Ad agencies unite in bid to level the pitch

Advertisers do not give ad agencies the easiest of rides at the best of times. But a pitch can be handled so badly that it can lead to life-long grudges within the agency community against advertisers and their companies.

Agencies point the finger at the attitude of some advertisers, saying that they do not always appreciate the effort that agencies put in to secure an account. New business is an important part of an advertising agency’s existence: it allows agencies to extend their expertise into other fields, to replace lost business and to keep a fresh approach.

At least 20 top agencies have become so disgruntled with advertisers that they are banding together to draw up an unofficial blacklist of companies – and their marketing chiefs – that have behaved badly in the past and will be boycotted in the future.

Horror stories, they say, are commonplace. It is not unusual for advertisers to approach rival agencies about their business before telling their incumbent about a review. There are also numerous stories of clients imposing unrealistic timescales to give pitch presentations, then themselves taking months to deliberate and make a decision.

It is also common for advertisers to fail to tell agencies of any developments directly. “The Royal Mail shortlist was announced in the press,” says Wieden & Kennedy managing director Neil Christie. “A lot of agencies had spent a great deal of time and effort submitting tenders for that.”

Christie points to the expense agencies incur, even at the early stages of a review: “For a decent-sized pitch, an agency commissions research groups, then there are costs for travel, the studio and editing. Even the time used up managing the pitch means an agency is out of pocket.”

Agencies say some clients will not pay the going rates. TBWA/London managing director Jonathan Mildenhall says: “The problem with some companies is that they are shopping in places where they can’t afford to buy.”

Mildenhall adds that some advertisers gloss over the thorny issue of fees, and do not agree a price before they decide on their agency of choice. He cites an occasion when his agency worked on a pitch for a well-known food brand: having obtained prior assurances from the marketing director that he was happy with the fees, he then tried to beat down the price once the agency had been told it had won the business. Mildenhall says that in instances of this kind, his course of action is always to refuse to lower fees. The advertiser went elsewhere when he was confronted with this approach.

Advertisers should be aware that agencies talk to each other. One agency points to an advertiser in the North, which is reviewing. The company’s marketing director told each pitching agency that they were the most expensive and that each of the others was offering to handle his advertising at cheaper rates. However, a quick phone call between the agencies concerned clarified the situation.

New business directors admit that consulting other agencies is rather anti-competitive but, they claim that the activity, although rare, is sometimes necessary to establish what is really going on.

The Institute of Practitioners in Advertising’s new business group, headed by Christie, is putting together a pitch charter for clients and agencies in order to establish best practice. It will cover all aspects of pitching, including the number of agencies that should pitch, the timescale and the ownership of intellectual property.

“It is not unheard of for advertisers to ring up after a pitch saying they don’t want to work with the agency, but to ask if they can pinch some of their ideas,” says Christie.

Those advertisers unsure as to how to conduct a review sometimes use a new business consultant. There are four main players: the AAR, Agency Assessments International (AAI), Agency Insight and the Haystack Group. The AAR differs from the others in that it simply introduces suitable agencies to a pitch and then steps back. The other three all operate on a similar level: they assist the advertiser in determining whether they need to run a pitch, select agencies for the pitch, sit in on and offer advice during the pitch, and advise on the appointment.

Although agencies say consultants have their benefits, they are not exempt from criticism. TBWA’s Mildenhall says: “If there is a consultant involved, you know a piece of business is bona fide, but they can sometimes reduce the opportunity to build close relationships.”

Although in the recent Camelot pitch, his agency lost out to Abbott Mead Vickers.BBDO (MW last week), Mildenhall says that it had been an “exemplary case” of a well-handled pitch.

This pitch was led by the company’s commercial director Phil Smith, who has handled a number of pitches over a career that spans Kraft, Kwik Save and the Somerfield Group. He says that advertisers should prepare carefully for a pitch by devoting time and effort to agency briefings. “We gave our pitch high priority, so we chose our timescale carefully,” he adds.

Smith also says that agencies must be briefed at the same time and that advertisers must make themselves available to give guidance and feedback, which should involve unsuccessful agencies.