Opinion

Agencies must stop working for free in order to get that ‘much-needed account win’

The growing disintermediation of the industry coupled with tighter marketing budgets since the global financial crisis has resulted in a growing desperation to win the business, writes Landor's Nick Foley.

In recent years, the expectations from clients at a pitch have been on the rise. While it’s easy to attribute blame to over-zealous clients, there is also truth to the notion that many agencies have been willing to give away more when pitching, in the forlorn hope of securing that ‘much-needed account win’.

Part of the problem with the drop in pitch standards is due to those on the agency side not knowing how to manage client requests throughout the process. The growing disintermediation of the industry, coupled with tighter marketing budgets since the global financial crisis, has resulted in a growing desperation to win the business.

When a number of agencies all start to adopt this behaviour, it creates expectations among clients as to what can be achieved during the pitch.

A pitch is typically about four things. From the outset, chemistry is king. The chances are that once the pitch is over the agency and the client will be working together for a long time into the future, so the relationship between the two parties is paramount. The second factor is capability.

How well equipped is the pitching agency to manage the client’s needs? Following this, relevant experience is something that should be duly considered. Finally, consideration must be given to the ability of the preferred agency to create engaging, distinctive and credible ideas for the client’s target audience.

Quite often, an ‘idea’ will be requested in the pitch. Caution should be taken at this phase and agreements put in place that ‘any ideas’ shared are the IP of the respective agency.  Agencies would also be well advised not to go too deep with the elaboration of their ideas. After all, no decision on the preferred agency has yet been made and suitable immersion is unlikely to have transpired.

One of the challenges with the advertising and media industry is that there are too many players within it. Much of this can be attributed to entry and exit barriers being comparatively low. As a result, some agencies will seek to distinguish themselves by giving away more in the pitch phase thereby discounting their offer. This is simply a slippery slope that creates problems with optimised fee structures further down the track.

Quite simply, agencies need to get better at saying ‘no’ during the pitch phase. In other words, a difficult no is better than an easy yes. It’s fine during a pitch to distinguish yourself by speed of response, clarity of thinking, fresh perspectives or an amazing team. However, giving away ideas will ultimately lead to an industry that is less resourced to provide the big ideas necessary to help their clients brand’s stand out in the future.

There can be little doubt that the requirements of some clients in a pitch have regressed over the last decade. One can look to various industry associations for salvation, or they can adopt an independent approach to determining a more level playing field, thereby creating their own destiny

From the outset of determining your involvement in a pitch it is useful to remember it is an invitation. A diplomatic decline is entirely reasonable. Do your homework and establish whether a long term partnership is probable. Qualify what is expected and whether that aligns with the agency you work for.

Furthermore, understand, in forensic detail, what the scope of the pitch is. Does the company running the pitch want an objective perspective, fresh ideas or fully worked up concepts? Providing ‘free-work’ is typically a race to the bottom and is more often than not a harbinger of the level of equality – or lack thereof – in the relationship should things progress in your favour.

Sometimes it helps to understand how many other agencies are pitching. Three perhaps, four tops seems reasonable. Any more than this implies a client that is either indecisive or looking to generate a pool of free ideas from the pitch process. In my experience large pitches, with many competing agencies, rapidly descend to being multiple agency shootouts where ‘free work’ becomes the lowest common denominator.

It is also worth remembering that for many marketers, their experience in running pitches is low. This is typically something that may be hidden for fear of seeming inexperienced. Given the lack of familiarity with running pitches, an agency involved in the process may be perceived favourably by educating the client as to what is normal and what is unreasonable.

So where now? It is unlikely that any industry association is going to correct some of the poor practices that some marketers have driven in recent years. Whilst the actions of some associations should be applauded, the onus is on agencies themselves to determine what level of intellectual property should be provided in a pitch.

Agencies that foster a genuine sense of partnership with clients from the outset are the closest to achieving the appropriate balance. Likewise, leaders of agencies that encourage their teams to properly set pitch parameters as well empower their teams to say “no” are the ones that are most likely to rise above the current din of unbalanced pitches.

Nick Foley is president of South East Asia Pacific and Japan at WPP brand consultancy firm Landor.

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