Advertising agencies are re-thinking how to attract clients.
The well rehearsed pitch, when an advertising agency rolls out its top people to impress a prospective client, is as much a part of the industry as the four-hour celebratory lunch. But pitching can also be a pointless and expensive waste of time. Is there any more efficient way for an agency to sell its services and a company to buy advertising?
Agencies, on average, spend about 2% of gross income on new business development and presentation. They also complain that clients, being unsure about what they want their advertising to achieve, too often render the process meaningless, and that too many pitches degenerate into beauty parades. Certain clients evidently agree. Recently the client body, the Incorporated Society of British Advertisers (ISBA), issued a joint guide to pitching with the Institute of Practitioners in Advertising (IPA), which represents the agencies. The document urges agencies to blow the whistle on 'rogue' clients who initiate unnecessary and wasteful pitches.
This pitching charter calls for shortlists to be limited to three agencies and for clients to make a contribution to pitching costs. Further, clients are urged to think, before inviting agencies to pitch, about whether they need a full-scale creative contest - which means actually creating ads. A set of strategic business proposals might be all that's needed.
Some high-spending clients are not happy about this suggestion, though.
Roger Hymas, managing director of BUPA, had a five-year gap in his dealings with agencies between leaving American Express in 1987 and joining BUPA in 1992. 'What I found as I came back to the advertising scene was that, for some reason, the top 10 agencies had become very corporate and commoditised ... How can you distinguish the work of, for example, Saatchi and Saatchi from J Walter Thompson?
You have to look at their creative solutions for your business ... I can't think of any better way to do this than the old-fashioned, formal pitch.'
'We'll believe it when we see it' is the universal agency reaction to the proposed guidelines. Yet ISBA director general John Hooper persists in his mission. Among his prime targets are companies which invite up to 10 agencies to pitch for their business. 'It's an unbelievably crass waste of time for both sides, and indicative of an intellectually lazy client,' comments Hooper.
However it seems that more business is already being placed without competitive pitching. In May, Mars awarded M&C Saatchi, Maurice Saatchi's breakaway agency, its prestigious Pedigree Petfoods business. There was no pitch, the appointment developed out of an existing relationship. 'Clients want to work with people who have proven themselves,' says David Kershaw, a partner at M&C Saatchi. 'Why go through all the theatre, risk and cost of a pitch when you know that someone is good? The best way to hire an agency is to use someone you know.'
There is also statistical evidence that pitching is on the decrease.
The trend is clearly driven by business rationalisation - global, regional and national. When Colgate-Palmolive, say, makes its products in just a few manufacturing centres, why should it need pitches in order to find ad agencies in every market when one or two 'global' agencies will do?