Advertising Review Board annual report 2014-2015

Message from the Chair

The past 12 months marked another year of ongoing achievement and progress for the Advertising Review Board (ARB), while operating as the government’s primary contact with the advertising and communications industries, and delivering on its mandated programs to support client organizations in their efforts to serve the public interest.

We have continued to work hard and remain focused on strengthening the trust and confidence internal and external communities have in us, and building on the integrity, transparency and fairness of our best-in-class procurement methods and processes.

Notable accomplishments for 2014-15 included:

• finalizing the open competition to create a new corporate Vendor of Record (VOR) arrangement for graphic design and creative services
• completing two open competitive processes for the Ministries of Economic Development, Employment and Infrastructure and Citizenship, Immigration and International Trade to formalize new advertising and communications services contracts in support of investment attraction and export promotion programs in global markets
• initiating the open competitions to establish new enterprise wide VOR contracts for media planning and buying services and public notices and recruitment advertising
• managing 31 second stage supplier selections involving the assignment of projects  to companies in the contracted advertising and public relations services pools, and 19 second stage selections for graphic design services
• improvements to the centralized management of the two contracted media planning and buying agencies of record (AORs)
• organizing the successful “Change Makers Conference” public sector advertising and social marketing event held as part of “FFWD Advertising & Marketing Week”
• providing funding support to five multicultural marketing campaigns through the Corporate Communications Fund
• implementing a client satisfaction survey to benchmark ARB’s performance and service levels
• supporting the Office of the Auditor General of Ontario with the reporting of 2014-15 media expenditures for reviewable ministry advertising items under the Government Advertising Act, 2004

Feedback from government clients and industry stakeholders continues to be very positive, reflecting strong levels of satisfaction with our subject matter knowledge, provision of sound advice and solutions, and established programs for the timely, efficient and responsible acquisition of supplier services.

We are pleased the ARB has established itself as a well-respected and credible body, both internally and externally. This is a testament to the leadership and reputation of ARB’s senior management and members of the Board, each of whom brings extensive senior level advertising and communications industry expertise to their roles.

I wish to recognize the many significant contributions of Michel Frappier, Past Chair, that were highly influential in shaping the organization’s profile within key communities throughout his 10-year term.

Additionally, and on his behalf, a note of thanks to the ARB team for their dedication and professionalism, and to my private sector member colleagues for their support and advice during the past year. They continue to be exemplary in their efforts to uphold the reputation of the ARB as a reliable, responsive and collaborative business partner.

Together we look forward to further enhancing the quality and delivery of our services, and strengthening our many valued partnerships in the years ahead.

Kiriakos (Charlie) Angelakos
Interim Chair & Part-Time Private Sector Member

Background and mandate

Established in September 1985, the Advertising Review Board (ARB) is a regulatory agency of the Ministry of Government and Consumer Services (MGCS).

Under the authority of the Management Board of Cabinet (MBC) Procurement Directive on Advertising, Public and Media Relations, and Creative Communications Services, the ARB is designated as a mandatory central common service for the procurement of Ontario government advertising and communications services, to ensure ministries and government agencies acquire these services in a manner that is fair, open, transparent and accessible to qualified suppliers.

The mandated activities of the ARB are to:

• function as the Ontario government’s primary contact with the advertising and communications sectors
• provide ministries and government agencies with assistance and advice on the acquisition of advertising and communications services
• establish all mandatory, corporate Vendor of Record (VOR) arrangements for advertising, public and media relations, and creative communications services through open competitive processes, including the two agency of record (AOR) contracts for media planning and buying services
• conduct all competitive and non-competitive procurements, including second stage selection from existing corporate VOR arrangements, with an estimated contract value^{footnote 1[1]} of $100,000 or more
• conduct, when requested by ministries and government agencies, competitive and non-competitive procurements, including second stage selection from VOR arrangements, with an estimated value between $25,000 and $100,000
• monitor and report on compliance with the Procurement Directive on Advertising, Public and Media Relations, and Creative Communications Services

Corporate VOR arrangements consist of advertising and communications suppliers that are pre-authorized to bid competitively for government projects. The open competitions to establish these contracts are both extensive and rigorous, and are conducted by the ARB in strict adherence to the principles of fairness, accessibility and transparency that conform to government procurement guidelines and policies.

