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In-depth: Offering token money as pitch fee is not the solution to the pitching menace, say top leaders

Some countries have made it mandatory for brands to offer a pitch fee to agencies. However, the implementation of such regulations in India is a difficult task, according to the leaders

It’s no secret that the advertising pitching process, where brands call in agencies to present their ideas for a retainer partnership, is often long and tedious. Agencies and their employees put in all their hard work and time to prepare for a pitch, and more often than not it ends with them not being compensated for it.

Many times agencies also have to face issues like ghosting from brands or even getting their ideas stolen. Hence, many countries have made it mandatory for brands to offer a pitch fee to advertisers.

However, that may not be the solution to the pitching menace in India, as per industry leaders. 

A pitch fee is still not the norm in India 

According to leaders, one of the biggest issues is that most brands don’t offer a pitch fee to advertisers and even if they do, it is very minimal. 

Rohit Ohri

Rohit Ohri, Chairman and CEO of FCB Group India, said, “99% of the clients do not give a pitch fee and the 1% of the agencies that do demand a pitch fee, it is so nominal that it's like a token to see the seriousness of the client to evaluate the pitch.” 

“Many of these pitches remain inconclusive or the clients change briefs, client teams change, etc and so many reasons, that the pitch doesn’t culminate in anything and that is the real issue.”

“Agencies put in a lot of time and effort into the pitch only for no result in the end. Often clients call for pitches just to clear their own minds, which is not the right way to go about it. Just because it’s easy to call a pitch, get ideas, and then decide on your own time if you want to go ahead is not right,” he stated. 

Agencies are finding different ways to tackle this age-old menace. 

Kapil Arora

Kapil Arora, Co-Chairman and CEO of 82.5, said, “Although some agencies ask for it (pitch fee), it’s almost to figure out if the client is serious about the business or not. We have modified our approach; we try to meet the client and try to have informed conversations to ascertain if our minds meet. Only if there is a big pitch do we try to do a pitch and even there we try and align a broad aspect of budgets and mostly the mature clients agree with it.”

He further said, “Our work already shows what we are capable of, and having an informed conversation tells you whether there's a meeting of minds. Our conversion rates through this are pretty strong.  You don’t earn anything from a pitch fee, we charge a pitch fee just to understand if the other party is serious about it.”

Similarly, Ohri stated that they do a thorough evaluation of the client's history and reputation. “If we are not satisfied, we turn down the pitches. Also, if it's not a sizable opportunity for us we turn it down.” 

Subhash Kamath

Subhash Kamath, Brand Consultant and former CEO of BBH and Publicis Worldwide, said, “In a pitch, you are actually presenting ideas and strategies to clients. How much does that cost and who does it belong to after that? That needs to get resolved first. Why would an agency give away all its ideas for such a nominal amount?” 

He further said professional clients do save some trouble for agencies by being clear in their briefs. “Professional clients have a very structured pitch process, and they are very clear about what they want in the brief. However, many clients don’t even have a proper brief and we have to struggle to get it from them.” 

Can regulation solve the issue? 

Some countries have made it mandatory for brands to offer a pitch fee to agencies. However, the implementation of such regulations in India is a difficult task, according to the leaders. They say the only way to tackle the issue is to get agencies to agree to not work for pitches without a fee. However, it seems impossible given the level of competition in the industry. 

Arora said, “I think it's tactically very difficult to enforce regulation here because of the long tail of supply in advertising. It's not just the top 150 agencies anymore, there are small shops, creators etc. There is always someone who will be desperate enough to do it without a fee. Even if there is a regulation, how will they enforce it?” 

Arora further added that one way to minimise the problem is to have a forum where brands that do engage in malpractices can be named and blacklisted by the industry. 

Ohri believes that there is no definite solution to this unless all the agencies, including the small independent ones, come together and make it a rule to not accept a pitch call without a fee. 

He added, “The issue is about who will be the regulator because many creative agencies are willing to come into a pitch without a pitch fee. This is something that we at AAAI have also been discussing - is there a way we can protect the interest of agencies there are too many diverse opinions on this. Many agencies have global mandates and those mandates are always pre-decided between the network agency and the client. So you can’t ask for a pitch fee there. It’s a complicated scenario.”

Kamath on the other hand said agencies in India are not united for such a regulation to be implemented. “Our industry is very fragmented. There have been attempts earlier of raising the pitch fee issue but many agencies go back on their words. There is no unity in the industry.”

“A few years ago when the issue was raised I was one of the first persons in the industry to agree to not work without a fee. However, two other agencies agreed to do it directly and the clients laughed at my face,” he stated.

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