Credentials v glamour in pitch polemic

IRENE CHAPPLE reports on the debate over the creative pitch, a money-gobbling practice some agencies would like to see scrapped.

In slimmed-down Adland, expensive, giddy lunches with clients are no longer the norm. But a purely creative pitch can still set an agency back around $30,000 to $80,000.

Although some clients argue that a creative pitch is simply the way of the world, there is increasing support for its demise.

Many agencies want a credentials-based selection process - cheaper, quicker and probably achieving a better result.

The ideas from an unsuccessful creative pitch are generally never used, and the wasted money and time ticked off as an unavoidable business loss.

Because when a coveted client asks several agencies to compete in a pitch, chances are they will. Advertising is a competitive industry, and, as one commentator points out, when there's a sniff of a contest, they'll jump - feet first.

One agency will be awarded the account; the others face loss of control over their intellectual property, a risk to the agency's reputation and a waste of time and money.

For major accounts, the cost of a pitch can reach $100,000, with no guarantee of any financial return.

In some cases, clients compensate rejected agencies for costs incurred. That, say the agencies, shows their pitch has been taken seriously and the client acknowledges the effort.

There is debate too over whether the money thrown at creative pitches should be limited. For small or new agencies, an expensive creative pitch can suck up a large chunk of revenue, which it may struggle to recoup.

Highly regarded advertising duo Roy Meares and Jeremy Taine set up Meares Taine five years ago. Although Mr Taine agrees a financial pitch may cripple a new agency, such problems did not affect Meares Taine. Its policy of direct client contact with the two principals meant any lost revenue was simply their time and brainpower.

"For bigger agencies with salaried staff," he says, "working around the clock, with whatever other bells and whistles, all comes at a cost."

He says the creative pitch is, by definition, flawed.

"The totally wrong agency may get the right idea on the day," he argues, "then it may all turn pear-shaped."

Ideally, a credentials-based pitch should be the norm, he says, because great work comes out of great relationships.

David Walden, managing director at Whybin TBWA, is similarly dismissive of the creative pitch process. It is, he scoffs, simply a beauty parade. And, like the beauty contest, it is falling out of fashion as clients realise talent is more than just skin-deep.

Mr Walden says clients are looking increasingly to a credentials-based pitch, choosing an agency on its reputation, past work and what services it offers.

The debate runs to large-scale agencies such as Saatchi & Saatchi. Its Auckland office creative director, Andrew Tinning, is a believer in the team spirit and high-pressure experience a creative pitch can foster, but managing director Ian Christie says agencies are too keen to give away product for too little.

Mr Christie estimates 10 per cent of clients will offer compensation on an unsuccessful pitch, and that will usually be less than 20 per cent of the agency's outlay. Mr Christie pushes for a third party - a quasi industry body, much like a recruitment agent - to liaise between agency and client, ensuring the relationship's longevity. He says such a service is used in Australia, and paid for by the client. The third party can ask questions of the client that an agency under pressure to win business may be too scared to ask.

Colenso BBDO head Neil Livingstone supports the "adrenaline buzz" a pitch can cultivate, but would prefer to see clients asking for branding and strategic ideas, with a small creative assignment attached.

Those wanting a traditional creative-only pitch are increasingly offering recompense for failed pitches, he says. Usually, it's a fixed amount written into the original brief, and will cover up to 20 per cent of the cost. But ideally, he suggests, agencies should get the majority of their pitch costs back.

Colenso BBDO was involved in last year's much-condemned Air New Zealand/Ansett pitch. The agency won't talk about it, as it retained the account for Air New Zealand, but it is understood the airline issued a hypothetical pitch to competing agencies for the total Air New Zealand/Ansett business.

Agencies poured up to $100,000 of time, resources and cash into a pitch, but before the process was complete, Ansett had folded. "It was," mutters one commentator, "a debacle."

The Herald understands the airline paid $20,000 compensation to the unsuccessful agencies - something Air New Zealand spokesman Mark Champion refuses to confirm. "It's just not something we'd discuss," he says.

As for the various agencies' lost resources, "that's a reality", Mr Champion says. Even if the total account had been awarded, "we would only have pleased one [agency]".

Instead, the situation became an example of worst business practice, says Communications Agencies Association (Caanz) head Lynne Clifton.

She believes the creative pitch has no place in the advertising industry. "They're a copout for lazy CEOs and boards who haven't done their homework," she says. "It is very sound business practice to put time into the selection process [of a new agency], not just look at fluff and window-dressing. If you spend enough money on hairdressers and designer outfits, you'll look fantastic."

She believes agencies should be reimbursed for a pitch. "It's unbelievable we even contemplate giving away the most valuable asset," she argues. After all, ideas are key to a great advertising agency.

Ms Clifton compares the situation with being charged for drink-driving, then asking three different lawyers what their defence strategy will be before choosing one.

Caanz has drawn up guidelines for best-practice pitching, and intends to release it to the industry later this year after consultation with the Association of New Zealand Advertisers (Anza).

Ms Clifton says the guidelines recommend several steps before choosing an agency.

Firstly, Caanz suggests a "chemistry check" between client and agency to see whether ideas and personalities are compatible. Then, a strategic presentation, ideally from fewer than three agencies. A creative competition would then be used as a final assessment. Although the guidelines can only be self-regulatory, Ms Clifton hopes a harmonised effort from the industry will ensure they are followed.

Executive director of Anza Jeremy Irwin says the association already offers its members best-practice guidelines. Although he has sympathy for agencies' discomfort at the creative pitch process, he equates it to a tendering process. Mr Irwin suggests the choice to pitch - and spend money - ultimately lies with the agency.

Indeed, GeneratorBates' chief executive, Andrew Stone, is flabbergasted at the fuss.

"I don't understand why agencies gripe about it so much," he says. "It's a free world - I don't think you can try and govern those things."

Anyway, he adds, "Clients can do what they want."