Thanks… Campaign UK On Advertising Agency New Business Trends
My brain perked up when I saw that Campaign UK was doing a podcast interview show about advertising agency new business, i.e., today’s business development environment and the good, bad and ugly of the client + agency search process.
Campaign’s podcast “Agency New-Business Trends & Super Bowl Ads” enlisted Greg Paull, principal of R3 Worldwide (…a global consultancy that offers marketers access to the expertise and services required to establish and administer effective multi-national agency engagements.) And Tracey Barber, global chief marketing officer of Havas Creative Group. They were joined by Campaign’s media editor Arvin Hickman to discuss agency new business trends. The Super Bowl discussion – meh.
I’ve taken bits of the interview, edited for brevity, and popped in my thoughts. Remember other than working closely with agencies on their business development plans, I wrote, just in case you missed it, The Levitan Pitch. Buy This Book. Win More Pitches.
More Pitches But Smaller and Smaller Accounts:
Greg: There were 58% more pitches this year, but only 9% more revenue. And I think that just sends the message to agencies that it’s becoming a fight for smaller and smaller pieces of an individual business. That’s a challenge for our agency’s work.
Marketers are increasingly looking at project-based assignments and that’s always a challenge for agencies that are quite used to this traditional AOR structure. So, they’re having to pivot a little bit in order to be able to cope with the way clients want to buy their services.
Peter’s Take: Nothing new or surprising here. The client-to-agency relationship pivot started to happen way back in the late 1990’s when we began to see the shift from the 15% media commission to fee based payments. One of my mega clients fired Saatchi one day within moments of a new marketing director parachuting in. He was both an asshole (the client’s mega airline was growing faster that its competitors and we had just won two EFFIE’s for strategic brilliance and he fired us at the ceremony’s dinner table). He then gave the $60 million business to Ogilvy because they were going to charge ½ of our the AOR commission.
OK, enough bitching. Yes, clients are wanting project-based relationships. It is then up to agency managment to leverage that project into more work. Easier said than done but if you give that assignment to a junior account manager or producer, worse untrained folks, I am not sure how you effectively grow that client. A Duh coming: growing an existing account is way more efficient than running after advertising agency new business from strangers.
More Projects Less AOR
Arvin: Can I just ask in terms of that trend of it becoming a bit more project-based? Are you noticing that a bit more on the Creative side versus the Media side or is that across the board?
Greg: Yeah. It’s been more on Creative than Media. And in fact, if you looked at the top 10 wins for last year, nine of them were global for Media. Only four of them are global for Creative, and that’s been a system trend that… Creative tends to be more piecemeal, clients are always looking for the best creativity they can and as a result, they’re more and more looking at project-based work.
Peter: Even if you are a ‘creative’ agency, make sure that the client loves your media and strategic planning. Make it an integral element of your deliverable even if you have to team up with a media specialist. ‘Creative’ is way too subjective.
Plus: It is easier to fire an artist than a scientist.
Just Say No To That Pitch
Arvin: Now one agency that many would argue isn’t having this whole dissatisfaction problem would be Havas Creative. Tracy had a lot of new business wins in the past year. What was the recipe for your success do you think?
Tracy: I think pitching is an interesting process, but it’s also about passion and determination. And I think what we have focused on very, very clearly is about being the best at new business. And that is about creativity and it’s about understanding what the right pitches are to accept and which are the ones to decline.
So, I measure declines as much as I measure successes and acceptances. And because I think what’s so important is about getting the right partnership.
Peter: In my book’s chapter “To Pitch or Not to Pitch”, I write about declining to pitch the wrong account and that the desire to pitch for any brand that asks you to participate must be managed down. From my book’s page 19:
Just Say No!
Before you embark on a new pitch, you should be asking yourself one extremely important question…
“Should we be pitching this account?”
I know what you are thinking… Levitan’s kidding right? We’ve made it through the RFI and RFP stages, and now he wants us to ask if we should even be going to the finals?
It’s still ok to say “no”, and now is the time to take a deep breath and review a go-no-go decision. You are about to spend a great deal of time and money. Are you sure that you should go through the next step? Are your colleague’s groans getting louder? Looking in any way ambivalent about the pitch will not help your pitch team feel good about charging into it. Passionless pitches don’t win.
Pitch or not is usually one of the most difficult decisions agency management has to make. There is a good chance that you think that you’ve already answered this question if you participated in an RFP that led to your selection as a short list candidate. I believe that even if you’ve performed a sound decision making process, now is the time to stop to determine if this potentially expensive pitch is worth the time, effort, and human and cash cost.
Some agencies view pitching as a numbers game. Swing at more pitches, and you’ll get hits. Unfortunately, whiffing will drive down your batting average and the agency’s profitability. And, eat at its soul.
Really, just stop for a second and think this one through. This is the time to dig deep, and ask yourself if you actually have a good chance of winning the account and… if this is the kind of client you really want. And, even ask: Is this client qualified to be your client?
“Advertising” Is Way More Than Advertising
Arvin: Another question for both of you. When we think about what’s happening in your business, I’m struck that there’s a lot going on which is beyond Creative and Media. And I wondered how do you track that?
Tracy: And I think that’s a really interesting point because if I think about our business over the last 18 months, we’ve launched two new verticals in terms of capabilities. The Havas CX network and also a Havas Studios proposition. And if I look at the types of businesses and clients we are winning, there is increasingly that CX digital (customer experience) piece, which has been, again, it has been phenomenal in terms of the success and the wins that we’ve achieved through that network… but also the consultancy.
