We love agency pitches here (we have to write about something other than data-driven gizmos) but they’re a pricey business and seem to be getting pricier.
They are in the US anyway with an ANA survey of 329 marketers reporting that they spend $408,500 on average to conduct an agency search and account review when an incumbent agency is not involved, slightly less when an incumbent agency participates.
Incumbent agencies spend $406,092 on average defending an account although 25% choose not to, for prettv obvious reasons although two-thirds of brands conducting reviews said they ultimately kept the incumbent in place. Other competing agencies spend an average of $204,461 per pitch.
The total cost for everyone averages out at around $1m, $1.2m if an incumbent agency pitches. Generally speaking these take two to three months and, among other nuisances, mean delays to new campaigns and even new products.
The US is the biggest market by far – for conventional agency services anyway – and, no doubt, the numbers are smaller in other markets. Even so it’s clearly a heck of a cost and commitment. It would be interesting to know how much cost goes to the consultants who crawl over pitches in ever-larger numbers.
The agency business is addicted to pitches of course. For all those who hate the things there are others who find it the most motivating activity and many executives floating around who’ve enjoyed long and profitable careers as new business executives (surely they can’t be successful everywhere?)
And for all this expensive activity does advertising get any better? Noooo…..