Marketers waste ‘hundreds of thousands of pounds’ by inviting creative and design agencies to pitch for business they have no intention of awarding them – or so alleges design shop Beetlenut, sited in the leafy London suburb of Pinner Village.
In an online survey, over 250 decision-makers from advertisers as diverse as the BBC, BT, Deutsche Bank, Jaguar, KPMG, Prudential and Selfridges volunteered information on the way in which they commission creative work.
The report reveals that 40% of such companies put every creative project out to tender with nearly half the decisions based solely on cost. A mere 19% said the creative concept was the key factor in their decision-making; while one in four openly admitted that the business was awarded to their favourite supplier irrespective of the tender process. [Although this was doubtless invoked when it came to negotiating the successful agency down to the lowest price.]
According to Beetlenut managing director Michael Hollinson, agencies are investing an average of £10,000 on the larger pitches. “To ask ten agencies to pitch, a [client] company is draining £100,000 pounds from the industry and yet nearly half of all projects are valued at less than this,” he protests.
That this is not simply a howl from a single source was confirmed by the Design Business Association, which argues that speculative pitching is detrimental to the industry.
The DBA code of conduct holds that no more than four shops should participate in a speculative beauty parade. The Beetlenut report, however, reveals that one third of client companies invite between five and ten agencies to slug it out for their business.
A fairer system, believes Hollinson, would be for clients to conduct an annual marketplace review to find out who is new and which shops are recommended by other marketers. As a second stage, six agencies should be invited to submit credentials, from which a shortlist of two would be selected to pitch against the incumbent.
Data sourced from: mad.co.uk and Beetlenut website; additional content by WARC staff