Analysis: 1 pitch, many agencies: Marketers, we have a problem

Times are tough. And in the current economy, it comes as no surprise that a single pitch can draw in a huge number of agencies. Most recently, we saw the Civil Aviation Authority of Singapore luring in 38 agencies for its social duties. Meanwhile The People’s Association's social pitch saw 18 competing agencies and NEA's social media pitch that was awarded to Metia Group, initially had 21 other agencies vying for the business.Clearly, agencies now are hungry for new business.

Nonetheless, entering a pitching process requires any agency to put in time, manpower and significant investment to stand a chance in securing the job. And through simple math, it is obvious the higher the number of players enter the game, the lesser the chances of any one agency winning. To keep the problem in check, the  Association of Accredited Advertising Agents (4As) in Malaysia for example, introduced a mandatory pitch fee in 2006 to streamline the pitch process. Five years ago, when Malaysia Airlines had 15 agencies vying for its pitch, the 4As issued a letter and reminded the airline to pay agencies that did not win the pitch a compensation.

While the 4As in Malaysia is active in implementing pitch fees in such highly competitive situations, currently there are no implemented measures in place by 4As Singapore. But this doesn't mean Singapore-based clients are oblivious to the efforts put in by agencies. Several years ago, the CPF board in Singapore and Nation Arts Council implemented their own pitch fee process when looking for agency partners

Speaking to Marketing on the current situation, Bernard Chan, CEO of 4As, said it has always urged agencies to put on their businessman's cap and think hard before diving into the fray and pitch for competitive businesses. "When you have a situation where a pitch has drawn 38 agencies, then agency owners and heads must consider whether this type of participation is sustainable, or stubbornly foolhardy, if they want to stay in the business. At the end of the day it must be a business decision to participate," he added. As such, the 4As Singapore does advice agencies to consider carefully the terms and conditions of getting themselves into such competitive positions.

When asked how the 4A's is stepping up for agencies in such heated situations, Chan explained that 4As is currently in active discussions with the Advertisers’ Association (SAA) and the government to crystalise a mutually pre-qualification system and selection system that will be mutually beneficial to both client and agencies, and certainly less onerous to contenders as part of its push for best practices. "We will keep going in this direction until we get to a system that does not unnecessarily weaken and perhaps destroy the very practitioners that could potentially help advertisers attain their objectives," Chan added.

Adding on to the conversation, Chris Riley, group chairman, Ogilvy Singapore and Malaysia, said while pitching is the lifeblood for every good agency and agencies need it to keep “pitch fit”, understanding when to say no is as important as when to say yes. For any agencies throwing their hat into the ring, a speculative investment of its own money and resources are undertaken. This is why when deciding to pitch for a project, Ogilvy carefully evaluates the opportunity and uses various internal criteria to determine whether to proceed with that investment or not.

"The first item on the agenda is to determine if a pitch is even needed," Riley said, adding:

In reality far too many, too small projects are pitched to too many participating agencies.

The rule of thumb for Ogilvy is to evaluate the brief, weigh out the requests or ambition, evaluate the agency's own skills and experience fit, keep in mind the potential size and duration of the engagement, and understand the context of the business, brand and client/prospect relationship. Riley added: Every time a pitch does not convert into a win, it is time and cost that is unrecoverable or “sunk”. Hence every pitch decision counts, especially for an industry such as advertising where talent is a key cost, and margins are already thin.

Nicholas Ye, founder of TSLA added that as an agency, it always evaluates the “potential to do something that moves culture”. Typically that requires a certain calibre of client and commitment to spend. 

He added that the best RFP’s for agencies are the ones which make clear to the agency specifically what a client is looking for. This could be quite easily a slide or section in a deck entitled “what we’re looking for” followed by “what we don’t want”. “This is less about an evaluation criteria which is hygiene, and more about values, and ways of working that a client would appreciate and derive value from. This is especially important when face to face meetings are less possible these days,” he added.