Contracts valued at $25,000 and more are competitively awarded based on supplier capability and experience. Second stage selections from existing corporate VOR arrangements typically involve three or more candidates. Ministries and government agencies may use their own procedures for the acquisition of services valued at less than $25,000 provided the principles of access, equity and value for money are considered. Contracts cannot be split to allow for the awarding of multiple contracts to the same supplier, each valued at less than $25,000 but totaling more than $25,000 – each must be unique and the terms of reference must be substantively different.

Overview of programs and activities

Procurement of advertising and communications services

A primary activity of the Advertising Review Board (ARB) is the fair and transparent procurement of advertising, public and media relations, and creative communications services for government clients. The organization has well established processes in place to fulfill this mandate.
Corporate contract arrangements that have been created by the ARB for mandatory use by ministries and government agencies include:

• two advertising and marketing communications services pools (35 companies)
• public relations and communications services pool (18 firms)
• graphic design and creative services Vendor of Record (VOR) (60 companies)
• media planning and buying agency of record (AOR)
• AOR for regulatory, statutory and tender notices, and recruitment advertising

Developed by the ARB to provide qualified suppliers with fair and equitable access to Ontario government business, the large-scale open competitions used to create the corporate supplier pools and VORs are extensive and rigorous and usually require several months to complete. There are typically two stages:

• evaluation of written proponent submissions and
• capability presentations by the short listed candidates

Contract opportunities are advertised nationally in accordance with Ontario’s trade agreements and appear in both print and electronic publications, including The Globe and Mail ROB, National Post and online editions of Marketing Magazine. Interested parties must respond in writing by a specific closing date.

Respondents are invited to attend a mandatory briefing where the competitive process and client service requirements are outlined, and a detailed information package is provided that includes the competition timelines, account profile with full contract details, capability questionnaire, conflict of interest and tax compliance declarations, description of the government’s contractor security clearance process, mandatory requirements and pro forma agreement.

Proponents are required to attend the mandatory briefing session in order to participate in the competitive process, and a teleconferencing option is always offered. There is an opportunity for written questions following the briefing, which are responded to in writing and shared with all attending candidate companies.
The first competitive requirement involves proponents’ submission of written proposals in response to the capability questionnaire by a specified due date and time. All rated criteria relate directly to the evaluation of capability and relevant experience and have assigned points. Candidate submissions are provided to review panel members, who score independently against the questionnaire values. Review panels typically consist of the ARB Chair and/or Managing Director, one or more Private Sector Members and up to two senior client representatives.

Following the independent evaluation of written submissions, panel member scores are tabulated and the short list is established. Candidates with submission scores that meet the minimum published threshold advance to the final stage of the competitive process.

Short listed proponents are required to attend a secondary mandatory briefing where the next stage of the competition is explained. A description of the final capability and selection criteria is distributed and lots are drawn for presentation times. An opportunity for written questions is also provided. No further contact between candidates and the review panel is permitted after this meeting.

The outcome of the ARB competitive process is determined by the final capability stage. For the corporate supplier pools and VORs, all short listed proponents whose scores meet the minimum published requirement are recommended. When a single contract is being awarded, the candidate with the highest total score is declared the winner. Prior to the awarding of contracts, the final supplier recommendations are approved by the Deputy Minister of Government Services.

Contracted suppliers in the corporate pools and VORs are required to be available to bid for future government projects on a non-exclusive basis. There is no guarantee of any dollar volume of work or that projects will be allocated equally, a condition that all interested and successful proponents are made aware of in writing.

Specific projects are awarded to these suppliers on the basis of competitive second stage selection. When client requirements cannot be serviced by existing corporate arrangements, due to unique or highly specialized supplier requirements or timing, consideration is given to undertaking an invitational or open competitive process.

In order to initiate a second stage supplier selection for the procurement of services, government clients are required to provide a detailed project brief to the ARB. This document outlines the advertising or communications need, scope of services and deliverables, estimated budget and proposed term of the supplier engagement.

The ARB recommends three or more candidate firms from the appropriate pool or VOR arrangement who will be invited to make in-person capability presentations or submit written proposals in response to the client briefing document. These are evaluated by a selection panel comprised of ARB and/or client representatives, depending on the total estimated contract value.

Second stage supplier selections are determined by client needs, relevant supplier capabilities and experience, demonstrated results on previous projects and proposed professional fees. These criteria are judged by the scoring panel based on the proven ability of candidates to successfully service client requirements.

Any proponent may request a debriefing on their written submission and/or capability presentation following the completion of an open competitive first stage process or invitational competitive second stage selection. For open competitions, short-listed candidates who are not awarded a contract are automatically offered a debriefing.

