How excessive pitching fuels inefficiency in Japan’s ad industry

At the height of last year’s heated discussions around work-life balance in Japan, many were quick to blame advertising agencies for making unreasonable demands on their staff. While that was understandable, less time was spent analysing the reasons for those demands. They have as much if not more to do with clients as with unhealthy agency culture.

A major contributor to long working hours, and in some cases staff burnout, is excessive pitching. According to Greg Paull, principal of R3, a global consultancy that manages relationships between clients and agencies, Japan sees more project-based pitches every year than any other market. R3 figures for 2016 show the average pitch win revenue in Japan to be 63 percent of that in China and just 6 percent of an average US win—US$198,000 compared to $3.4 million.

Pitches are frequent and, even when relatively low value, a drain on limited resources. Project-based work is also less often a way into bigger, more sustained contracts than it is in markets like the US. “It’s tough on agencies because constantly being asked for new ideas is a demanding process,” Paull says. One agency head says that even a task as minor as business card design can require a pitch.

“There is a strong tendency to turn everything into a pitch…and large shortlists are put together,” says Tony Harris, CEO of BBDO Japan, who spent the bulk of his career in London and has also worked in the Philippines. “It inevitably takes up not just time and resources but crucially, momentum. Pitches, however big or small, are competitive and require adrenaline to make them as good as possible. Being in a ceaseless round of competitive activity can really take its toll.”

The irony is that it’s also bad for brands. Paull says with the emphasis on individual campaigns, long-term strategic thinking is relatively rare. “At the heart of this question is whether marketers are thinking in terms of brands or campaigns,” Harris says. “Are they thinking about the short-term return or the long-term consumer relationship? Both are relevant but I think sometimes a marketer could better use their time working with an already proven and trusted partner.”

There are two main reasons for this less-than-ideal situation. One, says Namiko Suzuki, head of marketing for the insurance company AXA, is that constant pitching is seen to minimise the risk of corruption and favouritism that can come with long-term relationships. Another is that clients lack experience given the fact that job rotations are almost as frequent as pitches in many Japanese companies.

“Pitching is the easiest way to make decisions because the [client] often doesn’t know anything,” Suzuki says. “He can compare the industry standard by having a number of examples at the same time. It makes the client feel safer having gone through a number of proposals. In a way it’s helpful, but it’s inefficient for the agencies.”

A bigger problem might be that the client “often doesn’t have a clear goal, doesn’t know what he’s looking for,” says Suzuki. That of course results in vague briefs, which add to the strain on agencies. Then there’s a good chance that the person calling the pitch might not actually be empowered to make a final decision. Suzuki says it’s common for agencies to expend up to 60 percent of their energy “figuring out politics” when taking part in a pitch to ascertain who in the company will actually decide to hire them.

The system may be inefficient, but marketers are often hesitant to question it for fear of upsetting an established protocol, Suzuki says. But she is optimistic things will change as the marketing industry opens up to a “more global way of doing things”. More than anything, it’s a question of empowerment through knowledge. “Things need to change but people are not educated to do so, so they don’t know how,” she says.

In the meantime, all agencies can do is choose their battles carefully. “We have to weigh up the opportunity in terms of creative, financial and potential growth return,” Harris says. “Some of the pitches we have been offered are really just not worth the investment of an already busy workforce so we have declined.”

He suggests the best solution for clients to avoid calling unnecessary pitches would be “to utilise a trusted partnership but ask for more than one potential solution in order to feel there is a sense of choice”.