The Asda-Sainsbury’s merger story shows just how tough pitching can be on agencies

We can imagine the euphoria that swept over AMV BBDO on Friday when they won Asda from Saatchi & Saatchi. The picture above, Tweeted by AMV on Friday with the caption, “Let the celebrations begin,” shows just how ecstatic the usually modest agency must have been.

To hear the very next day that Asda is in £10 billion merger talks with Sainsbury’s will have taken the edge off the celebrations, to say the least.

Mike Coupe, the Sainsbury’s CEO in charge of the new entity, says the merger won’t be finalized until the second half of 2019, which will make it difficult for Asda and AMV to focus on assembling the “ecosystem” of agencies they planned, or to go forward with whatever strategic and creative ideas they came up with in the pitch.

The plan is to keep the Sainsbury’s and Asda brands separate, but who knows what will happen in the retail arena over the next year or so while the merger is being finalised? The threat from discounters and the rise of Amazon could easily derail the current plans.

Asda could be turbocharged as a value supermarket, or the brands and ranges could slowly merge. Either way, it’s not going to be easy for AMV as its client is distracted by the merger.

The highs and lows of new business can be very cruel, but in many ways, pitching is the life blood of agencies, keeping them motivated, testing them to their limits, and forcing them to innovate.

At the same time, it’s a big risk and a huge drain on resources, which is why agency intelligence company Creativebrief devoted a recent event to “Ridding the industry of the pitch as we know it.”

AMV will be hoping that all that time and money they spent on the Asda pitch will still be rewarded, and Saatchi & Saatchi are unlikely to regret doing their best to hang on to such a big piece of business, but the unfolding story of Asda and Sainsbury’s shows just how vulnerable agencies are in the whole pitch process.

Charlie Carpenter, Creativebrief’s managing director, suggested pitches should be limited to two weeks, after which the client should pick an agency for a paid three-week trial.

But the assembled agency and client chiefs – even though they agree with Creativebrief’s survey claiming that 93 per cent of agency CEOs don’t like the traditional pitch – just aren’t ready to let go.

Gareth Collins, the CEO of Leo Burnett, said: “We are not entirely without blame as agencies. When you pitch, you pitch with utter enthusiasm; you’re all-in or it’s not worth doing. You think, ‘oh we’ve not done the POS, we’ve got lots on Facebook and Instagram but nothing on Twitter,’ and before you know it you’re down to ‘let’s put an ad on the underside of a manhole cover, just to show how it would work there… Probably the clients leave the room and can’t remember half of it.”

This enthusiasm is difficult to temper, but two solutions stood out for Collins, along with Alex Naylor, Barclaycard’s marketing director, and Fergus Hay, Leagas Delaney’s CEO.

They all wanted to see a more “human” approach to the pitch; spending less time on razzamatazz and more time getting to know each other. Naylor said: “Pitches are won out of the room. The best creative thoughts and breakthrough strategies come form informal get-togethers – creativity comes from unusual connections.”

They also agreed that transparency about the size of the pitch and the prize on offer would help to create a more realistic process. That is easier said than done when your company is in merger talks that (presumably) the CMO knew nothing about.

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About Emma Hall

Emma Hall
Emma Hall is the former London Editor of Ad Age, where she covered European marketing advertising, digital and media stories. She has written for newspapers including the Financial Times, The Guardian, The Times and the Telegraph, and was previously a section editor at Campaign. Emma started her career in New York as a researcher for a biography of Keith Richards.

4 comments

  1. Stephen,
    You say “pitching is the lifeblood of agencies,” treating it as a positive. There is another view. Pitching has become essential because client relationships are so temporary and short. This arises from client dissatisfaction with agency quality and cost. Pitching, in this view, is a symbol of agency failure.
    Better to retain clients for a very long time and pitch infrequently. Sadly, that is not the case today.

    Cheers,
    Michael Farmer
    Author, Madison Avenue Manslaughter

  2. Look like Michael beat me to it – the ‘pitching / newbiz is the lifeblood’ cliche of one of the most damaging that agency chiefs tell themselves. More to the point, not sure this story is even about pitching – I feel for AMV, but it wasn’t the means of appointment that’s left them in an awkward spot, it’s just being out of the loop.

    And to Gareth’s point – he’s right that agencies are ‘not entirely without’ blame. When commitment to a new client is measured solely in executional volume, that’s not too healthy. But I’d argue that agencies are completely to blame for their frustrations around newbiz. Just say no.

    Robin Bonn
    Founder
    Co:definery

  3. Michael is dead right, the days of long agency client relationships is dead. Remember the Walmart pitch a few years ago? Five agencies spent millions only to discover it had been fixed in favor of “Agency of the Future,” Draft FCB. When this was disclosed, the other four agencies were invited to re-pitch. So they spent millions more for a 25% chance of winning. As I say on AdScam… You just can’t teach an old dog new tricks.
    Cheers/George

  4. Adrian Langford

    Coverage of the Sainsbury/Asda merger revealed that both sides spent “months” doing their homework, mainly checking that it would not fall foul of competition regulations. Someone in the know about this at Asda must have been part of or aware of the pitch process, so it might have been thoughtful to discreetly suspend the process, and come up with some suitably anodyne cover which did not give the game away.

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