The agency pitch process is broken and expensive, yet it persists despite some calls to eliminate the practice entirely. Recognizing that reality, the Association of National Advertisers and the American Association of Advertising Agencies have issued a set of “Positive Pitch Principles” for both marketers and agencies to follow.
“For a number of years, we’ve heard about some [grievances with] the pitch process,” said Greg Wright, senior vice president, brand and media with the ANA, and one of the authors of the white paper. “There are all these stories in the trade press around bad pitches, bad business principles and doing things like ghosting agencies, and so on.”
These issues have become more common as agency-of-record relationships decline and project work, particularly in digital marketing, increases. The ANA is a trade organization representing brand marketers while the 4As represents ad agencies, highlighting industry unity in wanting to address problems with pitching.
“I think as digital became broader and more the go-to in our industry, we started getting into this kind of transactional approach toward agency-client relationships,” Wright said.
There are other factors as well, such as the CMOs’ decreasing average tenure, the correlated desire to make big changes amid such turnover and an overall lack of experience among those running and participating in pitches.
“I’ll use a term that I’ve seen in the press now a couple of times: the ‘juniorfication’ of decision-makers,” said Matt Kassindor, senior vice president business intelligence and insight at the 4As. “A lot of middle management has been removed … and the junior executives have moved up to fill those holes without all of the training and mentoring that went on in the past.”
As a result, many review participants don’t have the experience their predecessors might have had in running a pitch and may not fully understand what it entails, Kassindor said. That includes articulating the business problem, identifying a budget, handling proprietary ideas and data and even knowing why a client might be searching for a new agency in the first place.
In addition, many of these participants are already stretched thin and may not have the time or ability to focus on the details a good review requires.
“For a lot of the folks on the client side, this is not their full-time job,” Wright said. “All of this is happening in the extra time that they have at the end of the day, or whenever they can fit it into their schedules, and because of that, it creates some additional complexity.”
A new pitching etiquette
Running and participating in a review is expensive for both parties. In a previous report from 2023, the ANA and 4As found that the average out-of-pocket costs for marketers conducting an agency search and review was $408,500. Incumbent agencies spent nearly the same defending their business, at $406,092. All told, the cost of the agency review process, assuming three pitching agencies, was upward of $1 million.
With that much money on the line, the 4As and ANA determined it was in the best interest of their respective members to lay out some recommendations that can make the review and pitch process, if not enjoyable, at least respectful, and perhaps yielding a lasting relationship, Kassindor said.
“These principles aren’t how to run a pitch. These principles are about how the parties involved treat each other,” Kassindor said. “It’s really designed to drive a more respectful process, and to have the process reflect the way that both parties would want the [ensuing] relationship to be.”
The report’s 10 recommendations offer guidance on everything from the number of review contenders and timelines to compensation and contract negotiation. By and large, they center around two core principles: respect and transparency.
The recommendations begin with all parties making a “mutual commitment to transparency” by being upfront on goals, key performance indicators, budget, team structures and availability. One advises to “define the role and value of speculative work” by providing clear expectations on scope, compensation and ownership of intellectual property. Another suggests to “compensate for the pitch labor and ideas” as a good-faith gesture for the cost of participating.
“You can look at these principles and very easily say, ‘A lot of these are really just good business practices,” Wright said.
One could also look at these guidelines and say they’re good practices for relationships, as some of the recommendations wouldn’t be out of place as dating advice: “Carefully consider the agencies invited to participate,” “Stop the pitch once a decision has been made” or “Feedback is a gift,” to name a few.
That makes sense. After all, every agency review is about finding the right partner for long-term success.
“You’re not necessarily solving for this afternoon,” Kassindor said. “You’re trying to get a partner who is going to be aligned with your vision and aligned with the way you want to work.”
