Chapter Sixteen: The Relationship Between the Advertising Agency and Its Client

Form 2.16.4

General Scope of Work (SOW)

I. Executive Summary

This SOW includes the detailed scope of services that Agency will perform for Client as its
general agency of record. Agency will provide services related to Clients strategic marketing
communications needs in the areas of brand planning as it pertains to communications, media
planning and buying, creative, and research. These services will be delivered over a one-year
period, beginning [date] and concluding [date].

II. Agencys services are described as follows.

Agency Services

The following sections outline in detail the services that Agency will provide to support
these initiatives.

A. Brand Planning and Account Management Services

1. Manage overall relationship with Client, as well as its media and interactive
agencies of record.

2. Provide strategic brand insight and direction that pertain to marketing

communications at the corporate and product level.

3. Act as primary contact for Clients team, channeling questions and requests.

4. Ongoing involvement in key research initiatives such as Millward Brown

brand awareness and tracking, and DR quantitative research to determine
communications effectiveness

5. Define the overarching marketing communications strategy for Client, and

ensure the overall marketing communications and offline strategies, as well as the
brand positions, are communicated to the media and interactive agencies of
record.

6. Develop creative briefs, upon receipt of input document from Client, for each
project that describe the strategy, specific goals and message of each project.

7. Manage all ongoing projects, including timelines, budgets and invoices.

8. Monitoring of annual trends and ongoing analysis of consumer attitudes and

behavior.

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9. Lead and participate in weekly status meetings and reviews with Client and
internal teams.

10. Lead, manage and coordinate the Agency team across disciplines.

11. Coordinate with other agencies to ensure an integrated marketing approach

and strategy for Client.

12. Provide one annual competitive spending data and analysis, as well as
trending data presentation and then subsequent quarterly updates.

13. Accurately manage and track clients budget, providing accurate and timely
monthly billing book and accrual reports.

14. Familiarize its employees assigned to the Client account with Clients
business, products, services, advertising, and media plans, and with the business,
products, services, marketing communications, and media plans of Client
competitors.

15. Study and analyze the markets and audiences for the Business, as well as the
key competitors strategies, programs, and spending.

16. Contribute to and advise Client on the development and implementation of

marketing plans, including marketing communications, advertising, strategy and
account planning, and research for the contract and subsequent year.

17. As requested by Client in writing, create, prepare, and submit for Client
approval, marketing communications plans, marketing communications and
advertising concepts, rough layouts, rough storyboards, photostats, paste-ups,
mechanicals, and the like, and plans for the development and execution thereof.

18. Execute and implement marketing communications and advertising in finished

form, in accordance with Clients timely prior written approval, and estimate
approval, and forward same to production and media with proper instructions.

19. Traffic and disperse all necessary materials to media suppliers, printers, and
all other third parties needed to accomplish Client approved marketing
communications, and advertising ideas, programs, and campaigns.

20. Assess secondary research findings, as well as findings from Client supplied
studies that include Millward Brown and DR, to determine brand marketing
communications effectiveness, opportunities, and needs.

21. Provide, on an ongoing basis, necessary and appropriate general informational

and syndicated consumer (e.g., attitudes and behavior) and travel trend research as
well as media research relating to the Business, and services and to those of
Clients key competitors.

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 22. Provide in-depth analysis via presentation and written report on key
competitor spending.

23. Ongoing contributions to strategic point-of-views, marketing plans for new

initiatives and/or products, as well as major presentations to senior management.

24. Take all reasonable precautions to guard against any loss to the Client through
the failure of suppliers to execute properly their commitments.

25. Take all reasonable precautions to safeguard any and all of Clients property
entrusted to Agencys care, custody, or control.

B. Creative Services

1. Develop and execute national multi-media advertising plan:

a) Broadcast

(1) Television

(a) [number] base TV spots, and re-edits for [flight]

periods, with at [number] edits produced by [date].

(b) Scope will cover conceptual/development, testing and

research, revisions based on learning/feedback, internal
presentations and selling to Client senior team, Marketing
department and key licensees.

(c) Management of all talent and music contracts, including

licensing, holding fees and residual payments

(d) Coordination of traffic, dubbing and

billboards/enhancements

(e) Training videos are not included and will be estimated

at Agency Production Rates as per Exhibit [x] billed
separately, according to Client budget/approvals.

(2) Radio

(a) New radio spots each year ([number] per promotional

period for an annual total of [number] spots) produced by
[date].

