In March, the MAA called for a strike against drinks business AB InBev, citing its pitching practices as 'despicable'. The association claimed that a recent e-auction held by the company asked agencies questions such as how low they would go on their ratecard, and how much work they would offer for free.
In a statement, Scott Knox, the MAA's managing director, said: "AB InBev was behaving disgracefully forcing agencies to provide them with discounts and financial sweetners across every possible work stream, even asking them to contribute hefty rebates that finance their CSR initiative 'Better World', which AB InBev promptly takes all the glory for.
"What would make this a 'Better World' would be for clients such as AB InBev to stop screwing agencies over payment terms and rate cards, and approach any negotiation on price in a fair and respectful way."
Experiential experiences
The MAA counts a number of experiential agencies, such as Because, Haygarth and Itch, among its members. Has the brand experience industry also noticed an upswing in brands exploiting the pitching process?
Dom Robertson, managing director of RPM, said there is no doubt that the practice has shifted in nature. "The experiential landscape has changed monumentally since we were founded 22 years ago," he said. "We now pitch against anyone from small startups, to large media and PR agencies. All claim that they can create and deliver experiential campaigns.
"We have had to decline multiple pitches over the last 12 months as a result of clients being purely interested in the financials, sensing that they had no interest in appointing the agency that would best solve their business challenge."
Mobile Promotions’ managing director, Robin Carlisle, said: "We have experienced similar processes to what’s been found in the MAA’s research. It’s a saturated market for experiential agencies right now, which means the tender process is not just competitive, but can sometimes be unnecessarily tough.
"Only recently we experienced a forward auction pitch with a big-name brand who we have worked with for many years. The process put an unnecessary strain on my team and ultimately made us ask questions of the lack of balance of quality versus the cheapest price."
He added: "We have pitched for numerous companies with great brands and great reputations, but have learnt that just because it’s a respectable and ‘fair’ brand, it doesn’t mean it will always seem so in the pitch process."
Matt Tabb, managing director of BWP Group, agreed some companies are guilty of purely coming to the pitching table with a financial agenda. He explained: "There are businesses out there who are only interested in squeezing their supplier base, be it raw materials or marketing services, to get the lowest possible price, while still expecting the best possible product.
"Ultimately they have lost sight of the fact that their suppliers are businesses too and have a right to earn a profit and be paid in a timely fashion."
Bite the hand that feeds?
Battling these practices is tough, as no agency is in the market for losing a potential client. Indeed, the MAA’s members ultimately declined to strike and very few agencies were willing to speak to Event about the matter.
Last week (7 May), the MAA published ‘Pitch on a Page’ – a set of rules for clients to follow when sending out briefs to agencies. Its six guidelines are what Robertson believes are needed to combat poor practice in the industry.
"We need to look closely at the pitch process, especially considering the increasing influence of procurement," he explained. "For me, casting the net out to scores of agencies is not the way to find the perfect partner for the job.
"Taking the time to meet and get to know a smaller number of agencies will not only save time and investment for all parties, but ensure everyone understands the business challenge and the brand; ultimately delivering stronger pitches."
He added: "Transparency, integrity and trust are the foundations of these long-standing relationships, as in all walks of life."
Carlisle agreed: "Surely companies should consider that if they work with a trustworthy agency with a strong reputation for delivery beyond expectation, then price alone is not the best measure. Price is of course a key factor, but should not be the only factor."
Tabb’s advice to new agencies confronted with difficult would-be clients is simple: walk away.
"Steer well clear and leave it to someone else to wrestle with," he said. "For smaller businesses - as agencies invariably are - relationships count for much more. You simply can’t build a win/win, lasting relationship on these draconian commercial footings."
Key guidelines for clients, from the MAA’s Pitch on a Page:
- Approach no more than eight agencies for shortlist creation.
- Meet no more than six agencies for chemistry sessions. These should comprise of a single 60-90 minute meeting.
- Invite no more than four agencies to brand’s offices for pitch briefing. Invited responses should only involve strategy and creative conecepts.
- There should be an open door policy in place to allow further question submission, the responses to which should be shared with all agencies participating.
- Final pitches should take place in a 90-minute meeting, allowing time for questions.
- Full feedback should be given to all agencies within five working days.
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