A lack of preparation from brands is combining with a sense of exceptionalism from agencies to make the process of pitching for media accounts more difficult. Alex Brownsell from M&M Global discusses this here:
“Brutal,” “charmless,” and “soul-destroying” – these are just three of the unfavourable descriptions used by industry sources to sum up Volkswagen Group’s global review of its $3bn media arrangements, which concluded last year. A review which, by all accounts, was by no means the most challenging of recent times.
The pitch, eventually won by Omnicom Media Group’s PHD, was certainly epic in its scale: the client demanded that participating agencies attend 80 meetings across three continents, over a 17-month period. And, while certainly one of the largest global media pitches of recent times, its enormity and complexity is symptomatic of clients’ desire to work agencies harder.
Some of this up-scaling is inevitable, of course. No longer are media agencies simply being asked to prove planning prowess, buying muscle and international coverage – although all three remain important factors. However, brands now also require a host of other capabilities, from technology and data services, to broader consulting and business transformation.
Furthermore, last year’s ANA report into media rebates in the US has injected a sense of suspicion over contracts, remuneration and the transparency of agency revenue models. While the situation has not descended into open hostilities, it has contributed to a growing sense of friction in the pitching process.
Pitching has always been an art for a particular type of personality – and certainly not for the faint-hearted.
Bill Merrick joined the industry over 30 years ago, subsequently experiencing life on both sides of the fence, as worldwide managing director at Ogilvy & Mather and marketing director for Compaq Computer. Now as UK and EMEA managing director of consultancy TrinityP3, Merrick recalls his “horror” at the conduct of marketers and agencies during pitches.
“It takes youth and enthusiasm to want to work on [pitches] in the agencies, and the greed of the owners to want to win them,” he says. “And, to be honest, I haven’t really seen a fundamental change in all that time.”
“No longer is it good enough to be able to mount a sharp-looking presentation in London or New York and think, ‘That’ll do’”
PHD Worldwide executive vice president Hilary Jeffrey, who played a leading role in the network’s successful VW pitch, agrees that new business has always been a testing discipline, and one determined by the quirks and complexities of the brands themselves. She recalls a Nike review called soon after the Millennium, which – even in those pre-mobile and social days – was as “extensive, thorough and detailed” as contemporary pitches.
According to Jeffrey, all major media pitches of modern times have incorporated five consistent strands: savings delivery, strategic excellence, tools and technology, contractual compliance and chemistry. Those five areas have “always mattered”, she says, even if the proof of competency in data and technology have become more prominent in the past few years.
However, the most significant change of late has been the “explosion” in scale, admits Jeffrey: “No longer is it good enough to be able to mount a sharp-looking presentation in London or New York and think, ‘That’ll do.’ The expectation is that you will go through meetings in several continents and cover 50-plus topics.
“You need armies of people. It’s equivalent to the effort required to run the business.”
THREE TYPES OF PITCHES
International pitches today fall into three general areas, says MEC’s global head of business development, Hamish Davies.
Many brands continue to search for a general, full-service planning and buying partner, while increasing numbers of pitches count as full-service planning and buying ‘plus’, with added digital business transformation consultancy services. A third, and rapidly growing, category is seeing clients “compartmentalise” briefs into six or seven “lots”, with agencies able to pitch for the entire business, or select particular areas of expertise.
Furthermore, most pitches can be divided into two over-arching categories: those looking for a reduction in media costs, and those seeking improvements to marketing processes. “It’s quite obvious when you pick up a brief, whether it’s a cost-driven thing, or trying to do things better,” adds Davies.
The choice of pitch consultant – much complained about, even if agencies tacitly acknowledge their usefulness in professionalising reviews – is also telling. The sight of Ebiquity’s name on an RFI is a tell-tale sign than the advertiser is looking to strip out costs; in comparison, companies like ID Comms and MediaSense specialise in more transformative pitches. No one consultancy, says an agency executive, is “particularly good at both”.
Then comes the most dreaded part of the pitch for many: never-ending RFI data entry. New business teams spend days, weeks and weekends filling out interminably long questionnaires and spreadsheets, demands which unanimously raise the hackles of agency staff, and are almost certainly ignored by clients once completed.
“I would advise clients to take a long, hard look at what they really want out of a partner, and then work with a good consultant to focus on the bits they really want,” says Davies. “Why not just ask the stuff that is mission-critical to moving your business forward? Focus is good.”
POOR PITCH PLANNING
Once the RFIs have been returned, and the pitch is in full swing, expectations of a swift and disciplined process are often dashed by poor organisation on the part of the client.
The introduction of procurement departments has, by and large, helped to ensure suppliers are found in an orderly fashion, but chaos is a troublingly common companion in the pitch process.
The primary issue, says TrinityP3’s Merrick, is that too many marketers are looking to swap agencies for the “wrong reasons”. Once the pitch begins, many swiftly realise they must readjust the process, he claims: “Figure out what your business plan is, make sure it is properly written down, make sure the plan is agreed by all component sections of the C-suite, that the commitment to expenditure and resource is there. Then, and only then, when you have the problem properly stated, go out and talk to agencies and ask for help in solving them.”
“Who is going to make that decision? You have to agree that right at the beginning. If you try to do it at the end, then it becomes entirely subjective”
The varying degrees of media expertise within client organisations can also impact the chances of a successful and smooth pitch.
Some large-scale international advertisers – the likes of Unilever and Procter & Gamble – are seasoned pitchers, doing so every two or three years, with in-house oversight from scores of ex-agency employees. Others, including VW, according to sources, are hampered by a “surprising” lack of deep media knowledge.
