the agencies which have been invited to join the pitch must be paid by the client with set fees amount of Baht 50,000 each. For example, if client called for five agencies for the pitch, the non-selected four agencies must be paid at Baht 50,000 each."

The Association's "Pitching Fees" system worked well in the beginning but become redundant and not fully enforced due to the economics slow down, each agency seeked way to survive and pursued its own course to win new business. Unfortunately, the same issue is now escalated to become a major problem for the industry once more in the area of unnecessary time and financial investment on the so call - pitch. The Association has no alternative but to look into the matter once more in order to safe guard its member agencies from unfair practice by some clients. The issue is now being put into motion at the Executive Committees Level for drafting up new rules and regulations to be put into practice by its members. Members would be informed of further development on this issue.

The IBSA which calls itself "the voice of British advertisers", writes about the issue of best practices in relation to remuneration and working with agencies.

Advertisers want and need the best talent, strategic thinking and creativity from their agencies. Yet many agencies claim falling margins and reduced resources as a result of advertisers' use of procurement specialists to drive a new business realism into relationships. ISBA sees the need to develop thinking around new 'value-focused' remuneration models which reward more directly the effectiveness of agency work. ISBA is working with agency body the IPA, and procurement trade body CIPS, to construct new payment models and solutions, recognising that a new 'best practice vision' for agency remuneration focused more directly on 'paying for value' is very much in advertisers' long-term interest. Several high profile initiatives, including a 'best practice guide' on agency remuneration and negotiation, a joint industry guide on 'evaluation and effectiveness' and a 'Green Paper' on new thinking for remuneration will be launched over the coming year.

So it looks as if they are working towards finding a new middle ground for both advertisers and ad agencies. The Association of National Advertisiers in the US interviewed over 100 agency professionals in a study that found "the top three things agencies want from clients is respect/trust (57%), followed by fair payment (41%) and communications (including criticism) at 39%." Respect and trust are required for fair payment. Clients that do not respect the work of the agency, be it in a pitch or at any other time, will not bother to pay fairly. The other aspect to this is, if you are going to be giving the work away for free, why should a client expect that they should be paying anything but the least they can get from you? Leslie posted a brilliant article New Challenges from the Lowballers...And What to Do About 'Em, which hit on this very point. If you haven't read it yet, you really should. The World Intellectual Property Organization points out, in a piece by Lien Verbauwhede, the legal issues on ownership of IP which can easily become an issue, especially if you're giving work away for free.

If your advertisement has been developed by an employee who is employed for this purpose, then, in most countries, you (as the employer) would own the copyright over the advertisement, unless you otherwise agreed with your employee. However, many companies outsource the creation of their advertising campaigns to an outside contractor, and assume they own IP rights in it, simply because they paid for the work. Beware! You may be surprised to find out that you do not own the IP rights in what has been created for you. Independent contractors (unlike employees) usually own all IP rights in the works they create – even if you have paid for it -, unless otherwise agreed in a written contract.

It is highly likely that there are a lot of clients who are looking for free ideas when they ask for spec work, be it from an agency, freelancer, or photographer. If they do end up using ideas that you have pitched, and you are not under any contract with them, then you own the rights to the work, usually. I'm not advocating starting a rush of lawsuits, but, perhaps it might be the only way for those who do not respect the work of creatives to really get it. And considering that those who do not pay or don't want to pay for spec work are most likely penny pincher types, hitting them in the wallet might be the only way to get them to take notice of their unethical practices. The World Federation of Advertisers pointed to this article on the ANA's site from 2002.

The American Association of Advertising Agencies and the Association of National Advertisers, Inc., today released a joint position paper outlining for the first time ever a set of guidelines covering compensation agreements between agencies and advertisers. The "Guiding Principles" establish a dozen points that the joint task force agreed are found in the most effective compensation agreements. Among others, the guidelines state that the best compensation programs: - Align advertiser and agency interests and priorities - Match compensation with the resources required to do the work - Establish agreement on key compensation definitions and terms up front - Do not favor one solution/service over another - Are finalized before agency resources are committed. The "Best & Worst Practices" section of the position paper provides a wide selection of principles covering the gamut of current compensation agreements. These include fees (fixed, hourly and cost-plus); commission agreements; and incentive compensation deals.

And yet, in 2003, we heard yet again that spec work was becoming common again after agencies fought it 10 years ago.

One PROMO 100 agency CFO suggested at a recent American Association for Advertising Agencies financial conference that agencies should agree not to do spec work, but shops wouldn't band together for fear that a hungry little startup would proffer ideas, and so win the business. "I've had agencies offer to do spec work and I won't take it," says Lund. "I want absolutely no confusion, and if I pay for something, it's clear that it's mine. The easiest way to avoid hard feelings is to pay for what you want." Agencies partly bring problems on themselves by being too competitive. "It's not that reviews are demanding more — the process has been similar the last five years — but agencies are pouring more into it because they need to win business," says Pile & Co.'s Neer. "Once business is robust again, we won't see that same competitiveness. Agencies will be more selective about what they pitch." Meanwhile, agency execs should recognize that marketers are trying to be fair. And marketers should recognize that agencies want to — and can — build business. "The goal is to have more money in clients' pockets at the end of the day," says Kramer. "The question is, do you want more money because I charged you less, or because I helped you sell more?"

I did find some uplifting news though. I came across Mortar Advertising's web site and found their approach section fascinating.

Our ideas are our only asset. Most advertising agencies operate on pretty skimpy margins. And the fact is, Mortar was founded by a couple of creative guys with a real aversion to numbers. So we're not in this thing solely for the money. But we're in business to provide our clients with big ideas that will generate healthy returns. And, like anybody else, we expect to be fairly compensated for our time and effort. Spec work isn't worth it. We hate "pitching." There, we said it. But here's the thing, in most pitch situations companies give us just enough information to be dangerous. And we spend way too much time and money on work that will never see the light of day. Who wins? Probably the team you like best, right? So let's make things comfortable from the beginning. Give us a small test project. Let's find out if we work well together on a real world challenge. In the long run, it'll be better for you. And for us.

If only more ad agencies would take up this philosophy, maybe it would remove the idea in client's heads that they can get something for nothing. When the Olympic committee decided to make a contest out of the design pitch for the Vancouver 2010 logo, there were plenty of designers who wrote letters to the committee stating that they could not enter as it violated the ethics and policy of the design groups to which they belonged. All in all the issue of free spec will most likely never go away. We cannot police every single creative in the world. And there will always be someone willing to do work for free, in the hopes that they will be able to get more work out of it. The thing is all that does is devalue the work for themselves and everyone else in the industry. Beyond the economics of it all it's an very unethical way of doing business and it also doesn't create great work for the client. Perhaps some day the advertising associations will follow in the steps of the design organizations. But for now all we can do is remember the value of our work, and attempt to stand firm on unethical business practices.