Cost of the Pitch

Insights that may make you rethink the process

For this week’s insight piece, I’m shaking things up and sharing a study from ANA, the 4A's, and AP on the ‘Cost of Pitching.’

Often, we only think about the financial burden agencies shoulder during a pitch, but this study highlights the costs involved for both agencies and clients.

Here’s a link for you to download and review at your leisure. Don’t worry, it’s free to download.

I’ve highlighted a few key points below that caught my attention. I trust this information will be helpful in your approach to new business.

Heads up. My writing will be on pause for the next two weeks. I know many of your are taking a break to enjoy the last weeks of summer. And, I'll also be celebrating another trip around the sun 🎉. I’ll be back on September 14th.

Key Findings

Client Perspective

• Agency pitches cost clients about $400K, with variations depending on whether an incumbent participates.

• Cost/price was rated by a wide margin as the most important factor when selecting an agency. One assumption that can be made is that clients view agencies as commodities, selected based on the cost of their offerings.

• Clients select the incumbent agency two out of three times in a review. Statistically speaking, it’ may be a wise decision to sit out a review if the incumbent is participating.

• Clients noted that the biggest short-term benefit of holding an agency review is that a new agency will be highly motivated to deliver. The second benefit was cost savings/better pricing.

• Only 1 in 4 clients reported providing any compensation to an agency for work done during a pitch. It's amazing that clients often avoid paying for pitches but still expect to keep the intellectual property. I'm puzzled why our industry finds it acceptable to give away free work when other professional service providers don’t have this issue. For instance, an architect would never draw up plans for a building and simply hope to get picked to do the work.

Agency Perspective

• 1 in four agency incumbents decline to participate in a pitch. It’s safe to say they can see the writing on the wall.

• The cost to pitch a client ranges from $200K for a non-incumbent agency to $400K for the incumbent. The incumbent usually throws a lot more people at the account in an effort to retain it.

• Diversity was ranked LAST as one of the factors considered when selecting an agency. It's no wonder that agencies under-invest in DEI efforts, it's still not valued by their clients.

Key Takeaway

This study provides an overview of the complexities, costs, and considerations in the agency review process. It’s a great reminder to weigh the real value of a review against potential alternatives. I’m curious, how do these findings sync up with your experiences?