edition 75 june 25, 2007

to pitch or not to pitch?

    

There have been a number of controversial pitches this year (most run by the advertisers themselves or their procurement department and none of which P3 has been involved in) and this is why we have taken the time to look at some of the issues concerning reviewing the agency roster.

Having looked at the cost of pitching in previous editions of P3 e-news, this edition we are looking at the reasons to pitch versus the reasons you should not pitch.

- why pitch? why not?
- P3Sydney has a new office
- advertising, marketing & media summit
- new brochure for P3Media

why pitch? why not?

Undertaking an agency review or "pitch" should only be done for the following reasons:

1. You want to appoint an agency provider for the first time. It may be a new business, new brand or growth in an existing business that now requires a specific external resource such as a media, direct marketing or advertising agency.

2. If the current relationship with the agency is damaged and beyond repair, in which case the incumbent should not be asked to pitch as it is simply a waste of everyone's time.

3. If there is a regulatory or corporate governance requirement to go to market on regular intervals. However, if this is driven by cost concerns there are much more cost effective ways to determine how the current remuneration compares to the market, such as benchmarking, instead of the long and labour intensive pitch process.

4. If the company or business or marketing strategy is under going major directional changes and there is a requirement to expand or change the mix of services being supplied by your current providers.

5. To rationalise large numbers of like suppliers to achieve economies of scale and assist in supplier management. In this case only existing suppliers on the panel would be asked to participate.

But many people use the review or pitch process for a number of other reasons, involving higher risk and higher costs.

1. Facilitate fee negotiations - While a competitive environment provides the company with an advantage, the cost and disruption to the existing process and relationship almost never warrants this strategy. There are some advertisers known to change agencies on a regular basis to reduce their costs, but the false economy they are following does not account for the wasted resources consumed each time.

2. Wanting to test your incumbent against the market - The danger of this strategy is that while it allows the advertiser to directly compare the incumbent to others in the market, it can have the effect of damaging the existing relationship over time. Also, because of an imperfection in the review process an advertiser may make a decision to change that they may later regret.

3. To engage a pre-selected preferred supplier - This is deceptive conduct that simply wastes the time and resources of all participants. If there is a clearly preferred supplier, then they should be appointed through a due diligence process, but not under the guise of a fraudulent tender process.

4. Because the love is gone - A common reason advertisers want to change agencies is that the relationship has changed. This is where business and personal relationship counselling collide. When the relationship with a provider is under performing it is important to determine the cause and assess if this can be rectified before terminating the relationship. Only when the relationship cannot be fixed is it time to go to a pitch.

If you are considering pitching your business and want advice on the process, market selection or pitch management, contact P3 in Melbourne 03 9682 6800 or Sydney 02 9279 4997 or by email on people@p3.com.au

P3Sydney has a new office

 


P3Sydney has moved to Surry Hills. You can now find us at Studio 15, 35 Buckingham Street, Surry Hills, NSW 2010
New Phone: 02 8399 0922
New Fax: 02 8399 0933

P3Melbourne office remains the same at Suite 201, 63 Stead Street, South Melbourne, VIC 3205
Phone: 03 9682 6800
Fax: 03 9682 7855

As always, you can email us at people@p3.com.au

 

woolley speaks at summit

 

Find out how to maximise your marketing and advertising value at this year's Advertising, Marketing & Media Summit, July 23-24 at the Langham Hotel, Melbourne

Darren Woolley will be speaking Day One on
Are you getting what you paid for? Cost versus value.
- exploring the cost of various media structures
- does the 'Hub Model' work?
- remuneration can help effectiveness and efficiency
- remuneration and brand consistency working together

For more info or to register visit elitemedia

 

new brochure for P3Media

 

 

P3Media has launched a new brochure detailing a range of services including:

- media agency remuneration and resource review
- media buying benchmarking
- media strategy assessment
- media performance review
- media marketing training

Copies were mailed to our database last week. If you did not recieve a copy in the mailout, please email georgia@p3.com.au for your copy today.

P3 - helping people achieve commercial purpose through creative process

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