Matthew Charlton: the chief executive of Brothers and Sisters
Matthew Charlton: the chief executive of Brothers and Sisters
A view from Matt Charlton

Pitching and how low can you go

Calls at last week's Lead conference for the advertising industry to better serve start-ups and small businesses were met with sympathetic ears.

Of course, the fact that Lucy Jameson, the former CEO of Grey London who is plotting a start-up of her own, made these pleas was not lost on all.

However, she has a point. Advertising does have a duty to nurture SMEs and entrepreneurs, and never has this been more important as we prepare to leave the EU and make our own way in the world. Let’s hope the industry musters behind it.

But this is becoming an especially difficult issue due to the size and scale of the big holding companies, which are, in many cases, larger than the clients they serve. This is magnified in pitch scenarios due to the way that the big groups create agency teams, such as WPP’s Walgreens Boots Alliance that landed the $600 million pharmacy account this week. All the brilliant work created by Mother for a decade, dashed by a P&L.

Sceptics would say that the ad industry needs to examine its soul and change its recent behaviour if it’s to rediscover its entrepreneurial zeal because some sectors of the business have never been that good at supporting small businesses that operate in their own sector.

Advertising – like everything else – is a hugely competitive place but I’d argue it’s not necessarily those that are match fit that always survive. The depth of an agency’s pockets also plays a disproportionate role and to those of us who value the plurality and vitality of our sector, this is not a good thing.

But more crucially, it’s also bad for those clients we purport to represent. The balance between the creation of outstanding creative work that will make people irrationally value their product more and build their brand and the short-term business metrics that enable them to cut cost, is too often tipped in the former’s favour. The result is a race to the bottom that benefits no one.

Everyone likes value, but not when it totally ignores price. And those agencies that are offering ridiculous value are often doing just that – huge multi-national agencies creating ridiculous deals which could include creative and media together, in which case you may throw in the whole creative account for free.

These are ridiculous deals for all involved – increasingly large multi-national agencies that haven’t won any business for a long time may even just agree to do the account for peanuts just to get the headline and the boost to reputation.

If you’ve got big pockets you can play a longer game. And what does the client get? Well, who knows but the real value in selecting the best talent to work on their business seems to be unlikely, given how everything is tied up in these "two for one" deals.

Commercial clout has always been a factor in media agencies – the ability to obtain bigger discounts has largely been what gave them their edge. But when this bleeds through to creativity, then something is very wrong – the depth of the pockets should never matter; rather the strength of the idea.

Of course it’s not all clients nor all agencies that are prone or active in this. Fortunately there are still a lot of clients out there who value creativity and what it means to their brand, and there are still a lot of agencies out there who can command a premium and refuse to get involved in a race to the bottom.

But there doesn’t need to a huge shift in the number of clients valuing procurement equally, if not more so that any other metric, in a pitch and the market can suddenly become very limited for those that won’t or can’t play that game.

No one wants protectionism – rather a level playing field – and other parts of the media business have really strong trade bodies, like the APA and the Design industry, have done well to support their members. These sectors continue to flourish, but can we say the same at a time when the number of start-ups are so low and whose younger agencies, with a few exceptions, are finding their ambitions thwarted.

We are in danger of approaching a time where if we want keep our small, very creative agencies and stop ad agencies following their media counterparts, we might need to scrap self-regulation and bring in some form of ethical code which we are all obliged to commit to.

Only then can the vigour of our industry be maintained, away from the dead hand of anti-competitive behavior that’s throttling creativity and those SMEs and start-ups that advertising is now claiming it wants to support.

Matthew Charlton is the chief executive of Brothers and Sisters.