Pitch imperfect: Adland struggling to balance hunt for business with sustainable workloads

At a recent pitch for a creative agency of record for a multinational consumer goods brand in Southeast Asia, over 100 agencies threw their proverbial hats in the ring for a lucrative, but hotly contested business. The board had not changed its creative shop for a few years, and with the pandemic fog lifting, it wanted a fresh perspective on how to rejig its brand.

The pitch, conducted in early 2022, eventually saw agencies given barely 15 minutes to make their case, and many opted out, disgruntled by the mammoth effort required to put together the pitch and the chances of a disproportionately poor result. For agencies, this process was a frazzling two-day saga that left many shops dissatisfied with the pitch process and looking for a more holistic way to pitch for new business.

For much of the past couple of years, especially through the pandemic, agencies have been rethinking the way they prospect for new business. While agencies have traditionally been used to aggressively chase down new business opportunities, fierce pushback from talent—aided by movements such as the 'Great Resignation'—have compelled agencies to rethink their stance.

In addition, agency leaders have had to balance their priorities through the pandemic. First they had to save their businesses from sinking through the worst of Covid, and as business sharply bounced back, they had to balance their people’s time as they raced to keep pace with the resurgence.

The cost conundrum 

More agency heads are now realising the financial futility of a hell-for-leather chase for business, with the extra hours involved, compounded by returning overheads such as travel, pushing many of them to rethink their plans. There still has been a lot of furious pitching happening, but contract sizes are reducing, and project work is taking priority. Consider this data point from R3: most agencies are fighting over smaller projects. There were 53.5% more pitches in 2021 than the previous year, but only 9% more revenue. 

The push for more sustainable pitching in Asia Pacific is hamstrung by not having industry-wide efforts such as the Pitch Positive Pledge in the UK, which aims to make the whole process more viable, and has 70 agencies signed up in support. In APAC, agency leaders complain it is harder to follow suit, because clients aren’t aware (or just don’t care) to support a more positive pitching environment.

Joris Knetsch, Media Monks

Cost may be a big factor driving agencies in APAC to rethink the pitching process. Joris Knetsch, managing director, Southeast Asia at MediaMonks, believes that the current cost of pitching is prohibitive. If you estimate that each participating agency puts in around 150 hours, against an average commercial rate of SG$175 per hour, you end up at an amount of SG$ 26,250 per pitch.

All in, this would be SG$ 2.5 million worth of commercial hours spent, solely on the agency side of the business. “Pitching is hard work, both for an agency as well as a brand because you would obviously have to evaluate an enormous amount of work,” he argues.

Market is shifting 

As agencies balance the push for new business with the need to keep teams well and costs under control, they also need to reckon with the market shifting under their feet, says Shufen Goh, co-founder of R3.

“The economy is in flux with inflation, the threat of recession, and challenges in the supply chain,” she says. “The business outlook is not good enough for anyone to take a backseat. Agencies are facing a highly competitive set of peers, as well as emerging less traditional players, for clients and for talent.”

These threats add to the threat from CMOs and brand leaders to call for a re-pitch when they feel creative, media or social ideas are going stale. While Knetsch of MediaMonks think this re-pitch fetish is overrated, others admit it continues to be a business reality that agencies are hoping to slowly change.

James Smyllie, Initiative

James Smyllie, the APAC president of media agency Initiative, argues that nobody benefits from a ‘race to the bottom’ with fees and payment terms in a pitch situation. “We like to focus on the value we can bring by maintaining a happy, healthy, and motivated workforce,” he explains. “If a new prospect does not align with any of the above criteria then they will likely not be a good long-term partner for Initiative, and we choose not to pitch.”

Different approaches 

The challenge here in APAC is not everyone sings from the same sheet.  Agencies that are known to be aggressive with pitching don’t yet plan to follow suit.

Mehak Jaini, national strategy head, 22feet Tribal Worldwide, DDB Mudra Group in India contends that the agency network has always had a “strong culture” of both pitching and winning. “We see it as a source of growth, that helps us build deeper relationships with our existing clients and helps us push our product further,” she contends. “And, with clients shifting from retainer models to projects, volume and effort for project-led opportunities have increased.”

Mehak Jaini, 22feet Tribal Worldwide, DDB Mudra Group

Jaini is hardly the only agency leader sticking to their guns. Shaun Tay, co-founder of FCB Shout in Malaysia, says the number of pitches on offer increased as businesses recovered and agencies were slammed all year long chasing these opportunities. “The opportunities are there for hungry agencies like ours but we’re also being more mindful about the clients we choose to go in for,” he claims.

