Advertising agencies have always had a love/hate relationship with new business pitches. We all love to win new business. But we hate the process of a pitch. A big (or even a small) pitch can tie up agency personnel for weeks, draining attention and resources from existing clients. When you factor in doing research and hiring freelance creative teams, a pitch can be very expensive. Plus, you can never be totally sure that everything about the pitch is on the up and up. Is the playing field level? Or does one agency have an inside track with the client because of a previous relationship? A few agencies avoid the problem by refusing to take part in speculative pitches all together.
There is one other contentious issue about pitches: who owns the ideas that are presented, the agency or the client? One company has answered that question in its search for a new corporate image campaign. Prudential Financial is paying each of the three finalists up to $300,000 for the ideas presented. Prudential will own the ideas. That raises an interesting question: might they actually produce the idea from one agency, but give the account to one of the other agencies? Or hire none of the three and produce the work on their own? It will be interesting to see how this story plays out and how it might influence the course of future pitches. Stay tuned.
Related Article:
“Prudential Eyes 2 Agencies” – Adweek
Good points and even better questions. Working with agencies, we’re tasked with qualifying opportunities as throughly as possible to avoid cattle calls, for example. Will be interesting to see where this leads.
Lee
http://www.agencynewbusiness.com
I guess the future of the advertising business will be organized around the control, ownership and management of IP (”Intellectual Property’).
If we look within this frame of mind (and within this legal context), the
‘speculative campaign’ would remain the ownership of the ‘Agency’
(lets skipp the question of the ‘authors’_ generally independant free lances) and imagine that the pitch (and creative elements of the campaign) are copyrighted by the Agency (copyright ownership).
What the client pays for is the licence to use the copyright (within time and territory limits) and not the ownership of the copyright.
If the ”Client” (prospect) pays for the pitch it can be structured as ”shared copyright ownership’, but the deal can also be structured (as it it done in some sections of the content industries) as an advance against the use of the licence (and not against the ownership) etc.
Other arrangements can be imagined along the lines of some deals used in the film or in the music industry (pick up deals) or in the finance industry (Buyback options etc) because their is now a legal instrument
(the IP) to play with.
Many opportunities lie in these questions also for another reason.
Because…. they have an impact TAX WISE (in a number of countries ‘licence companies’ do not pay taxes) and also ‘BALANCE SHEET’ wise… although I am not suggesting to go as far as ENRON !
Well, but, may be after all, etc etc