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Ms. Jane F. Bedford

The High Cost of Free

Clients are demanding more and more "free" work from agencies as a hurdle to winning new business.
 
Even when the client requests that there be no "spec work" at a particular stage, many agencies spend enormous amounts of time and money to do just what they’ve been given a “hall pass” to avoid. As a matter of course, the clients accept these gifts because, after all, the agencies are doing it for "free."
 
With the cost of pitching business growing higher and higher with speculative work shouldn’t we all act more responsibly? It's a recession for heaven’s sake!
 
 
Does Jane's call to action make sense? Can agencies differentiate their offering and can a client make an agency selection without spec work? We’d welcome your comments.

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RE: the high cost of free

Jane, you make a great point, and one that should cause us to look inward at the source, or perhaps perpetuation, of the problem. We (agencies) are quick to raise our hands and cry foul at today's practices, but when it comes down to it we always strive to over-deliver on client expectations. We have been trained--and have trained ourselves--that doing exactly what the client asks is never enough. In fact, we are convinced that if we go into a final meeting (or even an RFI or creds meeting) with only what is asked of us, there will be five others who take it to the next level and out-deliver, leaving us scratching our heads wondering why we were cut for not addressing topics that were absent from the client's request. Your suggestion of bringing the consultants, the AAAA, and the ANA together to establish spending guidelines is a good one. And I think this is a great topic/challenge for the next AAAA New Business Committee meeting. I would also like to see greater restrictions on the RFI questionnaires (numerous posts address this topic in March's RFP's From Hell post). Currently there is an AAAA-recommended format, but this is rarely followed (much less enforced) and needs to be re-examined. We must figure out a way to keep these upfront costs and resource-engulfing submissions under control.
Posted by Mr. Matthew Anderson (Wednesday, April 22, 2009 1:30 PM)

President/CEO Worldwide Partners

We, Worldwide Partners, just did a global survey on pitch fees and found that EMEA clients are overwhelmingly more likely to pay pitch fees to agencies than U.S. clients. The average stipend is 4,000 Euros. Not huge, but at least a sign of respect. Plus, if an average agency pitches once a month, this equates to 48,000 Euros (about $60K) so it at least pays for one junior person. The IPA in the UK seems to have led the way with creating standards that the client community appears to adhering to. Tough to say, 'no' in tough times. But sooner or later, agencies have to stop giving work away - not just new business work but strategic thinking/planning, too. This could be an opportunity to tie pay for performance into winning an account in order to help recoup some of the time/hard costs for pitching the business. Not perfect, but a step in the right direction.
Posted by Al Moffatt (Wednesday, April 22, 2009 6:33 PM)

What is the value of free?

We're making an effort to differentiate ourselves by making a clear statement about exactly what we do and relying on that to rise above the spec/no spec battle, and having some success. Yet there is always a desperate agency willing to do the work for free.  What I want to know is when will the clients take a stand -- if they say no spec, why don't they disqualify agencies that disregard that edict?  Yes, this is a pipe dream, but if an agency doesn't value its own work enough to stop giving it away, how much can it really be worth?  To paraphrase Jane, what is the value of free?
Posted by David Moore (Monday, May 18, 2009 4:45 PM)
 

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