So management consultancy, business transformation, thinking differently about the way that businesses require services from the broader agency capabilities has been key to what we do. And Gate One, which is one of our agencies here in the UK, has been our fastest growing business in 2021.
Peter: Yes! The big agencies are developing more and more specialty sub-brands and consultancies. Gate One describes itself as a: Digital and business transformation consultancy. Looks like clients want this specialty – though it would be nice to find a way to NOT say the words — business transformation — ever again..
And, here is a paradox for a medium and smaller agency: clients want project work. But they also want an agency that can strategically manage the 360-degree playing field. An example: a D-To-C client wants your agency to drive customers to the retail experience (using advertising and social skills). Then they might want you to build an online sales website. Then they want you to make sure you know how to manage CRO (conversion rate optimization) and then they want CRM (customer relationship management). Whew. If you can’t provide a decent all-a-in-one service then you will have to live with that singular project. Not that an expert in one marketing area can’t make a decent living just being a go-to expert.
The Advertising Agency New Business Pitch Process Is Broken
Arvin: I just want to focus a little bit more on the pitch process itself. We’ve run some articles recently where this has been challenged. Some have said that it’s broken. Others have said it’s just in need of a bit of reform. I wanted to get both of your takes on this. Greg, what do you think about the pitching process as it stands and where do you see it evolving in the future?
Greg: Well, I have to go to Winston Churchill, who said that democracy is the worst possible form of government apart from all the others. And I feel that way with the pitch process too. I think there’s lots of areas for improvement, but it’s the reality we have right now.
We’ve run a few pitches where the final round of the pitch is a chemistry session because in the end, you’re hiring people. You can already see from an agency’s case studies their capabilities. The fact that they can spend two weeks or three weeks running off to make a campaign example for you, shouldn’t be the decision-making process. So it does need to be relooked at for both client and agency, and I think we’re all open to ideas.
Peter: The advertising agency new business pitch process has been broken for years. I’ll be kind. Clients do not always know what they are looking for. Clients do not know how to judge a winner from a set of similar agencies. Clients do not know how to run an efficient search. Most clients have little experience in choosing an agency. That’s why I was always rather happy when a client used a search consultant like an R3. An experienced pro that is listed in my list of search consultants: 34 Advertising Agency Search Consultants.
Now, could your agency actually help that cherished new client prospect in their search? Yes, do the RFP dance. But also find a way to help their process. I have ideas here that will help make you stand out.
Arvin: Tracy, let’s get your feedback on this. I know a lot of agencies leaders that I speak to complain about some of the processes, how drawn out they are and how resource-intensive they are. Some have suggested that it’s causing their teams to burn out. It’s causing unnecessary stress. And in severe cases, it’s causing people to actually leave the industry. What is your view on the process as it is, and where do you see areas where it could be improved?
Tracy: Winning a pitch with a burnt-out team who then leave the industry, it’s that vicious cycle and nobody wins. So I think it is about looking at the intermediaries, it’s about thinking about the role of procurement. And it’s making sure that we as agencies are ruthless about protecting the health and wellbeing of our staff.
Greg: Look, I totally agree with what she said. I think that the biggest trend for 2022 is going to be around D&I (diversity and inclusion). I think it’s something that a lot of companies have taken internally as a critical factor.
We now have it as at least 10 or 15% of every pitch we run in terms of this criteria. And I think just the whole aspect of how are you going to treat diversity, et cetera, is going to be very critical going forward to show that agencies actually can make a difference.
Peter: If there has been any one thing that the advertising universe has been lame about it is D&I. Havas, at least, has created All In, a, as they say: “Established in 2018, Havas All In is our global Diversity, Equity, and Inclusion (DEI) programme, and one of the many ways we are building and investing in our culture. It’s an innovative approach because it focuses on engaging all levels of our organisation, without a typical top-down approach.” Good news is that the agency has something to point to and talk about. Is All In working at D&I? That’s another story.
The 24 Hour New Business Pitch Alternative – A Sprint Not A Marathon
Gregg: One other thing on a pitch, we did something really cool last year, we decided to give an agency for a global pitch 24 hours to put their submission in which sounds absolutely terrible.
We briefed them, they knew it was coming. Four agencies, each had 24 hours each. But instead of spending 24 days of resources running around the world to get work done, they did it in 24 hours. And it gave the client a good insight into what this team as a global team can do in a hurry. So I think just being creative with the pitch process to reduce the agency time and pressure is going to be helpful.
Peter: Bravo to R3. Why not an advertising agency new business sprint rather than the on and on weeks and weeks of pitching. Let’s face it, clients are always asking for overnighy brilliance from their existling agencies. So, why not ask the agency pitching for pitch brilliance overnight? This process demonstrates agency listening, expertise, marketing skills across platforms, strategic thinking and creativity (in both the work and pitch approach.) Plus, the agency staff only needs to take Adderall one night vs. weeks of pill popping and coffee overdosing.
Thank You Campaign & My Very own Podcast About Pitching
A good conversation about advertising agency new business that should spark some thinking from tiny to mega agencies.
Having run millions of pitches, I can say that the process, while a must, is a strange way to choose an agency. The process has been broken for years. I have, in my very very small way, tried to help it work better.
Example: Here is an Advertising Stories interview I did with the great agency search consultant Lisa Colontuono of AAR Partners – How To Win A Virtual Advertising Presentation.
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