Everbeauty's 20pc discount riles rivals

<p>TAIPEI: Everbeauty, the in-house advertising arm of the Evergreen </p><p>Group, has sparked an uproar after it won the NT$160 million </p><p>(US$4.6 million) China External Trade Development Council (Cetra) </p><p>trade exhibition account by offering an unusually deep discount. </p><p><BR><BR> </p><p>In what is seen as an industry first, Cetra requested agencies to pitch </p><p>on media price. Marketing strategy, media planning or creative </p><p>recommendations were not required for the review. When the bids were </p><p>opened, the industry was shocked to learn that Everbeauty won the </p><p>two-year assignment on a 20.11 per cent discount, meaning that the </p><p>$4.6 million account became a $3.68 million job. </p><p><BR><BR> </p><p>Incumbent, Saatchi & Saatchi, presented an eight per cent discount, </p><p>while Regal and DY&R offered cuts of six and 5.6 per cent </p><p>respectively. </p><p><BR><BR> </p><p>One agency participant said: "This wasn't a pitch. It was an auction. If </p><p>Everbeauty keeps the account but can't deliver its discount, it should </p><p>be fined." </p><p><BR><BR> </p><p>The managing director of a competing agency added: "There is no way </p><p>Everbeauty can make a profit, no matter how it juggles the media." </p><p><BR><BR> </p><p>Under Cetra's terms, all media discounts, including for volume and early </p><p>bookings, must be returned to the client before commission is paid. In </p><p>addition, Cetra's ads are normally placed in international print titles </p><p>which do not offer commissions in excess of 20 per cent. </p><p><BR><BR> </p><p>Everbeauty declined to comment on its strategy. </p><p><BR><BR> </p><p>Others expressed concerns that Cetra would allow Everbeauty to quietly </p><p>renegotiate once the uproar dies down. Some believe Everbeauty, as a </p><p>member of one of Taiwan's largest conglomerates, may have the clout to </p><p>do just that. Everbeauty was formed to publish the inflight magazine of </p><p>the group's airline. Although it handles a few client accounts, it </p><p>hardly ranks as a full-fledged agency, outsourcing for many services. </p><p><BR><BR> </p>