The pitching process is broken and is now in need of a long overdue and major overhaul, writes Charley Stoney, CEO of IAPI.
I thought long and hard about writing this article as pitching is such a sensitive topic to address. However, I am compelled to point out to marketers and business leaders, the impact that the current pitching culture has on such a small market and what it means for the Irish marketing and advertising community in general.
The numbers speak for themselves. 36,000 days or 7,200 working weeks of IAPI agency staff time was spent on pitches in 2022, at a total cost to the industry of €7m, including 3rd party costs. (2022 IAPI Census). This amount of time is the equivalent of 150 fulltime employees.
The Pressures
Given that IAPI members employ approximately 2,300 people, this represents 6% of agency staff continuously working on pitches. In a professional service, where fees relate to the talent deployed, this wipes out a considerable amount of time that would otherwise be charged for.
At this present moment in time, six of the country’s top 30 advertisers have already put their creative advertising accounts out for a full pitch process, or are about to. In reality, due to reasons of scale and conflicts of interest, this falls to a maximum of 10 agencies who are eligible to take part in the process, with each of these agencies taking part in a least 3 of the pitches. Earlier this year, at least 5 out of the biggest media spending brands put their business out to pitch which resulted in similar pressure on the few media agencies in Ireland.
In larger markets, such as the UK or the US, there are fulltime dedicated pitch teams within agencies. In much smaller markets such as Ireland, this is not possible so it falls to the agencies to field their brightest and best in pitches while still maintaining service levels for their existing clients. Even the largest creative agencies in Ireland are SMEs, and their margins fall between 8-10% (2022 IAPI Census) so employing freelancers on an ongoing basis for pitching further erodes their profitability.
The real cost here is a human one. In the latest IAPI Sentiment Survey, a third of all respondents stated that they are always stressed at work. In a recent article in Campaign the findings from a MediaSense series of interviews with directors and C-suite ad professionals across the globe painted a stark picture of the impact of pitching on the industry’s mental health. “The pitch process is both excessively time- and cost-exhaustive for the vast majority (86%) of agencies, while nearly two-thirds (64%) found it damaging to agency culture and more than half (54%) said it affects staff mental health, according to research.”
The Need for Change
By anyone’s standards, this is unsustainable and needs to change. The current frenzy is possibly a result of a back log from large brands not pitching during the pandemic, but it is worth senior marketers taking note of the current activity in the market before going to pitch to avoid putting unnecessary pressure on the few large agencies within Ireland.
The IAPI Creative Pitch Guidelines are based on traditional processes and allow for creativity and full strategy to be included in a pitch process, which I now believe is outdated. In 2020, we issued Agile Pitch Guidelines in 2020 to allow for smaller brands, with a budget of less than €300k to spend on creative fees, to run a more streamlined process.
I would urge those considering pitching out their creative account to look at this process and be guided by it, regardless of scale. At its’ core is a chemistry meeting and a half or full day workshop where the agency can showcase their strategic and creative thinking without having to spend weeks in advance creating a response to a brief that might never get read, let alone used.
I am glad to say that I know of several pitches for large and small brands that have been undertaken following the IAPI Agile Pitch guidelines and have been extremely successful so I hope this trend continues. I am aware that not everyone will be able to immediately switch to Agile Pitch mode, and that the industry will need time to move away from more traditional ways of appointing agencies, but it is great see at least one or two major brands lead the way and hopefully others will follow suit.
Reputation Counts
In my opinion, based both on my own experience when I worked in agency land, and from talking with CMOs over the course of the past few years, senior marketers predominantly select agencies on their reputation, their current work and most importantly, the people they connect with during meetings. Ireland is small enough for personal recommendations to be made very readily and informal meetings with the creative directors and strategic planners can also help to cement a relationship. If a full creative and strategic solution is so vital to see, why do so many creative and strategic proposals made in pitches never see the light of day?
Another question I have is why a three-year term is deemed the norm? If you think about creating and bedding down a strategic partnership with an agency, it is really only in year two and three that it becomes seamless, and the magic happens as it follows much the same timelines as a senior marketer taking on a new role. It simply takes that long to become immersed in the business when it comes to large organisations. Then just as you begin thinking as one, the account is up for tender and you have that awful six-month period of not knowing if you can plan for any future activity or not because you don’t know if you’ll still be working with each other. Perhaps the norm should be a five-year term with a break clause?
Broken Procurement Processes
I believe the biggest obstacle we have in Ireland, in changing the way our industry tenders for business, is that procurement departments in large organisations appear to be running the process when the industry pitch consultants or marketing departments themselves should be. The IAPI accredited pitch consultants are accredited because they sign up to our pitch guidelines. However, all too often they seem unable to move the dial when it comes to procurement.
Clearly, procurement need to be reassured that they’re getting value for money from their agency partners, and this can be built into the RFI questionnaire so they make comparisons at the outset. Most procurement experts I have worked with are reasonable when presented with facts and open to suggestions as to how to improve processes. I have seen CMOs present a successful case for running a more streamlined process, with a strong rationale, based on using up less of their own time and resources on a lengthy pitch process, let alone the cost to the agency. I believe pitch consultants need to push back more on clients that are simply asking too much of agencies already working to incredibly tight margins.
Positive Pitches
In May 2022, IPA and ISBA launched their Pitch Positive Pledge in the UK, hoping to address these issues of working out of hours and for free, a draining of agency resources and burnout, as well as preventing further wastage through what is probably the most unsustainable initiative within the industry. Over the course of this Summer, I will be discussing the introduction of a similar pledge, using the Agile Pitch Process as the baseline, with IAPI members, industry colleagues in the AAI, MII and IAB Ireland and the IAPI accredited pitch consultants.
I believe it is time for us to make a difference to the way we conduct this vital aspect of our business to make it fair and equitable for the agencies and also provide brand owners with all the relevant information they require to choose the right partner for their business. Ireland leads the way in many areas of business, so why not in this?
I welcome all comments on this subject and if you would like to join an industry-wide working group to establish what we believe responsible pitching should be for the Irish market and agree a shared standard to work to, please get in touch.
Charley Stoney is CEO of IAPI
