It's almost two years since I was elected president of AssoComunicazione, which represents Italian agencies. The situation facing agencies in Italy was bad and getting worse. Technological progress has resulted in a market that's in continual transformation. The past few years have seen employment levels drop by around 20 per cent and flat growth. What's more, it has been devastated by the constant driving down of remuneration.
As an association, we've been working hard to re-establish the right relationship between clients and agencies. In particular, I've tried to tackle the problem of pitches, in which it's often not the agency that offers the best professional advice, but the lowest price, that wins.
Contests have involved up to 20 agencies, with no possibility for agencies to offset some of the pitch expenditure, which can cost upwards of EUR20,000. Timelines are tight and responses from clients can take months. It has been known for pitches to be held by companies in order to "monitor" the market. A study conducted among our members revealed that the total cost sustained by agencies to take part in pitches during 2005 was more than EUR16 million. That's equal to 3 per cent of net profits.
Our answer? A small piece of paper that sets down the rules for a pitch - budget, timescales, who will participate and what (if any) the minimum reimbursement should be.
Agencies commit themselves to keeping the contents of the brief confidential, while the client pledges not to use the creative ideas of the losing agencies.
The scheme, backed by the majority of Italian agencies, launched at the beginning of this year. Enlightened clients have supported us, but still there have been some difficult and unpleasant cases.
Some agencies have been given the courage to withdraw from pitches they thought were being inappropriately conducted.
It's not been easy, but we've been rewarded for our persistence. By July, 82 per cent of the forms handed in had been signed by companies. In 51 per cent of cases, they agreed to reimburse some of the pitch costs. On average, 4.3 agencies took part in each pitch.
Since September, we have decided to turn our attention from the private sector to pitches conducted by public authorities, where low agency remuneration is too often considered to be more important than creative quality or strategic thought.
It's early days, but the progress we've made in the self-regulation of the pitch system would have been unthinkable a year ago. I hope it heralds a time when intellectual honesty and professional seriousness will be regained by both agencies and clients.
- Marco Testa is the chairman and chief executive of the Armando Testa Group in Milan.