Everbeauty's 20pc discount riles rivals

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

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