The inquiry comes in.
Your small(ish) agency is being invited to send a response in to a huge, multi billion-dollar company for a new assignment. A company with many brands and many opportunities for an agency to get new work, the lifeblood of every small business. You get excited. You talk about the possibilities. You sign the NDA so that you may receive the details of the process, the timing and the initial brief.
You start reading. It sounds like it is right up your alley, it plays to your strengths, it involves a demographic that you have focused on and know well. "This will be great, we should likely invest the time and effort it will take to win this," you tell each other, even as your minds are racing with all the other things that will have to fall by the wayside (both personal and professional) to do this well.
You keep reading. First bump: "the client will retain all ownership of materials both in written and oral form presented by the agency during this process."
"Oh, does this mean they’re paying for this pitch?" you wonder. Looking further into the outline, it is clear that no, there is to be no compensation for the pitch. "Hmm. We’d be going against every piece of advice we’ve gotten not to give away our work product for free to do this."
Here’s the second bump: it is clear that the pitch process will be taking place over the Thanksgiving and Christmas holidays. "We’ll have to ask people to work long, hard hours and give up family time to get this done. It’s the only way. Do we really want to do that?"
Third bump: it is for a project. No budget is outlined. No scope of work is indicated. "Not even sure what we actually win if we do this."
Fourth bump: 120-day payment terms. Fifth bump: 20 agencies being invited. Sixth bump: all inquiries go through procurement, no chance to talk to the brand leaders. The list of bumps goes on.
You start to weigh everything.
You need the new business. Last year was only so/so and you need to make up some revenue. This is a big company with lots of brands and unlimited potential for future assignments. It could lead to something important for your agency to move to the next level. The assignment seems right for you and you think you could help the brand with their business. It is also new revenue that could really help to give the agency a boost and allow you to give people the bonuses they have certainly earned.
BUT, you don’t like giving up your IP for free AND you’re not even sure what this project will be worth AND people will have to sacrifice a great deal to work on this pitch AND you will likely have to hire some freelance help to even get this done. This will cost the agency money out of pocket and possibly divert attention away from paying clients’ business while you are doing it.
This is the dilemma that agency owners and partners face every single day. It is very easy for us to sit in judgment of agencies when they agree to any one or all of these terrible parameters that are set by the clients when asking agencies to pitch for their business. The fact of the matter is the clients hold all the cards. 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.
I, myself, have called for agencies to JUST SAY NO. I believe that in my core and I tell my agency clients that every time it comes up. BUT I also understand the realities of our business and what, on occasion; an agency feels it must do for self-preservation.
The responsibility lies squarely with the clients. They have the power to conduct this process in a mutually respectful manner. One in which both parties feel that it was a productive process conducted in the best way to determine whether the agency and client will work well together. A process that is transparent from the beginning is clear and direct in its intent and acknowledges that an agency is a professional services firm with a business and employees to consider.
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.
Nancy Hill is CEO and founder at Media Sherpas.