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


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