Feature

Long live the pitch

The wealth of information available to marketers in the digital age could have disrupted the pitch process, but the system is here to stay thanks to the rising influence of procurement in companies and the need for advice in a fast-changing industry, John Tylee writes.

British Airways
British Airways

Adland’s marriage brokers would go bust if they relied on clients such as Matt McDowell. Toshiba’s marketing director for Northern Europe has never used one to help him choose an agency – and says he can’t imagine a time when he ever would.

"Unless a relationship has broken down, we’ll normally ask an incumbent to repitch," he explains. "The rest of our shortlist would likely comprise agencies whose work we like or with which we’ve worked before.

"I’d never appoint an agency on the basis of somebody else’s opinion. If a marketing director has to do that, I would question their ability to do the job."

If McDowell’s opinions were typical, then the game would be up for the intermediaries. Long regarded as the agency intelligence service for advertisers, is their role really being undermined by a new breed of digitally literate and savvy clients who do much of their research online, are confident enough to approach agencies directly and award business without necessarily holding a pitch?

Rod McLeod, Volkswagen UK’s head of marketing, is another who has reservations about industry go-betweens: "The world is changing and we can access more information about agencies than ever before.

"We’re fortunate in having relationships with strongly performing agencies but, if we ever had to review, we think we would know better than anybody what would be right for?us and the kind of cultural fit we would require. I think any intermediary would struggle to understand it."

So is digital changing a pitch system that is often prolonged (the British Airways review began six months ago and is still ongoing) and expensive (AAR calculates that 13 per cent of UK agencies spent more than £500,000 on pitches last year)? It’s a seductive theory, particularly in light of recent AAR research showing that the overall new-business market was down by 21 per cent in 2013.

Nevertheless, anecdotal evidence suggests that, to paraphrase Mark Twain, the demise of the pitch system has been greatly exaggerated. For one thing, just 12 per cent of the accounts that switched agencies last year did so without a formal pitch. Of these, the majority were backed by small budgets or were in disciplines such as digital and social.

For another, AAR figures show more buoyancy during the third and fourth quarters of 2013, suggesting more pitches will happen this year as the economy recovers.

Fever pitch

Peter Cowie, the Oystercatchers founding partner, says: "While the number of pitches remains pretty static, our pitch business is going up year on year." David Wethey, the chairman of Agency Assessments International, reckons pitch activity involving AAI has jumped 50 per cent over the past 18 months.

Meanwhile, ISBA helped arrange more than 100 pitches last year. Debbie Morrison, its director of  consultancy and best practice, says: "That’s a consistent figure and has been for some time now."

What’s more, corporate governance and procurement’s rising influence within companies means assigning business without a pitch is likely to become rarer. But there will always be exceptions to the rule. Last year, B&Q moved its £40 million account without a pitch from Karmarama to WCRS.

Agencies like the pitch system because they understand the rules and know how to play the game. "It has become easier for clients to find out about us on the IPA website or those of the intermediaries,"

Russ Lidstone, the Havas Worldwide London chief executive, says. "But there’s nothing better than a tightly managed and well-handled pitch through a knowledgeable intermediary."

Wethey says: "With so many agencies – and so many new ones launching – somebody has to help clients evaluate them. There’s no reason to think pitch activity won’t carry on at roughly the same rate."

Online and on time

And there’s no evidence so far that technological advances are shortening the pitch process by allowing preliminaries to be completed online. This is despite complaints from agencies that RFIs have almost become pitches in themselves. "Technology is having no impact on the pitch process," Cowie claims.

Last year’s attempt by the Crown Commercial Service to speed up the agency selection process by moving it online degenerated into a time-consuming farce. Moreover, clients tend not to be tech enthusiasts. "Clients overwhelmingly opt to have their information in hard copy," Martin Jones, AAR’s managing partner, says. "They find it more convenient."

What about the much-hailed new generation of senior clients weaned on the use of online? Morrison says: "The situation is better than it was a couple of years ago and we’re getting more pertinent briefs, but many clients are still unsure of digital’s place in their marketing mix."

The situation isn’t helped by the fact that most clients are time-poor. "I can remember when we used to arrange creds meetings between agencies and clients," Jones recalls. "No clients have the time for that any more and have become less knowledgeable about the business."

No substitute for experience

This, the intermediaries claim, is why they will always have a raison d’être. "Clients don’t know who is good and are desperate for recommendations," Morrison points out.

Intermediaries claim this is hard enough for them, let alone for clients. "There are some 17,000 agencies in the UK," Cowie says. "We’re lucky if we can keep tabs on the top 1,000."

Indeed, clients seem willing to take advice from anybody they feel they can trust. Last year, Volvo drafted in Gary Stolkin, the chief executive of the industry headhunter The Talent Business, to oversee its global review.

It is clients’ thirst for advice that keep intermediaries in work, as they know which client and agency cultures are likely to be the most compatible. "The intermediary sector will polarise, with some offering a cut-down service for procurement people," one says. "But that’s not what most of us do."

"Most clients know very little about agencies beyond the ones they work with," Jones explains. "For them, choosing an agency is like buying a car. They don’t want to spend the next three or four years worrying whether or not they’ve bought the right one."

Wethey says: "You can look online to find out what houses are for sale and at what price, but that doesn’t mean estate agents’ business has dried up."

Whether clients are being so overwhelmed with advice that decisions are becoming harder to make is open to debate. Dixons Retail took four months before agreeing to switch its £50 million ad account from M&C Saatchi to Abbott Mead Vickers BBDO in January. And Jones believes major pitches will only get longer because of the amount of work clients are putting into research and the number of internal approvals needed before making a final decision.

Another factor is the complexity?of many pitches. "Potential clients want wide-ranging recommendations about the communication channels they should be using," Lidstone says. "Nobody comes to us just for TV ads any more."

Others, like Morrison, argue that pitch periods are becoming shorter as clients have adopted short-term tactical approaches rather than long-term strategies. She says: "It’s unusual for the process to take more than three months."

Cowie suggests long reviews are in decline because they are not sustainable. "What agency is going to want to work with a client whose decision-making is so protracted that they take six months to choose them?" he asks.

The long and the short of it is that arranged marriages will be an industry phenomenon for the foreseeable future. As Morrison says: "People will always look for alternative ways of doing things, but I know of very few clients who would consider awarding business without some form of pitch."

British Airways' pitch marathon

At a time when the number of protracted pitches seems to be in decline, the British Airways contest is beginning to look as though it will give The Mousetrap a run for its money.

Expectations that it would be over by Christmas – or soon afterwards – when BA launched the review in September last year have proved wide of the mark. The complexity of the pitch is said to be the main reason why it remains unresolved. One insider has described it as "procurement gone bonkers".

THE STORY SO FAR
September 2013 BA announces review of its global creative requirements, including its links with Bartle Bogle Hegarty and OgilvyOne, as well as others handling experiential and events marketing. Oystercatchers is drafted in to handle the early stages.

October Anomaly, Grey London, Mother and SapientNitro are invited to pitch against BBH and OgilvyOne. Agencies present to a client team that does not include the marketing director, Abi Comber. Grey withdraws.

November With creative pitches concluded, BA begins examining the production and content capabilities of participating shops.

February 2014 Pitch remains ongoing, although sources suggest the finalist agencies – BBH, OgilvyOne and SapientNitro – will hear the verdict in March.

March OgilvyOne notified that it has lost the loyalty account. Just BBH and SapientNitro remain on the pitch.

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