It can cause calamitous consequences. Tom Denford, chief strategy officer at ID Comms, says his business is too often called in to rescue a pitch mid-way through a process, after the advertiser has encountered internal and external obstacles, often in the form of dozens of business heads demanding a say in the decision-making.
Johnson & Johnson’s vast global media pitch in 2015, won by IPG Mediabrands’ dedicated J3 unit, was an example of precisely such chaotic pitch planning, claims one source. The client “had not foreseen the outcomes” of the review, causing it to almost “unravel” further down the line, according to one agency new business expert.
More than anything else, says Denford, advertisers must leave enough time for preparation: “Multi-national pitches typically include loads of internal stakeholders across many geographies. They spend so long trying to align everybody that they run out of time, and simply have to go to market, and the pitch ends up being a disaster.
“Who is going to make that decision? You have to agree that right at the beginning. If you try to do it at the end, then it becomes entirely subjective, and subject to political, external pressure.”
‘LESS B*******, MORE FACT’
If advertisers are guilty of under-preparing for pitches, then agencies stand accused of lacking the skills increasingly required to take part.
Sean Limbrey, formerly global procurement director in marketing at Bacardi-Martini, and now a marketing transformation consultant at Flock Associates, argues that international media reviews have taken on a more rigorous, business-focused guise.
The terminology used in conversations with distribution and IT partners is entering the advertising lexicon, he says – demands such as quarterly reviews, auditability and multi-functional steering committees.
“Rather than being all about great ideas, the client audience has changed to be multi-functional teams – people from finance and so on – and these people are used to seeing business processes. It demands clearer transparency on what the hell is going on. What are we spending our hundreds of millions of dollars on?” says Limbrey.
“Agencies are frightened because they don’t know how they are going to be able to build governance processes for the new way of working. Less smoke and mirrors, less bullshit, more fact. That is what they are being asked to deliver, and that makes them very nervous.”
In any debate about media reviews, last year’s report by the US Association of National Advertisers is rarely far from the conversation. The findings appeared to confirm long-held fears by marketers that agencies were not always acting in their clients’ best interests, and this has added a layer of suspicion to the pitching process.
Limbrey claims that recent account reviews have taken place as a result of “divorce moments”, with “empowered” clients choosing to end relationships. “A whole load of marriages have gone wrong,” he adds.
ID Comms’ Denford agrees that, post-ANA report, many advertisers have realised they agreed to “crappy” contracts with agency partners, and have used pitches to “readdress the balance” in their favour.
“It’s just common sense. If you are a client, and you are talking to three or four agencies, there will be a point on that timeline where you get this optimum negotiating leverage, with keen agencies [still engaged in the pitch]. That is the point at which you want to secure terms, when you still have competitive tension,” he says.
Agencies have a duty, admits PHD’s Jeffrey, to ensure that CMOs and media directors are clear on how they run their businesses: “Giving enough focus on clients’ understanding and transparency on how all money is made and bills are paid, I think that has become a topic that 10 years ago didn’t get enough attention.
“There was an assumption clients understood what we were telling them, and, of course, they didn’t. So there is an onus to ensure they understand what we are saying. We don’t want to do anything illegal. I think it is fair to say clients didn’t understand this stuff, and now they do.”
GETTING TO KNOW YOU, BETTER
Yet, and despite the obvious challenges, as a means of matching needy clients with expert media support, the pitch is unlikely to be replaced any time soon.
Some minor changes should be made to secure short-term improvements, not least mid-pitch client-agency workshop days, where the most relevant personnel from both sides – rather than executive-heavy pitch teams – can work together to solve problems, and explore the potential of a longer-term relationship.
The answer for a less turbulent future may also lie in the growing trend for the more “compartmentalised” pitches, as described by MEC’s Davies.
MasterCard’s $250m global media review, concluded in 2014 and won by Dentsu Aegis Network’s Carat, was an example of such a focused brief. Participating agencies were set a strategic challenge, rather than a broader demand for media cost savings or technological assistance. It resulted in a “relatively simple” pitch process, according to one source.
“If it is a cost-cutting exercise, because they have promised shareholders they will cut costs, make that front and centre of what you are asking agencies”
A new industry opportunity is opening up, says Flock’s Limbrey, to help brands to clarify what exactly they need – before calling a pitch. Consultancies are jumping into the space, but agencies – with their accumulative decades of experiences and breadth of tools – could also assist clients in the assessment process.
ID Comms’ Denford is an ardent supporter of what he describes as the “fragmentation” of pitch scope, with “more progressive” clients examining areas including planning, buying, strategy, data mobile and retail in isolation, rather than appointing a single agency network to handle the business end-to-end.
It is a scenario which excites some agency executives, even if it may not be welcomed by the agency holding groups, which have long encouraged advertisers to ever-greater levels of consolidation.
“The business itself is getting more complex. Because we are stretching what we offer as an agency, client briefs are stretching as well,” says Davies. “Media can start shaping business in a more fundamental way. I see it as quite exciting. Is it more work? Certainly. But the opportunities are wider as a result.”
Fundamentally, a greater dose of clarity and honesty will be needed to cure international media reviews from their existing ills.
PHD’s Jeffrey sums it up from the agency perspective: “We need absolute clarity on what they want to achieve from it, and not being shy about stating it. If it is a cost-cutting exercise, because they have promised shareholders they will cut costs, make that front and centre of what you are asking agencies.
“Don’t wrap it up in all the other sophisticated questions to make it look like you are a smart marketer.”
If clients are to secure the agencies of their dreams – essentially businesses with the functionality of a German automotive production line, imbued with world class creative processes – then this change of approach cannot come soon enough.
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