Why abused agencies should put a price onideas

Oh woe, says the ad agency chief executive, the burden of quarterly reporting to the faceless accountants in New York grows heavier every year. And so do those pesky new-business targets.

Pecuniary exactitude goes hand in hand with fearsome growth demands in the 21st century advertising agency. So much, so painfully obvious. So it's staggering to discover that agencies spend a whopping £43 million and 239 years of agency time trying to win business every year. Not only that, but they happily surrender armfuls of their best ideas in the process: someone has managed to work out that 70 per cent of the good ideas that an agency develops and presents every year are actually revealed in pitches - usually for free. (Mind you, someone's also calculated that 56 per cent of the work that actually wins pitches never sees the public light of day, so maybe the pitch ideas aren't so good after all.)

Despite the fact that boffins somewhere have nothing better to do than drum up slightly spurious statistics on the minutiae of the pitching process, it's still a fascinating insight into the lengths that agencies will go to in a desperate bid to net clients - clients that so often pay miserly fees and might easily review again within a matter of a short few years. But take a look at page 17 of this week's Campaign detailing the findings from the IPA's Confidential Pitch Advisory Service - launched a year ago - and it's obvious that, far from respecting agencies' efforts, all too often clients are abusing the whole pitching process.

The IPA notes that some clients put their business up for pitch every year or two, accompanied by the regular reneging of contract responsibilities. Then, shock horror, some clients even have a preconceived idea of the agency they want to win their pitch and simply go through the motions with the other contending agencies.

And what about those willy-waving clients who inflate their budgets. Agencies are thus encouraged to make a major investment into their pitch work in the hopes of landing such a juicy prize, only to discover that the promised budget is no more than the marketing director's wet dream. (Then again, at Campaign we have plenty of experience of winning agencies being complicit in this big-budget fantasy.)

Consider, too, the weary familiarity of the following scenario: an agency is told they did the best pitch, came up with the most amazing creative idea, but sadly the next-best agency was significantly cheaper ... any chance of dropping your drawers and bending over?

The list of abuses goes on, and I don't really need to elaborate: I'm sure you've all been there. Now the IPA is beginning to build up a profile of abusing clients, is there not a case for some of them being blacklisted? Wishful thinking, I suspect.

The reality is, of course, that the battle for business is fierce and the differentiators between agencies in this over-supplied marketplace are hard to find. As long as there are agencies desperate enough to handle business at bargain-basement rates, price will remain one of the key differentiators in the pitch process. And when the business is apportioned, even the best agencies still give away their intellectual property as part of the (cut-price) service.

The notion of clients paying for pitches is a well-worn debate and some clients do now cough up a small sum. Even so, if there is any solution to the costly pitching mess that preoccupies so much of an agency's time, it surely lies in finding some way of putting a proper price on ideas ... those offered up in a pitch and those delivered once an agency starts work on the business.

Until agencies manage to charge for ideas, the whole pitch process will continue to see agencies squandering their most valuable assets. And business will continue being won on rates that fail to recognise the value innovative creative ideas can add to a client's stock.