(b) Scope will cover conceptual/development, revisions

based on feedback, internal presentations and selling to
Client stakeholders and licensees as required

(c) Management of all talent and music contracts, including

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 licensing, holding fees and residual payments

(d) Coordination of traffic, dubbing and

billboards/enhancements

(e) Create and produce enhancement copy and other added-

value materials that include :05 and :10 billboards

b) Print

(1) Brand/corporate concepts for continuity print needs

(a) National consumer and intermediary magazine and

newspaper ads

(b) Budget insert supplement

(c) Senior print

(d) Single brand messaging print

(2) Promotional Midscale and Economy concepts for Spring,

Summer and Fall seasons

(a) National consumer and intermediary magazine and

newspaper

(b) Resize and edit materials according to media plan

(3) Out-of-home concept and development

(4) Point-of-Purchase

(a) POP materials for midscale and economy promotions

(b) On-hold telephone scripts

2. Development Advertising

a) Development and execution of franchise sales advertising plan

(1) Core print multi-brand and single-brand concepts within new

2006 campaign

(2) Emerging market advertising that includes incentive, African

American and Hispanic franchise sales print ad concept and
industry specific concept (e.g., QSR)

(3) Photo shoot for print campaign needs

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 (4) Resize and edit materials according to media plan

(5) Negotiation management and creative/conception/production

of added value enhancements

b) Develop marketing campaigns (conception, information architecture,

creative design, copywriting, graphical design and resizing, and final
mechanicals) based on previously defined marketing programs and
projects.

c) Proofread all copy created by Agency, including copy approved by the

Client, and insure that all such materials deemed approved have been
reviewed and approved through Clients internal review process.

d) Provide creative consulting, sharing with Client the Agencys best

practices expertise for brand advocacy and creative continuity.

e) Participate in weekly Agency account meetings, reviews, requirements

sessions, and briefings.

C. Media Services

1. All corporate campaigns account for approximately [dollar amount] net in

media spending.

2. Planning responsibilities include:

a) Media plan development, refinements and amendments, as needed

throughout the course of the fiscal year.

b) Target audience development for all core general market targets.

c) Media planning will include the use of all media vehicles as needed
based on strategic direction (network TV, cable TV, radio, consumer print,
trade print, outdoor, etc.)

d) Diversity efforts (African American and Hispanic)

e) Coordinate with Agency.com in developing cohesive national, fully

integrated media plan that aligns goals and timing/flighting.

3. All broadcast media buying will be performed by Agency include:

a) Pre-buy estimates

b) Goal accountability and defined delivery as well as cancellation

guarantees

c) Buy negotiations

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 d) Program/station determination

e) Added value negotiations/recap

f) Timely TV and radio post-buy analyses and all billing/payment of

invoices.

4. All print/outdoor media buying will be performed by Agency as needed.

Responsibilities include:

a) Processing all insertion orders

b) Contracts and negotiation/placement/monitoring of advertising

c) Added value promotions and a position summary for all print

placements

5. Coordinate with other Agency disciplines, internal Client resources, and third
party providers to establish and maintain reporting systems against key ROI
metrics, e.g., plan impression goal v. delivery, as well as provide all appropriate
data to Clients marketing ROI modeling firm in a timely manner.

6. Provide written post buy analyses per seasonal promotion for broadcast as
well as an annual plan post buy analysis that encompasses all media (broadcast,
print, etc.) planned and purchased by the Agency.

7. Develop and execute comprehensive media strategy to maximize ROI against

all offline promotional, continuity and activity

8. Create holistic media plan recommendations reflective of the key metrics,

research against the target audience, and creative direction.

9. Pro-actively identify and assess new opportunities and developments in media

consumption and viewpoints that may impact Client in the short and long term

10. Maintain superior negotiation and stewardship of Client media buys

11. Participate in weekly Agency account meetings, reviews, requirements

sessions, and briefings

12. Client vigilance

a) Establish with financial department all necessary processing systems

to enable Agency to make financial payments to media in accordance with
Agencys policy for all media originating from Agency

b) Make all necessary revisions/amendments to plan based on any or all

changes through fiscal period

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 c) As appropriate or requested, evaluate and present media opportunities
for Client consideration through contract period

d) Resolve all billing discrepancies throughout the stated period for all
media originating from Agency.

13. Co-op media strategy, planning, buying

14. Research and modeling

a) Agency will provide data to Clients media/marketing research vendor

in a timely manner.