Debriefing sessions consist of a quantitative and qualitative review of the proponent’s submission and/or presentation. Industry response to ARB debriefings has always been highly positive. Many suppliers have reported that they have been able to successfully leverage this feedback to improve their subsequent submissions and/or presentations.

Media AOR management

Management of the two government media planning and buying AOR relationships is another major responsibility of the ARB, to ensure government clients are well served by these suppliers, and receive good value for their advertising spending in terms of cost efficiency and effectiveness.

In addition to liaising with the media AOR suppliers on an ongoing basis, this involves the monitoring of enterprise wide advertising expenditures and placements, providing informed counsel to clients on all aspects of their media requirements, identifying new opportunities for improved tracking and annual development of comprehensive guides.

The media landscape is dynamic and ever-changing, which requires the ARB to remain informed of new communications channels, as well as transformative developments in media planning, buying and measurement techniques.

Reporting

Monitoring compliance with the MBC Procurement Directive on Advertising, Public and Media Relations, and Creative Communications Services is undertaken by reporting annually on the use of advertising and communications services by ministries and government agencies. Responses from government client organizations for 2014-15 indicate that there is compliance with procurement requirements and guidelines.

The Government Advertising Act, 2004 includes a requirement for the Office of the Auditor General to report on annual ministry expenditures for reviewable advertising items. The two media AORs are a primary source for this information.

Corporate Communications Fund (CCF)

The ARB administers the CCF to support advertising campaigns in ethnic community and Aboriginal media. Funding may also be provided for corporate and multi-ministry initiatives. Clients must submit a funding request to the ARB with full program details.

Review of operations

Open competitive processes

Graphic design and creative services vendor of record

The 16-week open competition to establish a new corporate Vendor of Record (VOR) for graphic design and creative services was finalized. Initiated in 2013-14 with the posting of the competition document on the MERX electronic tendering system, this competitive process resulted in non-exclusive contracts being awarded to 60 qualified suppliers for a three-year term.

Ministry of Economic Development, Employment & Infrastructure (MEDEI) / Ministry of Citizenship, Immigration and International Trade (MCIIT)

International advertising and communications services competitions

Two 18-week open competitive processes were undertaken to form new multi-year advertising and communications services contracts in support of the ministries’ investment attraction and export promotion programs in global markets.

The advertising and marketing communications services competition drew 24 letters of intent to compete and 22 parties attended the mandatory briefing of proponents. Four written submissions were received and three candidates were short listed to make final capability presentations.

A total of 16 parties responded to the public relations and communications services competition notice with letters of intent and 15 proponents attended the mandatory briefing. Six written submissions were received and four candidates advanced to the capability presentation short list.

Each competition resulted in a single contract being awarded for a three-year term. FCB Canada was the successful finalist in the advertising services competitive process and Edelman Canada won the communications services competition.

Media planning and buying Agency of Record (AOR) competitions

The extensive and rigorous open competitions to establish new enterprise-wide contracts for government media planning and buying services and public notices and recruitment advertising services commenced in early 2015 for completion in 2015-16.

Second stage supplier selections

Considerable ARB activity was dedicated to supporting the competitive second stage selection of contracted suppliers to fulfill the particular needs of government clients. Procurements for contracts valued at $100,000 or more were directly managed by the ARB, and processes for assignments valued at less than $100,000 were handled by individual ministries and government agencies under the ARB’s guidance and oversight.

Advertising and marketing communications services pools

In 2015 the ARB exercised its option to extend these mandatory-use corporate contracts for a final two-year term.

Throughout the year, 16 second stage selections for contracts valued at $25,000 ^{footnote 2[2]} and more were undertaken from existing VOR arrangements on behalf of 12 government client organizations.

Public relations and communications services pool

A total of 15 second stage selections from the mandatory-use corporate VOR were completed for 10 ministries and government agencies for projects valued at $25,000 and more.­

Graphic design and creative services VOR

The needs of 16 government organizations were fulfilled through 19 second stage selections that were undertaken from the corporate graphic design and creative services VOR. These were for a variety of projects valued $25,000 and more.

Competition oversight

The ARB observed four open competitive supplier selection processes for the Ontario Lottery and Gaming Corporation to ensure conformity with established procurement guidelines and best practices.

Media AOR management

ARB’s centralized direction and dedicated oversight for the two media planning and buying AOR relationships continued to strengthen throughout the year, driven by the organization’s critical and evolving media management role.

