We’ve taken a stand by refusing to engage in traditional pitches.
And we’re not alone.
At the top end of the market, pitching can cost an average of
$300,000 and take a year for an
agency to break even. At our end of the market, the costs are much lower, but still
substantial at $20,000 to $30,000. This business model is out-dated and unsustainable
– it may have worked in the Mad Men era when competition was low, but it’s
certainly not fit for purpose today. In fact, in the last 5 years, the number
of hours pitching has actually gone up by 225% rather than down.
So, how can it stop?
It stops with agencies around the world ditching the pitch.
The pitch
Companies request pitches so they can choose the most suitable
agency from a number of candidates. A pitch usually involves multiple team
members presenting to the client multiple times in an attempt to prove they can
meet (and exceed) the client’s campaign and/or branding requirements.
Recently, Initiative CEO Mat Baxter
called out a client for making their 120-day payment terms a mandatory requirement to
participate in a pitch. Anyone who did not sign was immediately cast aside,
unworthy of even showing up.
Companies taking advantage of agencies before they’ve even begun
working together is just one reason the ditch the pitch movement is necessary.
Traditionally, after an initial meeting, a short list of agencies
are selected to come up with fully developed creative ideas, often taking weeks
of preparation, all for only one of them to be given the “golden ticket”. The
rest are left with a gaping hole in their budgets with no project to fill it. Since
pitches are usually ultra-specific to each client, being pitched, all the work
undertaken cannot be reused for another account. It’s an all-or-nothing
proposition. All the hard work is, essentially thrown away, costing the agency thousands
of dollars every time they don’t secure the account.
The costs however are not just borne by the losing agency – those
costs are necessarily transferred to accounts that are won, as ‘overhead’ costs
associated with marketing and promotion. For example, if 3 pitches are made at
a cost of $30,000 each and two out of three are lost, the one winning account
is consequently ‘burdened’ with the full $90,000 cost that the agency needs to
make up for as part of its ‘sales and marketing costs’.
This is a lose-lose self-defeating cycle that has to stop.
The #DitchThePitch
Movement
Ditching the Pitch was coined by Steve Yastrow, founder of Yastrow
& Company, a successful business strategy consulting firm. His advice is to
fight the traditional pitching process by improving persuasive conversations to
achieve success.
Nobody wants to work for free – and working for free rarely
delivers work of a high standard. On top of this, independent agencies simply
cannot compete against the giants who naturally have a larger budget put aside
for pitching. In this cycle, competent independent agencies who are fully
capable of delivering a project or campaign are never even in the running.
Not surprisingly, 82% of agencies advocate the #DitchThePitch
movement – with both big and small agencies now ditching the pitch. Charlie
Carpenter, MD of CreativeBrief, says “The fact that two-thirds of brand CMOs confirmed they would
still work with agencies who refused to engage in the traditional pitch is an
illuminating finding and one that surely must finally give the industry
permission for genuine reform,” but also argued that “very little is really
changing”, potentially for fear of losing out with huge brands that are
sticking with pitches.
So how can
ditching the pitch benefit both sides?
Only 44% of brands/agencies
surveyed (which include big names like Ogilvy, Mr. President, IKEA and
Unilever) believe the traditional pitch process reveals a “true sense” of what
working with an agency will be like. This figure drops to just 21% for the
bigger agencies.
Typically, a pitch will involve the well dressed, client-facing C-Suite
managers and not the will generate
growth.
Instead of the traditional client-agency mindset, where agencies
pitch against one another to fight for the winning spot, and then re-pitch to that
client to retain the working relationship over the months and years, the #DitchThePitch
movement aims to see the relationship re-established as a partnership, with
both sides working toward a common goal over a longer period of time.
“To truly
succeed, we need to work as one team – and our agency partners are a core part
of that team” – Patrick Judd, Land Rover
Global Marketing & Communications Director.
A recent study reveals 67% of brands respond
positively to agencies refusing to engage in a traditional pitch. This is good
news for the 93% of agencies who want to see changes in the pitching process.
“Ultimate
Edge Communications has been a pioneer, no longer pitching for work or the
acquisition of an account.” Exclaims Aleisha McCall, Founder and CEO. “We have
to be the change we want to create.”
“Whenever a
client needs confirmation that we are in sync with their creative ideas, branding
or positioning, we provide them all the comfort they need with a paid statement
of work that includes all the details of a traditional pitch” adds McCall.
“Thus far, we
have had 100% success with this approach and only in a small percentage of
cases do we need to make adjustments to the original recommendations, which are
catered for in the deployment stage of the campaign” explains McCall. “Our intimate,
collaborative approach requires us to involve all stakeholders in the process as
we iteratively bring a campaign to life.”