D. Marketing Campaigns

Agency will provide consumer and intermediary marketing campaigns based on the
overarching campaign for:

1. Seasonal promotions, as follows:

a) Summer

b) Fall

c) Winter

d) Spring

e) Year-round continuity campaign targeted to consumers and

intermediaries

f) Single-branded communications (brand descriptors)

2. Agency will provide development/franchise sales marketing campaigns for the

year:

a) Annual multi-branded campaign

b) Emerging markets multi-branded and single branded campaign

3. The Agency will evaluate and make any recommendations regarding the
overarching campaign, and provide updated or new campaign that will support:

a) International platform

b) Multi-brand and single brand messaging

c) Program and promotional messaging, which may or may not include

marketing partners

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 d) Consumer, intermediary and development target audiences

e) Extension to regional and local market (handled at regional/local level)

4. With each campaign, Agency will work closely with Clients online agency of
record (Agency.com) to ensure that all campaigns are consistent across all media.

III. Process

The Agency will follow the Phases listed below. The process may be modified based on the
needs of each campaign.

A. Phase 1 Kick-off

The objective of the kick-off phase is to ensure that all Client, Agency and Agency.com
team members have a common understanding of each campaign and that the campaign
objectives are understood. This is done by conducting the following:

1. Conduct a kick-off briefing meeting with Client and Agency.com to

understand key objectives and seasonal offer, and secure all creative assets and
media inputs. Kick-off meeting would be set upon receipt of Client input brief.

2. Develop/update the Campaign Creative Brief, which is the campaign creative

baseline that all agencies will work from, for new campaigns. It will be updated as
needed for subsequent campaigns and includes brand positioning, brand strategy,
customer mindset and demographic definition, fonts, color palette, imagery and
personas

3. Develop the Tactical Brief. For each campaign, the Tactical Brief will be
developed and provides the single minded message, target audience, desired user
response, seasonal offer, campaign objectives and metrics, and media budget and
flighting. This brief will be developed from the Client input brief. For each
campaign, Agency will also develop a campaign/production calendar, noting all
critical dates to reach launch date.

4. Establish and prioritize key metrics and define measurement methodology.

Review all past performance data to establish baselines and incorporate key
learnings. Coordinate with online agency and appropriate internal resources on all
offline and client-directed media activity to ensure that direction in brief and
media plan are in sync. Draft the Annual Media Brief. The Annual Media Brief
details the media strategy and outlines general planning parameters for the
calendar year.

5. Client reviews and approves all Briefs.

6. Brief internal creative and media teams. Once the briefs are approved, Client
will brief the Agency.com team.

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B. Phase 2 Conception and Planning

During the conception and planning phase, Agency will develop the core campaign
concepts that the ad units will adhere to, and will develop the media plans. The first step
is to conduct a brainstorming session with Agency to discuss concepts. Afterwards,
Agency will:

1. Present concepts to Client to select creative direction

2. Develop the Ad Units design for the selected concept

3. Develop all necessary materials, including TV storyboards, print, collateral,

POP, radio, etc.

4. Finalize creative direction/concepts

5. Obtain approval from Client (including any Client marketing partners and
legal representative, if needed, which Client is responsible for obtaining)

6. Develop the Media Plan

7. Use third party research tools, including feedback from Clients marketing
ROI modeling firm, to further define and segment online target audience online
and develop top media candidates for consideration

8. Obtain approval from Client on initial media approach and consideration set

9. Develop and issue RFPs to media consideration set

10. Coordinate efforts with Clients interactive agency

11. Review existing media commitments and provide recommendations to

maximize value from these investments with future commitments or drop from
plan

12. Evaluate proposals against selection criteria and further refine media
consideration set

13. Begin to negotiate rates, placements, creative options, and deal term

14. Develop the creative specifications sheet

15. Present media plan recommendation, rationale, and associated projections;

revise plan as requested

C. Phase 3 Execution

During the execution phase is when the Agency composes all mechanicals and
records/edits broadcast work. Agencys media team will purchase, implement, and

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manage the offline media buys for consumer, intermediary, extended stay and
development. Specifically Agency will:

1. Develop the Ad and POP Units

a) Follow bid and vendor management best practices and steps covered in
MSA

b) Purchase third party elements within budget

c) Provide actual size proofs for approval

d) Deliver electronic files of final print and POP mechanicals upon

completion

e) Maintain proper job jackets and expense records for billing and
auditing purposes

f) Develop and follow approved creative rotation

2. Buy media and launch

a) Create a media authorization(s) for Client approval

b) Issue insertion orders to all approved media properties

c) Finalize the media specification sheet

d) Traffic the ad units

e) Issue insertion orders to all approved media properties

f) Ensure correct tracking implementation and compliance from media

vendors

g) Input media authorization into media operations system to establish

billing cycle

h) Keep accurate and detailed media files

i) Provide plan details and updates/changes upon approval to Clients

marketing ROI modeling firm as well as Clients online agency

D. Phase 4 Media Optimization and Creative Attunement

After the ad/POP units are trafficked, one of the most important phases is monitoring the
performance of the media and creative, and making any adjustments as needed.
Specifically, the Agency will:\

