Creative abuse, conflicts of interest and obnoxious pay terms: Pitching descends into 'Wild West without boundaries'

Agencies and consultants say there's been an uptick in bad behavior on the marketer side -- here's what needs to be done to course-correct.

No budget. Zero scope of work. Procurement-led. Creative robbery in the form of IP ownership. Murky conflicts of interest. Ghosting. Investment of freelancers to meet tight deadlines. Ludicrous payment terms of 120 days. And, guess what? You’re working over the holidays. 

Welcome to the shitshow. Also known as pitching. 

The marketer/agency search game has always been played like this. But it’s getting worse. Some (not all) brands are taking advantage of the broken model with abuse of power -- and agencies are letting it happen.

"It's now the Wild West without boundaries," said Matt Weiss, president, strategic growth at Huge, who spoke in the context of his many years in business development, not on behalf of the agency. "The pressure is so great to succeed -- on both sides -- that rules are being ignored and good sportsmanship is out the window."

He stressed that while this does not reflect the vast majority of what’s happening in adland today, the problem "is real and it is wrong." Weiss is calling on the industry to take a stand and not accept anything less than the 4A’s and ANA’s operating guidelines.

Weiss continued: "Market realities now dictate a different context; smaller budgets, smaller projects, no life-time-value identified ahead of time given continual shifts in relationships, and zero guarantees except the prospect of a lot of work and the allure of possibility. 

"Has it gotten out of control? Consider some play-by-play from the front lines: I've seen clients drag out processes for months with little or no direction -- shifting as they feel it necessary and at their whim. ‘I'm sorry, bear with me, we were heads down, it was leadership I couldn't get to’, or worse yet, dead air. 

"I've seen clients who want more at our expense as good partners. ‘Make it work or you're out (and by the way, you're a bad partner for not giving us a partnership deal).’ Then there is IP abuse galore: ‘We own the work upfront, we will pay you a measly $10k or $20k.’ That's a ridiculous amount of money for what they want -- our thinking, our sweat, our creativity. I've seen clients use agencies to ‘sell the idea to management.’ It's all total BS."

He said that, as a professional service industry, it falls on all of us to hold the bar. It is not a marketer problem. It is everyone’s problem. 

Weiss added: "We will be exploited until we stop the madness and just say no. No to bad practices. No to unfair practices. No to abuse. No to ridiculous time frames and no-budget pitches. There is no other industry on the planet that provides as much value as ours and has such low esteem that we can't even set an industry standard.

"This is our problem. If we are so desperate for business that we'll accept any rules at all, then it's all on us. No complaining. So take a stand. Do the right thing. Don't succumb to the pressure. Respect yourself and our craft."

Agencies: Just say "no"

These are sentiments shared by agency folk around the world.  

Jennifer Hohman, global CMO at FCB said that while today’s landscape still "includes many incredibly ethical clients and consultants that pride themselves on a clear, fair and considerate process, we too have seen an uptick in bad behavior from ghosting to inhumane pitch schedules." 

She said: "But I feel strongly that it’s not fair to lay all the blame at their door. Agencies have also contributed and continue to contribute to this gloomy situation. From winning business with unsustainable and industry-damaging compensation practices to forfeiting ownership rights, there are far too many agencies making compromising decisions. Unfortunately, these clients and agencies are beginning to overshadow what we should actually be talking about, which is how we can better build brands."

Over the past week, it has emerged that an RFP went out from a large CPG company offering no remuneration for pitch IP and stipulating they own the work.

Nancy Hill, CEO of Media Sherpas and former president/CEO of the 4A’s, has been outspoken about this, publicly urging agencies not to accept the terms.  

She explained that juggling these sacrifices marketers force upon agencies is a dilemma owners and partners face every single day. It is very easy for people to sit in judgment of shops when they agree to any one or all of these terrible conditions that are set by clients throughout the pitch process. 

"The fact of the matter is the clients hold all the cards," she said. "They always have. It is a power dynamic that allows clients to take advantage of agencies as they balance the merits of choosing to agree to these stipulations or not be given a chance to pitch for a piece of business that they sorely need. 

