Guidelines on client-agency relations and best practice in the pitch process

2. Guidelines on client-agency relations and best practice in the pitch process PANA GMM 11.25.10

3. AGENDA1. About this presentation 2. Objectives3. Reasons for a Pitch4. Guidelines a. Before the Pitch b. Pitch Process c. Post-Pitch5. Reference Materials

4. ABOUT THIS PRESENTATION

5. This presentation provides guidelines for both parties, the client and the agency, on how to organize, conduct and conclude a pitch process leading to a new client-agency relationship. Sources: World Federation of Advertisers (WFA) European Association of Communication Agencies (EACA)

6. OBJECTIVES

7. OBJECTIVES • To produce a win/win for all parties: • To enable clients to find the agencies that best fit their needs • To enable agencies to pitch successfully and sensibly • To help marketing procurement achieve maximum value for the company

8. REASONS FOR A PITCH

9. Key reasons include: • The term of the existing contract will expire and a review is mandatory • Cross-country consolidations, brands alignments, AOR assignments • Strategic disagreements or poor creative performance • Poor sales results and/or lackluster business performance • Dissatisfaction with client servicing • Agency wishes to take on a competitive account

10. BEFORE THE PITCH

11. Always try to make the relationship work before resorting to a pitch. 1

12. Experience has proven that long-term relationships benefit the health of a brand. • Working with the existing agency to discuss problems, and addressing them together is often a wiser, less costly, and quicker solution. • It is recommended that both clients and agencies have mutual evaluations conducted at least annually. This practice will serve as a valuable early warning - and solution providing - system.

13. Make a priority of dealing with the incumbent agency fairly. 2

14. If a client has decided to call a pitch (maybe after a period of trying exceptionally hard to make it work), an important early step is to discuss the situation openly with the existing agency(ies). • Clients should explain to the agency the reason/s the pitch has been decided and what the next steps would be. • There will be occasions where the decision to pitch will represent a vote of no confidence in the incumbent agency. In that situation, client should make it clear to the incumbent that it is not worth their while to participate in the pitch.

15. 3 If at all possible, avoid full creative pitch, which can be costly and time-consuming for both parties.

16. A huge amount of time and money is invested and often misapplied on pitching, by both client and agency. • Another option that is recommended in selecting a new creative agency is via an AGENCY CREDENTIALS PRESENTATION. • Looking for agencies with particular knowledge and experience of a client’s business • Reviewing the reputation, creative work and case histories of candidate agencies • This option is the most efficient in terms of cost (practically nil) and timings for clients.

17. PITCH PROCESS

18. Form a cohesive multi-discipline decision-making team. 4

19. The first key step is the creation of a small steering team which will manage the whole process, will be accountable for its success and towards its end, will produce the recommendation to the management which agency should be selected and why. • Typically “core” members are the marketing leader, the relevant “discipline” leader (e.g. media, interactive, marketing research), procurement professionals, reps from product management. • Use additional consultation if there is no internal pitching experience

20. Establish a firm and realistic timetable. 5

21. A precise and realistic timeline for the whole process should be prepared by the steering team. • The timeline should include precise dates for the various phases, including when to make and communicate the final decision. • Sufficient time must be allowed between the briefing occasion and the presentation; a minimum of 4 weeks is considered fair for a full creative pitch.

22. Write a clear, concise and well thought out brief. 6

23. The steering team should be accountable for the production of the brief, and its quality and completeness. • Clients should be very clear on their communication objectives, to enable them to specify the agency’s role, scope and budget. • Independent of format, an effective brief should provide information covering the following: • Client’s expectations from the pitch outcome • Description of the work expected from the agency • Specific indications on requirements in terms of organization, work processes, compensation schemes

24. The exact same brief should be given to all agencies in the pitch and preferably, at the same time. Client briefing and discussions should ideally be face to face. • Ensure that the criteria for evaluation/decision-making at each stage of the process is clear and agreed by all parties. • It is good to have some rules on who the agencies are allowed to have contact with to ask questions on the brief.

25. 7 Be open about the issue of pitch fees and expenses; always respect national rules and agreements.

26. The main objective of the pitch fee is to motivate the agencies, and to compensate them for the amount of effort put in a pitch (manhours, research and production costs, etc.) • 4As-P will be implementing a Pitch Fee of P75,000 for a full creative pitch starting January 1, 2011. • Agencies will not expect to make a profit on the pitch process. On the average, agencies spend between P300k to P500k on a creative pitch.

27. TPCC GUIDELINES • 2.8 Advertisers shall conduct a fair procedure in the bidding for Advertising Agency services. • 2.8.1Where the Advertiser asks for a speculative account bids from two or more Advertising Agencies, the Advertiser shall pay speculative bid fee prescribed by the advertising agency sector. • 2.8.2 The ideas presented in a speculative bidding are proprietary to the bidders and may not be used without their consent. • 2.8.3 The Advertiser shall formally inform the participating agencies of the results of the bid.

28. 4As ASIA-PACIFIC • ADVERTISING ASSOCIATION OF THAILAND (AAT) - Implemented Pitch Fees in 2003 - Fee: 100,000 baht • ASSOCIATION OF ACCREDITED ADVERTISING AGENCTS MALAYSIA (4As Malaysia) • Implemented Pitch Fees in 2006 • Fee: RM150,000

29. 8 Manage the pitch process

30. No agencies should be added to the list of pitch participants after the client briefing. • The timing of the presentation should be set to allow the agency to present the requested work, and the other participants to attend, ask questions and discuss the presentations. • Clients should not allow agencies to overrun their time. Any extra time spent with one agency should be allowed to all in the interests of fairness. • Client should try to hold all pitch presentations over as short a time span soon as possible.

31. Be formal about scoring and evaluating the pitches. 9

32. The steering team should make sure that all decision-makers are fully and equally briefed and present at the pitch presentations. • It is one of the task of the steering team to establish an objective scoring and evaluation system assessing each pitch and allow enough time for the participants to attend, ask questions and discuss the presentations. • A checklist with some kind of scoring system related to the priorities they determined in advance can be a useful way of keeping track of what the agencies covered and what the client thought of it.

33. 10 Making and communicating the decision

34. After the presentation round has ended, ideally within one or two weeks (allowing for business discussions), the client should decide on the winning agency. • It is recommended that the pitch decision date is determined at the briefing stage of the pitch. • All pitching agencies should learn about the decision the same day.

35. POST-PITCH

36. 11 Manage the pitches sensitively, and treat documents with respect and absolute confidentiality.

37. The client should offer the unsuccessful agency or agencies the courtesy of a debriefing. • The unsuccessful agencies must return all confidential material and information provided by the advertiser. The advertiser, in turn, must return the unsuccessful agency pitch presentation materials to the agencies as well. • The creative concepts produced under the conditions of the agency pitch remain the property of the agencies. In case ideas produced by one or several agencies not selected are of interest to the advertiser, the purchase of usage rights should be negotiated.

38. Manage the transition and hand-over process with care. 12

39. The incumbent agency’s contract should be honored, particularly with respect to the notice period and payment of outstanding billings. • The client should ensure that the incumbent agency cooperates fully in an orderly handover to the new agency. • The handover should involve all three parties: client, incumbent agency and new agency.

40. Reference Materials: www.wfanet.org www.eaca.eu www.wfamediacharter.org

41. THANK YOU AND HAVE A GOOD DAY!