There are too many agencies in Singapore – and clients are exploiting them
The highly-competitive pitching process has transformed the client-agency relationship from a marriage to a hook-up and agencies have to start fighting back – argues Happy Marketer’s Prantik Mazumdar
For the last 60 years, the advertising industry has become so mired in the mass pitching process, it’s surprising clients aren’t choosing their agencies over Tinder these days.
There is more than enough literature available on why the pitch process is broken and must be fixed or even eradicated entirely given how expensive, unproductive, inefficient and ineffective it has become.
As someone who has been on the agency side for more than a decade, it is clear to me that there is now an oversupply of agencies in Singapore – and as a result it is now a buyer’s market to exploit.
However, agencies have nobody but themselves to blame for this; we have short-changed ourselves by cutting costs; we dish out ideas and intellectual property for free in return for the slim and elusive hope of winning that needle in a haystack of deal.
In Singapore, there are more than 200 active agencies, big and small, who are constantly on the hunt for new accounts. Hence when the government procurement portal GeBiz calls an open pitch, it’s not uncommon to find at 20 agencies vying for their business.
The eventual outcome? At best, one agency wins and most likely did so with a lower bid. Meanwhile, the other agencies lose hundreds of hours of productivity and up to US$60,000 in labour and costs.
Incidents when agencies are forced to pay to pitch and face unreasonable demands of ‘unlimited changes’ make matters even worse. As do ‘chemistry sessions’, which have often resulted in no new business awarded and a lot of time wasted.
Moreover, agencies frequently complain that clients have stolen their ideas and made them their own without payment, credit or acknowledgment. And then, as clients – or their procurement teams – prefer to sign a 12-month deal maximum, the whole circus soon begins again.
Prantik Mazumdar
That is why I dislike the hackneyed analogy that client-agency relationships are just like a marriage. The reality is that the market here is far more myopic, promiscuous and polygamous.
Procurement is not just a headache for agencies – clients suffer too. Many agencies maximise their chances of winning by bidding low and cleverly masking a lot of the basic deliverables as ‘optional items’ just to appease the procurement teams. Then, much to the marketing team’s horror, the client eventually has to pay through their nose to activate a number of additional, optional components in the contract. Not an ideal starting ground for any relationship.
Meanwhile, the client and their procurement team are not even aligned or incentivised to optimise for the same metric. We recently had a head of procurement request this: “I want double the offerings for one-third the price or else I will have to look out”. The client was apparently as shocked as we were.
While many of the above instances are from the open pitches on GeBIZ, the inefficiencies and ineffectiveness of the pitch process applies equally to most private dealings. Any sense of transparency is usually smoke-screened.
Yet while much of the blame lies with clients and procurement companies, agencies also need to wake up and own the problem.
We need to start ditching the hunger to throw everything at every brief that lands in the inbox. Alternative paths should always remain on the table. These include deepening your existing client relationships; building an ecosystem that incentivises client advocacy and referrals; and innovating and expanding your offerings to differentiate and make them compelling enough to attract more clients.
Essentially the way to succeed in this promiscuous minefield is to make the clients come to you and you alone. For seldom do you see other industries caught up in this draining process. Management consultancy firms have deep client relationships and put a price on their intellectual property. They certainly do not work for free.
And given that consultancy firms look set to be our most challenging competitors in the future, agencies cannot to wait for the world to change. We need to disrupt our own industry before someone else does. It’s time we ditched the itch to pitch once and for all.
Prantik Mazumdar is managing partner at digital marketing agency Happy Marketer
In terms of sheer number, i agree there is indeed a surplus of agencies in town.
ReplyHowever in terms of quality, I believe there really isn’t enough.
Currently, there are too many agencies offering generic services, led by scam creatives and a rotation of agency heads who parachute in and bug out as quickly.
There was a time when clients in Singapore knew who the go-to agencies were for specific categories.
Back then, everyone knew who the expert agency was for luxury advertising, car advertising, travel advertising, hospitality advertising, property advertising, banking advertising, recruitment, retail, etc.
Often, these agencies with deep category experience were differentiated by individual business directors and/or creative leads.
In those days, a pitch was a formality not a window shopping exercise.
Clients already knew who did the best work and knew who they wanted working for them even at a premium price.
And if the go-to agency said ‘No’ to the potential client (which they did), another agency would poach the business or creative lead and then get the business.
Today, such agencies with category expertise are a dying breed.
Instead we have generic agencies overpromising and underdelivering because they have agency heads who have no track record, creative leaders who got where they are via awards from scams and fake ads and any purported industry knowledge is quickly assembled by jack-of-all-trade planners who trawl the internet for case studies only after a pitch is called.
How can any agencies begin charging for their services if there is no quantifiable value on the table in the first place?
The man-hours put-in by the agency is not proof of value.
It’s just a cost. An agency’s cost.
Value is in the eye of the potential client.
And consultancies somehow do a better job because their remuneration is tied to specific KPIs and outcomes.
Pitching will not go away. Procurement is a hurdle, not a road block.
It’s up to agencies to be more pitch-smart about how they go about it.
Invest in the right talent.(Don’t hire scammers. Promote internally instead of inserting ‘play and play CEOs.) Develop category expertise ahead of the pitch. Prove it with the work. And win it, at a price that is not the lowest.
It can be done.
I have.
On many occasions.
we promise not to pitch….if you don’t.
ReplyThe ad game has started to eat itself and there is no turning back. Hiring cheap out of IN and PH to maintain margins at the expense of quality is an issue. And we need to chase every brief because if we don’t our exec team will ask about our rev pipeline – the real danger is that if some of these Hail Mary’s don’t land then retrenchment and closure beckons. 2018 is the year of survival of the fittest. What is baffling is that a load of people from SG are still swanning around Cannes which, as well as being tired and passe, is a luxury every agency can do without.
If you can – get your ass to the client side ASAP.
Reply@Good Point
Spot on and the only hope is that all the second hand car salesmen will be found out and exposed, but now more than ever perhaps there’s too much buzz-clap-trap for them to hide behind.
Our industry it seems is the only one not to recognize and champion the original thinkers and inventors, look at the way tech and science has enhanced chefs and made them even more respected, or the way online program platforms have evolved, more competition and technology here has only highlighted the need for truly original scripts and shows.
Where technology has enhanced other creative industries why is it that in ours its dumbed down the output. It would seem theres now more value in creating predictable reach than creating something of originality. Lets hope like hollywood the generic big boys and networks (studios) obsessed with trade press and looking in their own pants put themselves out of business.
Replyhow rich of him to say that, when happy marketeer is also a whore house.
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