Head to Head: Should brands pay agencies to pitch?

In Mumbrella's Head to Head series, we invites the industry's PR professionals to debate the industry's biggest issues. This week, the founder of The HumbleBrag, Lucy von Sturmer goes head to head with David Platter, managing director of Dave Platter Pty Ltd public relations on whether brands should pay agencies to pitch for their business.

July 31, 2018 8:15

Author: Abigail Dawson

There is a huge debate in the PR industry, which most commonly lies between brands and agencies, around whether or not brands should be paying agencies for the work involved in pitching for their business.

The founder of The HumbleBrag, Lucy von Sturmer argues that transparency is critical in a pitching process and the days where agencies don’t pitch for a fee are well and truly over.

On the other hand, David Platter says paying a pitch fee is unrealistic and it isn’t appropriate because the budget that corporate teams are given for their PR spend is usually too small.

YES: Lucy von Sturmer, founder of The HumbleBrag:

“I’ve worked on both sides; as a communications manager for a major brand and now running my own consultancy.

“As a client, I’ve asked agencies to pitch. Once, when the underdog delivered an amazing concept, we still went with the agency that had a stronger reputation. At the end of the day, it was their client roster and previous work that informed our decision. It was during this time I realised how unfair the process is; I would never ask an agency to pitch in this way again.

“As a consultant, one experience comes to mind in which a potential client approached me upon a recommendation. Following many meetings, in which I learned all about their business and educated them on the value of PR, I was told I didn’t win the pitch. I simply had no idea I was pitching against others, and in this case transparency regarding the process would have been valuable.

“Speaking with one of my key clients, Independent Creative Agency HarrimanSteel, confirms that the days of asking many agencies to spend endless nights and days pitching are gone. Managing Director Leah Forsyth explains:

“We protect our ideas by selling our approach, beliefs and understanding of a client’s objectives and ambition. We also have two decades of case studies which demonstrate our craft and impact. We see the next step in a new relationship as responding to a clients’ brief through a paid pitch. As an independent agency, a pitch can take up to 40% of our resources, so we’ve decided stick to our guns on this and our clients respect that.”

No: David Platter, managing director of Dave Platter Pty Ltd public relations:

“Life’s a pitch, and then you die.

“But when it comes to PR agencies pitching for new business, corporates should not pay a pitch fee. On the agency side I never asked for such a fee and now, on the corporate side, I have never offered one.

“Let’s face it. Pitch fees aren’t even standard practice in the advertising business, even though ad agencies invest more than US$200,000 in each pitch —according to the ISBA and IPA. Do they get reimbursed? Seldom.

“Even if an ad agency does receive a commitment fee, it hardly ever covers their full costs. I don’t know of any data on how much PR firms spend on a pitch, but my years of experience (too many years of experience) tell me the amount is much lower.

“Some publicists would really rather be in advertising, but that is no reason to adopt an inappropriate concept from that industry — especially when it isn’t even fully embraced in advertising itself and fails to fit the reality of our own profession.

“Yes, the pitch process can be rigorous, time-consuming, and expensive. Some brands might steal your ideas and implement them in-house or with another agency. Someone’s procurement department might run a fake pitch process to get a sense of competitive pricing. Or the clients might already know who they want to hire and just be going through the motions to satisfy internal procurement rules.

“There are many things in life for which I would like to be paid. Pitching new business is one of them. But I don’t think it’s appropriate or realistic for agencies to expect or for corporates to offer that. The public relations budget is usually too small and the number of competing agencies too large for pitch fees to be practical.

“This whole debate begs the question of why you are pitching at all. If the potential client cannot give you a clear brief or reassure you that no more than three to five agencies are participating, you would be well advised to skip it.

“Yes, sometimes pitching is unavoidable. But PR pros should spend time and effort every week of the year building a reputation and relationships with key potential clients. When the time comes for that client to find a new PR agency, you don’t want to be a stranger in their conference room.”

• As told to Abigail Dawson. If you’re a senior PR professional who would like to take part in a future Head to Head, please email abigail@mumbrella.com.au

Ref: mumbrella.com.au