"Both parties lose. I say that because clients don’t get exposed to the agencies that didn’t agree to those parameters. Agencies that could be great partners who could have an impact on the brand and help grow their business. The client-agency dynamic for the selected agency is, right out of the gate, not built on trust or mutual respect. It is decidedly one-sided and based on ‘dictates’ that the client stipulates.

"The agencies lose because they face that horrible dilemma to either protect their own business interests and say ‘no’ or give in to the demands in order to have the opportunity to participate. Every intellectual instinct tells them to say no, but emotion sometimes gets the better of them."

Like Weiss, Hill is calling on agencies to just say "no." But she also underscores the realities of our business and what, on occasion, an agency feels it must do for self-preservation. 

She said the responsibility lies squarely with the clients because they have the power to conduct this process in a mutually respectful manner -- one in which both parties feel that it was a productive and transparent process. 

Hill added: "Until the side with all of the power acknowledges that dynamic and actively sets out to design a more respectful process, agencies will continue to face this version of ‘Sophie’s Choice’ every single day."

"Some consultants are charlatans"

Elsewhere in adland, industry veterans are questioning how something so important could go so wrong.

Simon Francis, CEO of Flock Associates consultancy, said that while there are a number of great marketers and procurement folk who understand agencies, pitching, remuneration and contracts, there are some who simply don’t. 

Those who choose not to use a reputable consultant tend to have poorly defined objectives for their pitches, ropey briefs and scopes, run turbulent processes and subsequently set off on the wrong foot with their agency. They blame the agency and repeat. It's self perpetuating loop of failure. An expensive one, too. 

Then there’s advertising’s elephant in the room: conflict of interest.

In a world of consolidated organizations, we all have to accept non-exclusivity, defined by Francis as when two or more clients who have similar commercial interests use a common agency. He says they can do so because strict contractual and practical "non-exclusivity protocols" prevent agency staff from working on, or being able to see or share, commercially sensitive material.

However, he insists no one should accept a genuine conflict of interest. But it’s happening. In the shadows of adland, agencies and consultancies are wilfully using ideas, money and data of their clients to their own advantage. 

For example, using digital data from one car brand on another clients business represents a clear conflict of interest, Francis hypothesized. Or, a media agency using its clients money and placing it with one media owner, in order to win that media owner's buying business. Or, a consultancy gathering media agencies' information and using it to inform their own media operation. He added that a pitch consultancy taking money from agencies to select pitch shortlists also defines a conflict of interest.

Flock Associates is on the list of 4A’s approved consultants alongside those who charge agencies membership. 

"Some [consultants] are super professional, have integrity, and are creating new models and new ways of working that agencies and clients enjoy," said Francis. "And, some are nothing less than charlatans who use the pitching process as a means to extort money from agencies, who do not have the tools or experience to do a good job.

"We believe that the pitch consultants that are getting paid by agencies are compromised. We believe they are not independent."

He added: "I have had no fewer than eight agencies call us and say, ‘how much does it cost to get on your books, so we can get on the pitches you run?’ They are very surprised when we say we don’t take any money, that we don’t want them to take us to Cannes, make our website, make us videos, or any other form inducement. Go figure."

Flock Associates' U.S. MD Mitchell Caplan said he remembers one particular personal experience which compounded his long-standing strong feelings about this: When he was CMO at a large agency, he was accidentally copied on an email from a search consultant to a colleague in which they said, "don’t worry about it -- they are not even a subscriber." 

The message was clear: They had decided not to pay-for-play and would suffer the consequences. 

"Picking someone's brain should be fairly compensated"

One consultancy that has charged a nominal annual membership since its inception is AAR Partners (its pricing flucuates depending on agency size and can come in at under $1,000). 

President Lisa Colantuono, who just closed out Brown-Forman’s global creative agency of record search, argues that intellectual property should come with a price tag, just like creative ideas from agencies to brands.

"The bottom line is simple: A review is not one-sided!" she said. "Pitch abuse is an inexcusable red flag that agencies should use as an indicator of the prospective client being a true partner or not. Moreover, agencies’ pitch IP is not free. And this also applies to search consultants."