One of the key priorities of this function is to enforce greater supplier accountability for the efficient and effective allocation of government advertising expenditures to ensure these compare favorably with the general Ontario market.

As part of an ongoing initiative to evaluate the relative cost efficiencies of government broadcast campaigns against industry benchmarks and standards, a third party audit of fall 2013 television buys was undertaken.
The results of this audit confirmed government campaigns have cost efficiencies that are better than the market average.

Another primary and ongoing responsibility of the media AOR management role is to monitor the quality and timely provision of services by these suppliers in delivering against increasingly complex client requirements.

During the year, the ARB consulted regularly with ministries and government agencies on a wide range of media matters, including major planned campaigns, and conducted reviews of AOR supplier activities.

Corporate Communications Fund (CCF)

Five multicultural marketing communications programs were supported during the year.

Industry relations

The ARB supports the interests of three key communications industry organizations: Advertising Standards Canada (ASC), the Association of Canadian Advertisers (ACA) and the Institute of Communication Agencies (ICA).

In 2015, the ARB planned and organized the “Change Makers Conference” – a public sector social marketing communications event held in January during the ICA’s “FFWD Advertising & Marketing Week”.

This major, high-profile stakeholder relations initiative is attended annually by 350 representatives from the communications industries, government client organizations and the broader public sector. Feedback to the half-day session continues to be extremely positive.

Another important aspect to maintaining favourable industry relations is the ongoing accessibility of the organization. More than 80 companies were debriefed by the ARB during 2014-15.

Communication and education activities

The ARB has a diverse and complex network of stakeholders:

• general public
• advertising and communications communities
• government client organization communications staff at all levels
• ministry staff
• central agencies

Key messages communicated to these constituents continued to focus on corporate directives, as well as ARB procurement processes and services.

Government client communications have been enhanced with ongoing refinements to the ARB Intranet site, and electronic distribution of comprehensive User Guides for the corporate pools and VORs. These contain detailed guidelines on the acquisition and use of advertising and communications services, as well as tools and templates.

Staffing

During the past year, the ARB employed four full-time staff:

• Managing Director
• Media AOR Manager
• Senior Communications Advisor/Board Secretary
• Information Coordinator

Fiscal performance

The ARB financial expenditures for 2014-15 were $1.049-million:

MBC Authorized Allocation; and Actual expenditures. Expenditures are lower than appropriations.

MBC Authorized and Actual Expenditures>

* Represents 2014-15 Printed Estimates Allocation and in-year TBO approvals
** CCF: $252,085

Operational performance

The ARB assesses its annual performance against the following:

• ensuring the timely and efficient acquisition of advertising and communications services through fair and transparent competitive selection processes that comply with the MBC Procurement Directive on Advertising, Public and Media Relations, and Creative Communications Services
• reinforcing its reputation as a respected and responsive business partner among internal clients and stakeholders, as well as external communications communities
• delivering value-added expertise in servicing government client requirements
• continuous improvement to the organization’s portfolio of service offerings
• compliance with service standards as required by the OPS Service Directive

Client satisfaction survey

In Q4, the first annual client satisfaction survey was implemented to provide measurable feedback on ARB’s service levels. Responses were highly favourable and represented the opinions of 31 ministry and government agency organizations.

• all those who responded affirmed the ARB delivers its programs and services in a professional manner, is a trusted advisor and maintains high standards
• 98.2% of respondents agreed the ARB is knowledgeable about government advertising and communications services procurement
• 96.4% reported the ARB meets or exceeds expectations
• 94.6% concurred with statements that the ARB is a valued business partner, and enables clients to readily access the communications services they require

ARB Board

The current ARB Board is comprised of three part-time private sector members, one of whom is serving as interim Chair. All are Ministerial appointments pursuant to the MBC Agencies and Appointments Directive.

Per diem remuneration while acting on ARB matters is $627 for the Chair and $398 for other members.

Total per diem payments for the year were $112,771.

Interim Chair *
Kiriakos (Charlie) Angelakos
* June 2, 2015 – December 1, 2015

Part-Time Private Sector Members:

Kiriakos (Charlie) Angelakos
July 5, 2012 – September 9, 2017

Freda Colbourne
August 8, 2013 – August 7, 2015

Heather MacLean
September 23, 2010 – September 22, 2015

Past Chair
Michel Frappier
June 1, 2004 – June 1, 2015