In an earlier interview with Marketing, Prantik Mazumdar, managing partner at Happy Marketer also also cautioned agencies not to go into a highly competitive pitch ready to play the low-cost card with the hope that eventually they will make money. “That hardly ever happens,” he said.

Highlighting the importance of good client-agency fit, Mazumdar added that while it might be "tantalising and ego-boosting" to see many agencies pitching for the business, it is important for clients to consider factors such as chemistry and trust quotient with the agencies, company credentials, and alignment on business goals and KPIs to set and manage expectations.

Intensity doesn’t equate to quality

Both clients and agencies can play a part in ensuring the pitch process is more streamlined and efficient. According to global pitch consultant Shufen Goh, founder of R3, clients should spend more time aligning on their pitch objectives, their own requirements, and their own ambition before they reach out to agencies. “Too often, senior stakeholders don't align internally to the pitch process and expectations, resulting in midway change in direction,” she explained.

According to Goh, when vague RFP can traditionally draw in a myriad of agencies from all walks of life, and it s often a clear signal that the client hasn’t yet put much thought into the process. This could also mean that the client does not have as much respect and appreciation for the hard work agencies have to put into a pitch process. She added that a good brief should be clear and specific, and the pitch process should be well-designed and well-communicated to agencies. Clients need to ask for evidence of capabilities and cultural fit in agencies’ and track record before putting agencies on a shortlist. Additionally, clients should define conflicts clearly, and be decisive about the “must haves” and the “nice to haves” in their RFPs.

While having a pitch that draws in many agencies may seem positive because competition almost always drives up value and that mean clients could see more quality pitches, Goh warns that the opposite could happen as well.  

With a higher amount of competition, agencies might provide poor quality submissions because they do not want to invest too much effort vying for the account.

What are clients really looking for?

When it comes to a pitch that sees many agencies vying for the business, a client-agency fit is an important factor. According to Leela Nair, managing director SEA, Ebiquity, clients are usually not seeking ideas by agencies at the early stages of pitching. Instead, the client is more interested in the quality of the agency and its staff.  “Understanding the capability of the agency, if there’s chemistry, or ensuring the agency does not have a large account with your competitors are more important than ideas at the early stage,” she said.

Nair added that clients can also consider implementing a Request for Information (RFI) stage which focuses on securing just the information required for shortlisting agencies to participate in the RFP stage, Nair said. With clear selection criteria, this ensures only the agencies that meet that client’s criteria are shortlisted for the next stage. The focus needs to be on having a customised agency selection process for each advertiser rather than defaulting to a decision based on size or a subjective criteria. 

Ultimately, it boils down to clarity of the client’s brief. “A clear, well-thought through brief sets the tone for the pitch and signals to pitching agencies that the client in return expects a well-rationalised and high calibre response,” she said, adding that

Agencies will almost always respond appropriately if the strategic brief in the RFP is well thought through.

Giving a word of advice to the agencies, R3’s Goh said agencies should ensure they are pitching for the right accounts by investing the time to interrogate the client fit upfront and deciding if they can go all out to win. Since pitching is a time and resource intensive process, being more selective can impact an agency’s overall success rate. While it is tempting dive in for every opportunity to pitch, it is often not profitable when the client is short-term and a wrong fit for the agency.

“Agencies should ask themselves hard questions about the client they are planning to pitch for. These include if there is a good client-agency fit, if it is a short-term or long-term engagement, and if the client has been professional or transactional in the initial engagement,” Goh added.

Chan from 4As added, at the end of it, the old adage "it takes two hands to clap" sticks. While agencies have to be selective and decide if the account is worth vying for, clients also have a major responsibility in this situation.

“Clients should communicate to potentially participating agencies about the number of agencies pitching and have responded to the tender. This responsible practice will see a healthier industry in the long run,” Chan said.

Related Articles:
Analysis: Why it is time to ditch the itch to pitch
SG agency heads on how agencies and marketers can create better working relationships
It's a 2-way street: MY agency heads on improving client-agency ties