FRI Phones Inc. always used the services of ad agency West, Smith, & Wiley to create advertising campaigns for its products. When a major competitor outsourced its promotional campaign to West, Smith, & Wiley, FRI Phones revoked its contract with the ad agency. Which of the following is most likely the reason for FRI Phones Inc.'s decision?
A. The Federal Trade Commission (FTC) prohibits two competing companies from using the services of the same ad agency.
B. When an agency works for two competing clients, the quality of work is believed to decrease due to lack of personal attention.
C. When customers realize that two competing companies use the services of the same ad agency, they will fail to differentiate the companies' products.
D. Ad agencies are permitted to handle only one account at any given time.
E. Ad agencies often have access to their client's confidential information, increasing the chances of sharing such information with competitors.
Answer: E
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