To Pitch or Not To Pitch - The Ad Agency New Business Question

Only if you get paid?
by Todd Knutson

pitcherFive year-old hot-shop Droga5 now only pitches new business if they get paid. Why? They know they win 60-70% of the time when they are, versus only 20% when they're not.

Other agencies pitch and do spec work for free.

Given the pressures on agency new biz directors to generate revenue, what's a new business person to do?

A series of speakers at the 2010 New Business Conference weighed in on the issue of pitching. I tracked the range of opinions on the subject; here's what I heard:

  1. Be selective - only pitch when you believe you have a greater than 50% chance of winning (this has been a recurring theme over the years, voiced by numerous speakers whose agencies have very high pitch-win rates). Further, multiple speakers who carefully tracked their agency's performance over time, reported that they only win competitive pitches 20% of the time.
  2. To win a pitch, at least one of the agency principals should be passionate about the brand or company.
  3. You increase your odds of winning if you only pitch when you're paid. (How much should you charge? As one person said, "charge enough to make the client feel it and take you seriously".
  4. Don't do spec creative unless you get paid. (Think about it this way: if you give away your agency's product, you're saying it has no value, and what does that say to your creative team?)

As I read this list I immediately think, "chicken and egg". Which came first? Did these successful agencies start off only pitching if they were paid, or, did success allow them to establish these rules?

For the agency with average creative work, or those in a highly competitive market, it could be a tough decision to limit potential opportunities by adopting these principals. On the other hand, if you have great confidence in your work and your talent, clearly establishing how you'll work with prospective clients is likely to set you apart from your competition, and create a air of exclusivity and "eliteness" around your agency.

Another even more compelling point is this: if every agency demanded to be paid to pitch or to produce spec creative, it would become the industry norm. Of course, that assumes that there are no (and never will be) agencies out there who are desperate for work....

My two cents: if you can confidently place a stake in the ground and always get paid to pitch, go for it. I think you'll be better, and more profitable, for it.

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