The Big Pitch

September 1st, 2003 Design Features, DG, Tech

Sloane Curtis — one of the biggest ad agencies in New York City — pitches for free. Honestly! You can see it for yourself.

Go down to your video shop and hire 2001’s romantic comedy What Women Want. The fictitious agency depicted in the film (with Alan Alda as the CEO) pits creative directors Mel Gibson and Helen Hunt against each other in a Nike pitch.

Finding synchronicity (because Mel can magically hear women’s thoughts around him), they produce a fantastic TVC pitch together, whereupon he overhears the female executives scrambling over themselves to sign with the agency.

Or was Nike so keen because Sloan Curtis put all that work in and didn’t charge them? Is free pitching as prevalent (and as hot an issue) in Hollywood movies as it is in the real world of advertising?

You’ll rarely hear anyone in advertising or communications (or any field at all for that matter) talk about how easy it is to get clients and how they can afford to throw a bit of money away on a dodgy business practice now and then.

But whether we’re in times of recession (or just belt-tightening) or not, changes in the business itself, not just the technology, mean advertising will continue to fall under assault by plenty of variables in future.

Together with the fact that the Australian industry is nothing like (the real or fictionalised) Madison Avenue, it’s no wonder the debate about free pitching is so contentious.

Ask most people in the field, and the answer will be nearly unanimous; free pitching is bad. Ask why, and the answer will be roughly the same from whomever you ask; it devalues our industry.

While the notion of devaluing our industry sounds a little vague, the practical applications of it are plain enough for your accountant to understand.

Plenty of clients would love the free pitch to become standard, but as AGDA National President David Terrazas believes, it’s bad for us and it’s bad for our clients — even if they don’t realise.

"In this highly competitive environment," he says, "a client can ask for ideas for a campaign and receive 20 of them for nothing. Of course they think that’s great, but in reality, if they don’t pay for them, it’s easy for the client to undervalue their true worth."

The mechanics of the free pitch is what Terrazas calls a ‘numbers game’. Because of simple economics, pitching for free might not be worth it under any circumstances — particularly for many of us in small operations. "A lot of the time," Terrazas explains, "the cost of putting together a quality pitch is the same as the profit you’ll get on the job if you get it."

Shaun Branagan, creative director of Young & Rubicam Sydney, agrees and goes further, asking the question; if it isn’t about our ideas, what else are we selling? "Go to a lawyer and you’ll get scant free advice," he says, "Why should we give away our most valuable assets — our ideas — for nothing?

There’s one in Every Crowd

Of course, we’ll never reach a state of perfect equilibrium. Despite the wishes of bodies like AGDA, whose interests lie in the prosperity of their members (many of them in advertising), and agencies themselves, who’d love to be able to charge for every hour they work or proof they produce, there’ll always be someone willing to pitch for free.

But why, when it ‘devalues the industry’? Isn’t outdoing your competitors with lower prices or better service the basis of all commerce? Most of us aren’t in business for a sense of advertising industry camaraderie, collaborating to shape the cultural landscape — we’re doing it to make a living, keep our clients happy, and make more clients so we can grow.

Unfortunately, many of us make choices based solely on price, from the household groceries up to multi-million dollar multinational advertising accounts. And when we do, we often learn that you get what you pay for.

AGDA’s Terrazas paraphrases a famous quote from a US technology guru; "It could be summed up by a commentator who was actually talking about IT convergence. He said client expectations are for everything to get ‘Faster, better, cheaper’. We can easily see the same expectations are occurring in our own client communities. Yet to produce high quality creative work it seems that some of those three qualities can be are mutually exclusive."

And according to Y&R’s Branagan, the client will end up paying for it in the long run anyway. Even agencies that successfully pitch for free have to make up for the loss of billable hours or production costs. "Agencies who pitch for free are just more desperate and they’ll probably spend the rest of the year trying to recover their pitch costs." He thinks.

The Advertising Plague?

Constantly fighting against market pressure to give away our intellectual property in a once-only process designed to arbitrarily prove ourselves, the question must be asked; is anyone else expected (or asked) to do it? If you try a new butcher, you wouldn’t expect free sausages so you could decide whether to go back there. If your sink gets blocked up, see what happens when you ask the plumber if you can consider his first callout a free trial to see if you’re satisfied with his work (especially on a weekend)?

Is it any different for small agencies, for example, than in the big end of town where the pitch and shortlist method was born?

Steve Horton is an expatriate London designer who now runs his own agency — Scout Creative — in Perth. Even in a small operation, he’s trying to sell a reputation of quality and not just wave inducements like the word ‘free’ under clients’ noses — inducements he knows he can’t afford.