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 1. Monitor all reporting systems to ensure campaigns are running correctly and
impression bought are delivered; provided related post-buy analyses

2. Manage and deliver data and performance reports to Clients marketing ROI
modeling company

3. Monitor trends in industry and economy, as well as Ground Voyager and

development targets, and report findings and recommendations in a timely manner

4. Upon approval of Client, adjust media plan and campaign if warranted

5. Manage all media finance including issuance of monthly spending summaries

to Client, review of all vendor media invoices against authorized and delivered
activity, resolution of spending discrepancies with vendors, payment to media
vendors, and full reconciliation of media dollars to Client

IV. Deliverables

For each campaign, Agency will provide the following deliverables. All deliverables will
either be presented in person whenever possible, or on occasion as time/needs dictate,
emailed or posted to the Agency large file transfer [LFT] site.

Deliverable Description

Campaign Brief The Campaign Brief is the creative baseline

that the Agency will work from, and is
developed from the Client input brief. It
includes fonts, imagery, logos, personas,
taglines, brand strategy, brand positioning and
competitive detail. The Brief will be created
early in the campaign cycle and will be
updated throughout the campaign as
necessary.

Tactical Creative The Agencys recommended considerations

Brief for the campaigns creative development.
Includes:

Single minded message

Desired user response

Key message/offer

Campaign objectives and metrics

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Deliverable Description

Target audience

Media scheduling

Creative Units Agency will provide:

Conception and development

Copywriting

Mechanicals, storyboards, scripts, etc.

Edits of TV spots

Media Brief Agencys recommended considerations for

campaign media development. Includes:

Media budget

Prioritized metrics

Flighting

Messaging parameters

Target audience

Media Plan Each media plan will include:

Review of media parameters

Strategic direction

Recommended media vehicles with

associated details including
R&Fs/impressions, flights placements,
creative units, rates and cost, and deal terms
including make goods, cancellations, etc.

Rationale for each vehicle

Plan overview including category-based

budget allocations, overall flighting and
flowchart

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Deliverable Description

Media authorization for approved plan

Key Metrics Established with Client and ensures that all

metrics are known and measured. It includes:

Review of industry data, including that

supplied by CHI

Use of Simmons and other data to update

Grounded Voyager/Strivers mindset
documents, and CHI Brand Essence materials

Implementation of learnings from focus

groups for broadcast concept testing

Implementation of learnings from DR and

Millward Brown as well as competitive data

Goal delivery of media plan, e.g., total plan

impressions, GV total impressions,

Goal delivery of brand awareness growth, key

DR measures that includes brand linkage, etc.

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V. Client Services

The client services team remains the primary communications point for Client. For the
duration of the Contract Year, the Agency will provide a client services team consisting of
the following roles:

A. TBD, once Statement of Work is approved

B. The client services team is responsible for coordinating the work effort and flow and
for ensuring that Client needs are met. Specifically, they will:

1. Develop and manage campaign strategy

2. Conduct quarterly scope reviews to ensure Agencys efforts and resources are
covered by the scope and budget described in this agreement

3. Manage status calls and monthly meetings to review performance and project
update

4. Write and deliver all conference reports in an accurate and timely manner (48
hours)

5. Participate in relevant account meetings and review

6. Analyze Clients key competitors including strategy, media spend and creative

7. Coordinate with other Client agencies to facilitate integrated effort

8. Review and approve creative deliverables prior to sending to Client for final
approval

9. Respond to Client requests and work with internal teams to provide guidance
and support per Client requests and questions

10. Develop and manage project timelines and launch schedules for online
marketing campaign

11. Provide quarterly competitive spend and trend analyses

12. Manage all billing and invoicing issues, including providing monthly billing
book and accrual reports

Deliverable Description

Key Competitor Conduct one complete review and

VI. Financial
Analysis analysis of key competitors in
Summary
collaboration with Agency, and present
report to Client. Focus on competitive
marketing activity, including reported
media spend and creative examples.
Quarterly updates to follow, without
formal presentation.
 The following budget was prepared based on the Scope of Services and the Definition of
Deliverables, Timeline and key Assumptions and Dependencies. Agency will monitor the
budget and provide Client with financial reconciliations on a quarterly basis. In
accordance with the actual work performed, Agency may reallocate or add certain
resources across the project and/or teams as needed based on the actual needs but only
with the express written permission of Client. Agency will not exceed the total stated fees
without written permission from Client.

Direct Expense $

Overhead $

Profit $

Total Agency Annual Retainer $

Monthly Agency Retainer $

VII. Agency Production Rate Card

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