Heard about the GE Capital Life pitch? Just about everyone who is
up to speed with what's going on there is dismayed and disgruntled.
Actually, disgruntled doesn't begin to convey the depth of feeling here.
Some observers are very angry indeed.
But, as yet, this is a relatively small earthquake because, thanks to
Draconian confidentiality agreements imposed by the client, there aren't
that many people in the business who are in command of all the
But, from what can be gleaned from inside sources, the facts of the
matter are these: last year, the company began a pitch process on its
pounds 8 million media account in which a number of agencies were to
submit - and then develop - possible strategic communications plans. But
then, before the first formal pitch presentations, the company's
procurement office became involved and it devised a questionnaire that
quizzed the agencies' ability to meet certain price requirements.
Those still in the running were invited to base their pitch around their
response to this document. When it came down to it, some stood up and
said the document was stupid and demeaning - at which point,
surprisingly, they dropped off the pitchlist.
But the survivors (two, it is believed) had no call to be smug, because
the second pitch was to take the form of an auction (the winner being
the lowest bidder against a number of price criteria) conducted via an
At this point the procurement people became even more involved. They
liked this auction idea. In fact, they liked it so much that they
decreed that the whole pitch be opened up again to all-comers. Get a
password for the intranet and you too can be a player.
Log on each morning to discover that the leading bid against criterion X
is now pounds Y. Can you match it? Dare you try?
Back to the commodity future, obviously. Could 'pile it high, buy it
cheap' media be back in vogue? It would be nice to dismiss this GE
Capital pitch as a shocking example of how not to do things. But it is
by no means an isolated example - and the thing that makes it an almost
credible vision of a dystopian future is the role being played by new
And haven't we just seen Xerox do exactly the same thing in its recent
pounds 8 million pan-European direct marketing pitch? The final
shoot-out was conducted in an online auction, with finalists submitting
offers relating to budget, production and fee costs. And, come to think
of it, aren't there lots of companies around these days that exist to
auction media inventory online?
We could actually be entering a media-by-auction age - taken to its
logical conclusion, advertisers will eventually be able to cut out the
middle man and just ask the media owners to submit their best prices
A nightmare scenario? Actually, there are some who don't think so. Greg
Turzynski, a partner in Optimedia, says the GE Capital approach might be
years ahead of its time. But in the end, he concedes 'the internet is a
fantastic tool but it doesn't replace relationships and negotiating
skills. For instance, online sales sites have had great success in
providing buyers with broader access to all the opportunities but far
less in getting buyers to close the sale online.'
And, of course, Turzynski is not alone in pointing out that conducting
an auction for marketing services obviously means the service is reduced
to a lowest common denominator commodity.
Some despair at this apparent evidence that the industry's efforts to
educate clients have fallen on deaf ears. One source not a million miles
away from the GE bid process comments: 'This is a hugely depressing way
of looking at the business. We've spent years talking about
communications planning and bringing a strategic vision of what media
can do for the brand. You sort of hoped that by now someone out there
might just understand that there's no point in buying something cheap if
it's something you don't want.'
Matt James, the managing director of Manning Gottlieb Media, seconds
that opinion: 'If this is true, it's a sad indictment of where some
people are trying to push the business. We've all seen pitches where the
procurement people have been involved but usually there's the bit in the
middle, which is about marketing.'
He adds: 'I wouldn't go as far as to say that the internet is being used
in an entirely negative way. There are beneficial efficiencies in
trading to be achieved from, for instance, pooled inventory and you can
then use the time won in that way to develop creative relationships and
strategic solutions. But commoditising other parts of the process is a
danger, there's no doubt about that.'
And media owners are by no means happy either. For the big TV sales
points, this simply reflects the market's obsession with discount - an
obsession originally fostered, they maintain, by the rise of media
auditors. Auditors, of course, have been fielding cheap shots like this
for years. John Storey, the group managing director of Media Audits,
says it is nonsense to imagine that pitches are won purely on the price
numbers. But even he admits he shares some disquiet about the way the GE
pitch is being handled.
Some, however, believe that this whole episode is actually symptomatic
of a deeper malaise. 'There should be widespread concern these days that
a large percentage of clients are actually abdicating responsibility for
media,' one source asserts. 'They typically spend less than 2 per cent
of their time on it. They believe that the big operators are much of a
muchness now, in terms of their creative approach to a brief. They call
in the purchasing department to oversee the pitch and use auditors to
measure performance. So the people involved aren't passionate about the
specific communications requirements of the brand. That's the real issue
that people should be worried about.'