Malaysia Airlines pitch called off – agencies get apology from CEO and compensation

Malaysia Airlines has called off a pitch that was announced in August last year to find new creative, media and social agencies. Those agencies that were involved in the pitch received a letter of apology from the airline’s chief executive officer and compensation.

The account will revert to the incumbents on the brand which include M&C Saatchi on creative, GroupM for media with Mindshare and m/Six, and IPG’s Reprise Digital on social. The mandate of these agencies has been extended to June this year.

The airline sent out a letter announcing that the pitch had been cancelled to the agencies involved and to ad industry body the Association of Accredited Advertising Agents of Malaysia (4As Malaysia).

The reasons cited were a change to Malaysia Airlines’ marketing strategy against the backdrop of a larger redevelopment of business plans. Malaysia Airlines Berhad group CEO Encik Izham Ismail personally wrote to every agency involved in the pitch, giving them an explanation and an apology.

Asked for his reactions to the cancellation, 4As Malaysia CEO Khairudin Rahim said: “I was disappointed and surprised but understand the reasons given. The pitch brief no longer applies due to the need for the airline to alter its marketing strategy.

“The airline’s dynamic and constant assessment of their market, their evolving customer preference and other key business benchmarks must have necessitated this decision.

“The need to change marketing strategy and consequently the customised marketing communications solutions is not exclusive to the airline industry.”

Rahim did consider the apology from the CEO an unusual and praiseworthy gesture and said: “To the best of my knowledge, this has never happened before in an aborted pitch situation.

“The bearer of any bad news affecting the losing agencies is usually a mid-level manager. Kudos and respect to Enick Izham Ismail for this exemplary effort.

“It demonstrates MAB’s recognition of the value of advertising agencies as a potent ally to help build reputation, customer preference and profitability through the use of properly practiced creativity.”

The pitching agencies which were members of the 4As stand to get a pitch disbursement, a payment from the advertiser to help offset some of the costs incurred.

Rahim said: “The disbursement amount is RM10,000 (US $2,400 approximately) per assignment, per 4As member agency invited.”

Asked if there was a concern about work presented in a pitch being used at a later date, and if there were safeguards protecting agencies against this practice, Rahim said: “Like you, I have heard of unsuccessful pitch ideas making their way into work produced by a different agency.

“To date, no agency, to the best of my knowledge, has taken up this discovery via legal action. It remains hearsay.

“At the pre-pitch stage, all advertisers need to sign an agreement with the 4As that makes it clear that the agency owns the intellectual property.

“The advertiser has no right to utilise or release the agency’s proposals, documents, concepts, ideas and all other intellectual property either directly or indirectly. Any violation will lead to necessary legal action.

“Furthermore, 4As member agencies feature the above equivalent IP ownership statement on all pitch documents or work retained by the advertiser’s evaluation panel.”


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