Is The Agency Pitch Model Ready For Reform?
Creative agencies approach new business via a model that has limited benefits for the agencies pitching. The financial costs can be considerable, especially when you really drill down into what they are. We also need to take into account the less tangible costs of the agency pitching model, the human costs.
We’ve looked at this in our two blogs, The Agency Pitching Process – Understanding the Financial Costs, and The Human Cost of Pitching for New Business. Having been part of large pitching teams, Sarah, our senior designer and creative director, has extensive experience of the whole process.
When we look at how life, expectations, and the process itself have all changed over the years, we have to ask ourselves some questions. We have to consider whether it is still fit for purpose, or whether it has just been normalised for so long that while it is actively questioned, not a lot has changed. There’s a lot to lose by not playing by the rules.
Why has the agency pitch model stayed the same for so long?
Given the financial and human resources necessary for the pitch process, you would expect at some point there would have been concerted effort to reform it. The IPA (Institute of Practitioners in Advertising) and ISBA (Incorporated Society of British Advertisers) have been working on this for well over a decade.
While some positive progress has been made, you could also say the requirements have become more onerous. With a greater number of agencies often now pitching for a piece of business, a pitch is also statistically less likely to result in success.
Agencies can try to push back on what is expected from them. They can attempt to charge for something they think they should be fairly compensated for. However, if there is another agency ready and willing to take their place – and there usually is - they lose out on potential business. The only way to compete is to be in the game.
With the auditor relationship dynamic still being a big part of how companies decide who to invite to pitch, the fear of being seen as ‘difficult’ is a valid concern. Change would need collective action – and for the whole industry to move together.
Are there any signs the model is under pressure?
Most agencies used to operate on a retainer basis, which meant they had a degree of visibility in the work coming in. It also lead to an element of trust and mutual understanding. As more and more work shifts towards a project-based model this is being lost. It also means that more pitches need to be undertaken.
Burnout and talent attrition are real issues that can actually impact the business bottom line: they are no longer just keeping the HR department busy. As we mentioned in our blog on the human costs, a survey found that 43% of those working on pitches regularly were considering leaving their job. And 33% were considering leaving the industry itself. This is significant and tells a story we should be paying attention to.
What reform of the agency pitch model could actually look like
There are various ways to approach the impending crisis with the agency pitch model:
A nominal pitch fee
This would not be intended to fully compensate those pitching for business, but it would signal respect and get rid of time wasters.
A formal IP agreement
Ideas would be protected or subject to a fee, meaning any work or ideas that are ‘borrowed’ and undertaken by the client via another agency would be covered. While idea theft is hard to prove and rarely openly talked about, it happens.
A credentials-first approach
This would filter out those agencies that businesses don’t feel really have the necessary credentials before they ask them to produce speculative work. This would reduce the amount of early-stage investment that’s never going to bring in a return.
Industry-wide guidelines or a code of conduct
The IPA and the IBSA jointly launched the Pitch Positive Pledge, a cross-industry initiative, in 2024. It addresses systemic pitching behaviours and aims to make the process ‘intentional, accountable and more effective’.
More transparency from clients
More information up front on timelines, shortlists, and decision criteria would reduce wasted money and effort.
A maximum number of agencies invited to pitch
This would make it fairer to those invited to pitch at the speculative stage by giving them a greater chance of success.
The younger workforce operates on different priorities and principles
The Gen Zers entering the workforce are not willing to work under the same unsustainable working conditions that previous generations have. They'll either push back, move on, or simply not enter the industry in the first place. This is a real pressure that will need to be addressed. It could finally force change over the next 10-15 years. If the industry doesn’t adapt, it risks losing its talent pipeline.
It’s a real issue. It’s been a real issue for years. But maybe soon agencies will be able to have the conversations they need to have with their potential clients - without fear of losing business or reputation. For that, we all need to take a step towards what we want our industry to look like.
Which side of the debate are you? How do you see change happening? Or are you already seeing it? Please let us know. And if the agency pitch model means your teams need support, please get in touch.
Image by Vitaly Gariev