Shaun Tay, FCB Shout

Agencies’ hands may be forced by marketing leaders who are keen to bring in fresh creative and media ideas to the table more often. This can be counter-productive to the idea of building a sustainable pitching model, if agencies need to keep going back to the drawing board. 

“A strong client-agency relationship leads to better work: it takes time to understand the exact position of a brand, and it takes time for a brand to better understand the specialties of the agency partner and the best work done for long-term clients,” says Knetsch of MediaMonks. “This leads to better ideas and less re-work and tinkering to come up with something that actually works for the brand, and hence, lower costs and more efficiencies.”

Agencies will need to take a call on balancing these factors and building out a sustainable pitching model for their teams. Smaller agencies which have aggressively chased business early on will need to take a call if they’re chasing new business with the same fervour or be more measured with their approach.

The winding sustainable pitching route  

“When we were a new agency, we’d get excited by every prospect,” admits Anish Daryani, president director of M&C Saatchi Indonesia. “We were ambitious, and we wanted to win every pitch. We did win most of them, but we lost some good talent who couldn’t take the pressure.” As the shop has grown and matured, leaders have found a better sense of balance.

Anish Daryani, M&C Saatchi

Goh of R3 says agencies should consider three factors to make pitching efforts more sustainable. First, agencies must measure the amount of time and knowledge being invested in pitches. Only by quantifying the work being put in the process, can informed decisions be made about the value of participating in a review, she contends. The other two factors are around culture and process: whether a potential client treats a pitch match with their overall ethos and finally, agencies need to play to their strengths and pick pitches that match them.

Across the board, agencies appear to be tweaking the way they approach pitches—to be more sustainable. Smyllie of Initiative explains that for his shop, it is critical to match a potential client’s core values with the agency’s philosophy around brands and cultural velocity. The agency needs to balance providing opportunities for its people by winning new business, with having the capacity to manage this extra work while handling work-life balance of its workforce.

Away from the core business win itself, brands need to be clear with communication rather than blindside agencies by pulling budgets or picking a partner without disclosing the development to others involved. They also need to be able to offer a succinct brief to clearly set out goal posts for the contract. The ability to integrate sustainable production into a pitch and plan should also be a factor.

Thinning out the crowd 

Agency leaders also contend that the scattershot approach of inviting dozens of agencies to pitch may be unviable, even for the largest contracts. Knetsch of Media Monks suggests limiting the number of agencies by through pre-selection, either through an RFI process or based on creds presentations. Other options include chemistry sessions, trial and test projects, or even 'speed dating' by visiting the agency’s offices.

Tay of FCB Shout says that for his agency's foremost consideration is the type of client calling for the pitch. “The clients that we find attractive do not necessarily have to be big payers nor do they need to be on glamourous categories,” he adds. ”Chemistry and shared ambition is just as important for us.”

He and other leaders in APAC agencies say declining to do business is almost as important as piecing together a winning pitch.  “We’re big advocates of saying ‘no’ should the terms of pitch or the conditions for working for the brand be something we’re not comfortable with,” he adds. “Good agency leaders should always know when to pull out.”

Meanwhile, Daryani of M&C Saatchi says his agency tends to pitch for businesses that have a combination of “fun, fame and fortune.” The shop doesn’t pitch for businesses that are prone to switching their agencies often. And given the agency's relative small size, he has decided to focus on retainer contracts, rather than a growing number of smaller-value and shorter-term projects, in order to be more sustainable. “The effort is nearly the same, so we’d rather conserve our resources and energies for businesses that are serious about building long-term partnerships,” says Daryani.

Jani of 22Feet Tribal says the agency likes to not just make the process of pitching more sustainable, but also make sure the agency pitches less often. The shop looks for new business opportunities to open additional organic opportunities in the future. Sustainable pitching in this agency's case is building out well-oiled machinery around continuously gaining more new business on the back of relationships and quality of work and eventually reducing the volume of actual pitches.

At the end of the day, agencies need to make fundamental changes in the way they do business, if pitching—and their whole business— is to become sustainable. “The crippling fear around declining a pitch that haunts most agencies must die,” she says. “Agencies should be more concerned with a culture value fit… the kind of work a client does and being comfortable about the investment opportunity beforehand.”