"The qualities [my business] stands for — good quality design, creative solutions, customer service and experience — can be shown to a potential client by a credentials pitch," Horton believes. "They meet us, we show them our portfolio and talk over both our histories and what we can do for them."

And what’s it’s like in other creative sectors? In public relations, for instance, where they don’t get to mark up print production costs or radio speakers’ fees, all they have is their contacts and ideas — neither of which are very tangible or clearly defined.

Jim Ward, of Ward Holt, takes the stand most in advertising would like to take. But then, he doesn’t find himself under the same pressure to prove himself to clients against competitors.

"It’s a question of whether you want to give away your best ideas for free," he says. "We don’t charge to pitch, but we don’t really do creative pitches. We submit a capabilities profile and — if appropriate — give contact details of present or past clients who can be contacted as referees. We seldom find ourselves in a competitive situation anyway, since most business comes by referral."

And as PR freelancer Rebecca Lemay points out, in PR they tend to go with your work because they’ve heard good things about you rather than the flash-in-the-pan brilliance of a pitching process.

"In order to win a new client, I mainly rely on the strength of my current and past clients," she says. " The forthcoming communications plan has to fit their objectives, showing that you fully understand their vision. And of course, demonstrating that you possess good communication skills is a must to win them over."

In web development, it’s pretty inexpensive (if not free) to code some HTML, do a few logos in Photoshop and upload everything. Surely there’s nothing wrong with pitching for free if you aren’t slugged with any production costs?

As it turns out, the most costly expense -just like in advertising — is time. Miles Burke is a web developer with experience in projects from SME to national-level clients, and he’s only too aware of what he’d be losing by pitching for nothing.

"Production in the web industry is a matter of hours being spent, just like in traditional advertising," he says. "I don’t charge to spend a few hours discussing a client’s requirements and coming back to them with a proposal, but I do charge for anything beyond that, which is what I consider the intellectual property the client pays for."

The Solution

We know agencies are feeling the pinch of a myriad of costs that squeeze their margins further (including being asked to pitch for free or not recouping the full costs of a pitch). We can also presume that clients would love to pick and choose the best work without having to pay a cent (no organisation from the client side of debate agreed to be interviewed — mostly for reasons of commercial confidentiality — which speaks volumes in itself).

It looks like an ongoing struggle with no end in sight, but some in the industry see light at the of the tunnel. The very idea of an agency as a supplier that pitches for work alongside its competitors is changing. And if it isn’t, according to veteran creative, photographer and writer Karl-Peter Gottschalk, it should be.

After working with some of the biggest names in Europe including Saatchi & Saatchi and AMX Digital (now part of Euro RSCG), John Bevins Sydney and Black+White magazine, Gottschalk is now a fervent advocate of overhauling the agency model, including that which necessitates the pitching process.

"The agency model may have worked reasonably well in the past," he says, "but the devolution of traditional agency structures, the unbundling of media buying and planning and our clients’ newfound ability to take on roles once seen as core agency activities mean we can go one of two ways.

"An agency can retract to become a supplier, or it can expand to become a partner to its clients. Being a supplier is short-term and short sighted, responding to immediate needs in a tactical manner. Partnership is long-term and means building a relationship over time for strategic, long term solutions."

Although it sounds like the lip service most ad agencies pay to client relationships, some in the industry believe we’re on the way. To some, it’s simply a case of the old methods like competitive pitching (that’s been in use for fifty years) dying out with the evolution of the industry and the morphing of traditional revenue sources.

Conclusion

So the question might not be ‘is free pitching good or bad’, but simply ‘is pitching (in the traditional sense) worth it’?

The vast majority of business decisions happen because someone knows someone. It’s much easier to call the bloke who did it last time (knowing he did an adequate job) than spend the time inviting and sifting through ten other proposals or quotes.

So for an agency to even find itself in a situation where it’s actively competing against other agencies for a client’s business is getting rarer. And even if it does, as Karl-Peter Gottschalk believes, a single ‘hit’ of creative brilliance isn’t nearly enough. "From the client’s perspective, a single pitch isn’t nearly enough to go on," he says, "we need to move away from the pitching model."

Y&R’s Shaun Branagan agrees. "A credentials only process is less onerous and time-consuming," he says, "plus it’s rare the agency that wins a pitch gets to run the creative work they presented for it."

So free pitching — or pitching at all — might be money and time spent that you won’t be able to recoup. And given that hidden costs could easily wipe out the profits from the job in the future, it seems the new and emerging paradigm is the way to go — get into your clients business, learn what they’re about, make yourself a partner in their goals and you’ll be in the best position to help them sell themselves.

Funnily enough, that’s what we were supposed to be doing all along…


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