As the ever-evolving media landscape changes up agency models and agency relationship models, the way the agency selection process has previously been carried out has become inefficient and at times poorly managed. Agencies and clients are sinking huge costs into pitches that have no guarantee of outcomes and, ultimately, the time involved is not only disruptive to all involved, it’s slowing down the marketing momentum.
With this in mind, the Association of New Zealand Advertisers (ANZA) and the Commercial Communications Council saw a clear need to help reshape the approach to the agency selection process and yesterday published a Code of Best Practice to act as a guide designed to ease the process in the New Zealand market.
It’s designed to cover all types of agencies from creative and media to experiential, digital, PR and will hopefully be the tool that fixes future pitches that would otherwise end up like those that have previously gone wrong.
“It’s fair to say there are frustrations on both sides but having said that, there are a lot of pitch processes that go very well,” says Commercial Communications Council chief executive Paul Head. “We’re not saying things are fundamentally broken, we’re saying that there’s opportunity for improvement on both sides, for everybody to lift their game.”
That opportunity for improvement was recently pointed out in research conducted by NZ Marketing via its research partner TRA that asked agency heads to share their thoughts on clients.
It found agencies are united in their opposition to the pitching process as it’s seen as time wasting and expensive for the agencies involved. Respondents said it’s often not worth the investment when clients value the creative idea over what's right for the brand and the business.
“It's a shocker. Imagine going to five architects to design you a house, pay them nothing, pick the one you like and take the bits of the presentation from the others you liked. It must change,” said one respondent. Another said: “It's costly and a false way of working – clients should remunerate agencies they ask to contribute to pitches to ensure the best results.”
ANZA chief executive Lindsay Mouat concurred with those opinions when explaining that among clients, there is little awareness of the direct and indirect costs generated by pitches.
“A major pitch may generate costs of $500k per agency in hard costs and head hours. Multiply this by say four to five agencies and we have a very expensive process.”
And despite the finance and resource that goes into a pitch, he added that there’s no certainty of the right outcome and this too came through in the agency heads responses.
“A pitch process is meant to be a chance to see an agency in action, what it'll be like to work with them, and how they think/create. The problem is the pitch process is so removed from the reality of day-to-day engagement that clients only see a fake view of the agency. Clients should review the work the agency has done for other clients, talk to those clients, meet for a chemistry session, then choose an agency. If still unsure, give the frontrunner agency a real/live/defined project to work on, see them in,” said one.
To sum up just how reticent agencies are to get involved in a pitch that isn’t worth their while, 95 percent of respondents said they had declined to pitch for work. The reasons cited include the pitch or client not aligning with the agency values/approach; a conflict of interest; not trusting the prospect; unrewarded time; and resource and a shortlist that is skewed towards a predetermined outcome.
Reasons given for declining participation in a pitch:
From a client perspective, it’s also important to note the importance of a well-structured agency selection process, as a poor process can lead to the appointment of the wrong agency and need to repeat it all again shortly after.
It can also have a negative impact on the client’s reputation in the market as evidenced by a casual scroll through the StopPress comment section under most pitch stories.
To give one example, 2degrees came under fire for sticking with its incumbent agency, Special Group, last year and then parting ways with the agency seven months later. One commenter went so far as to say: “What a disgrace this client is. To run an 11-month pitch and then cull the winning agency within seven months.”
The comments kept coming as DDB was announced as its new brand agency after chief marketing officer Roy Ong met with agencies he saw as potential partners. One read: “Great result for DDB without having to go through the pains of last year's pitch. These clients certainly have the measure of us ever more abiding agencies.”
It’s frustrations like these ANZA and the Commercial Communications Council hope to see come to an end as the Code of Best Practice streamlines the agency selection process and puts some guidelines around it.
To do that, the document is broken into two parts: the first being a guide to what clients need, what’s available and what’s going on in the local market, and the second being the guidelines for clients to manage the process themselves.
Included in that are six competitive review best practice principles that give advice on what to do before the review process is started, how to get it started, briefing and selection, managing the review process, making the decision and post-review.
The content in the guide is based on a series of interviews with senior New Zealand marketers and the heads of a range of different communication agency types, as well as best practice from the World Federation of Advertisers (WFA) and the European Association of Communication Agencies (EACA).
“From our perspective, it’s global best practice,” says Head. “We’ve taken global best practice and shaped it for New Zealand and made it relevant for New Zealand clients.”
And despite it only being available for one day so far, feedback from local agencies and clients has been positive. Head says the document has been through agency managing directors and CEOs that make up the Commercial Communications Council board as well as the senior marketers on the ANZA board prior to its publication and subsequent to yesterday he’d received several emails from both agencies and clients calling it a great initiative that’s long overdue.
But do you need to pitch?
Not only does the Code of Best Practice aim to streamline the pitching process, it also aims to help clients assess whether or not a pitch is the best solution to their needs. This advice comes in the form of six different marketing service models that have been identified as commonly used in New Zealand.
No one is more inherently right or wrong than the other, the document states, but different approaches will better suit different client needs.
Outlines of approaches including lead agency (plus specialists), integrated model, one-stop-shop, project by project, shared in-house and outsourced, and client-led (plus specialists), provides an opportunity before clients begin a pitch to look at an alternative marketing model that might best fit their needs.
Taking a leaf from his own experience as a client, Head says clients should not enter into a full creative presentation if there is no intention of buying and using the work. "It should not be used as an exercise to test an agency's creative skills," he says; and if that’s what the client wants to do, he suggests an exercise of looking at credentials, agency reels and the work. The same goes for a media agency.
“Think about what you need and don’t put the agency through hoops you don’t need to put them through,” Head says.
From ANZA’s perspective, Mouat says it expects to see a reduction in the average number of agencies included in pitches. This will happen with advertisers carefully considering their service needs and narrowing down their long list of candidate agencies to a smaller list of viable prospects.
“If we can eliminate poorly constructed pitches with an excessive number of candidate agencies, the guidelines will be a success.”
However, that will only be the case if they are used and given the Code of Best Practice is simply a set of guidelines, it’s not being enforced. Instead, both ANZA and the Commercial Communications Council are actively encouraging both clients and agencies to use it.
When discussing its use, Head says the worst thing that could be done with a document like this is to stick it on a website and hope people go looking for it. What he hopes to see is agencies table the document at the beginning of the new business process and say: “This is the industry best practice that’s been agreed by the client body ANZA and the agency body the Communications Council.”
“We can’t make people use them, but what we can do is table them at the beginning of a conversation and say ‘look – this is best practice, we hope you refer to it and take the bits out of it that are relevant to you’,” he says.
“We’re really positive about this initiative and we just hope people refer to them and use them. It is global best practice that has been modified to reflect the New Zealand environment and give clients an insight into what’s available and what they need to think about and once they’ve decided that, what the process could be.”