Colantuono explained that the original concept for AAR at launch in London in 1975 was to charge an annual fee to agencies in exchange for their information stored in a registry available for marketers to peruse and fasttrack them to a shortlist. Cut down the pitch process and save the marketer and agency money.

"Fast-forward and you now have dozens of search consultants charging some kind of fee for something. Here’s my suggestion to the agencies: Do your homework and learn which search consultants have made a true professional career out of doing agency search. They have a lot to offer. If they charge a fee for services, evaluate the value against the service and the cost. Are they price gouging or is the fee ridiculously nominal for the service and consultation? 

"The fact is, after two decades of managing reviews and counseling both marketers and clients, I personally have an awful lot to share to help with agency growth and agency search. But as I always impress upon agencies: if your IP is not free, then ‘picking someone else’s brain’ should also be fairly compensated. No one should be expected to devalue and worse, commoditize themselves, their services and their years of hard work that led to valuable wisdom and knowledge that can be taught to help others."

Colantuono’s successful wrangling of the large Brown-Forman creative consolidation is testament to AAR’s model and work. She said the brand treated every agency with deep respect and appreciation, exemplifying it throughout the process. They were clear that they would need to see creative concepts as part of the pitch, but repeatedly underscored that it would own absolutely nothing without proper compensation to the agency. 

The pitch concluded this week with EnergyBBDO emerging victorious. FCB was pipped at the post in a decision that came down to the wire. Not long after the dust had settled, a member of FCB’s business development team emailed Colantuono praising her. 

Part of it reads: "Despite the loss, this pitch was the best of my career. I can’t thank you enough for everything! I can honestly say I’m looking forward to the next one."

Credit where credit's due.


What does the 4A’s think?

Marla Kaplowitz, president and CEO at 4A’s, said: "The pitch environment has absolutely shifted in the past few years. Agencies invest resources into pitching (time and money) with less return on that investment impacting duration or approach to the engagement (e.g. retainer vs project work). 

"Regarding marketer requests to own work shared during the pitch process, the 4A's and ANA are aligned on best practice where the agency owns the rights to their work unless paid fairly by the marketer. Architecture firms do not give away their designs for free. Engineering firms don't give away their plans for free. Lawyers don't give away their guidance for free. 

"An agency's work is their IP, it's their product. And no one should be expecting to get a product that adds value for free. And unfortunately, ghosting has moved from the dating world into the pitching process with some clients inappropriately managing communication to agencies."

Campaign US requested comment from the ANA but a spokesperson could not offer words within the timeframe. 


Flock’s advice to marketers 

1. Do you actually need to pitch? Have you considered a "get fit" exercise. Maybe some of the problems are on the client side and need to be fixed, not just the agency. Typical issues include briefing, feedback, alignment, appraisal, and culture.

2. Read the pitch guides. ANA and 4A’s have "how to pitch" guides. Read them. They are a basic solid start.

3. You don’t know what you don’t know. Speak to an independent consultant that is free from a conflict of interest. You can then decide whether you have the same or better skills/tools/experience, so you can decide whether to run the pitch yourself or not.

4. Be transparent especially on commercial aspects, be open, be human and high touch, build relationships, focus on process as well as ideas, ensure scope, remuneration and contract liberate great work. Run the pitch like you want your ongoing relationship to be. Use procurement to serve the pitch process, don’t have the pitch process serve procurement.


Flock’s advice to agencies 

1. Ask the advertiser why the last relationship broke down. What was their fault, and what have they learnt/changed as a result.

2. If a consultant is involved is it a good reputable, independent consultant who does not ask you for money or favours?

3. Is the brief something you can actually do (don’t overclaim, overpromise, or overstretch -- it will end in tears).

4. Insist on getting commercials out of the way early in the process.

 

Subscribe today for just $89 a year

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.com , plus get exclusive discounts to Campaign events

Become a subscriber

GET YOUR CAMPAIGN DAILY FIX

The latest work, news, advice, comment and analysis, sent to you every day

register free