Opinion: Perspective - Time for IPA to step in and enforce pitch etiquette

As soon as the news of Ogilvy Group's easyJet win broke last week, the rumours started that the agency had undercut its rivals to secure the business. Some agency chiefs were so incensed by what they were hearing that they even felt compelled to ring Campaign and voice their disgust.

The figures being bandied around seem too low to be credible: put it this way, combine what the agencies involved in the process would have spent on the pitch, and you get a figure substantially higher than the rumoured final base fee.

Of course, there is no evidence whatsoever to suggest there is any truth to the gossip - after all, "they undercut us" is a common loser's excuse, and Ogilvy denies the talk out of hand.

But what isn't in any doubt is the fact that the whole pitch process could almost form a "how not to" guide to building good client/agency relationships. When the original pitch was called off, agencies were quick to voice their criticism of the client. This, however, did not stop a rumoured 20 agencies lining up for a second bite at the cherry - and who could blame a client for wanting to take advantage?

Set easyJet to one side for a moment and there is no doubt that undercutting happens, and for a variety of reasons: to plug a gap left by a departing piece of business or, in this market of ever-declining margins, to make up a new-business shortfall. Whatever the mitigating circumstances, it's a singularly short-termist practice. And it's one that will continue for as long as agencies are prepared to respond to demands from clients that they work to ever-decreasing fees.

In the context of pressure on individual agencies to win new business at any cost, it might seem unrealistic even to expect anything different.

But if the industry doesn't work together to stop this kind of thing happening, prices will only continue to fall.

This is where there is an obvious role for the IPA to take strong action against members that act in a way that is detrimental to the industry as a whole. Some even suggest that it should fire recalcitrant members that undercut or otherwise go against its advice on pitch etiquette.

Unlikely as it may seem, this does happen overseas: in Thailand, for example, the local trade body recently called for Saatchi & Saatchi to resign from the organisation after the agency accepted a new client that had refused to pay the industry-standard pitch fee.

While it might be hard to imagine the IPA biting the hand that feeds it, without action from the industry body to ensure that every agency toes the line, nothing is going to change. And it won't only be prices that fall - respect will be the next thing to go. If agencies want to be treated like professionals, they need to start acting like them. After all, it's hard to imagine a firm of lawyers cutting their prices to the bone to secure a piece of new business.

While base fees for traditional advertising continue to slide, agencies are trying their best to look at new revenue streams, with particular focus on the ever-growing digital ad market. Such is the desire to demonstrate leadership in the sector that a number of ad agency chiefs have volunteered their services as judges for this year's Campaign Digital Awards.

Compare that with last year's inaugural awards: not an advertising agency in sight on the list of winners and scarcely a representative from the world of above the line on the night itself.

This change in attitude is welcome (not to mention overdue) and if agencies really do start to invest in the area, the digital independents will have to look out if they are to avoid erosion of their market leadership.

But convincing proof of a genuine focus on the sector will only come when the award-winning digital creative work is coming from the agencies rather than the independents. And that's a change that is going to take a while to come yet.

- Claire Beale is on maternity leave.

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