PITCH GUIDELINES
Background
It is estimated that Uganda Ad agencies spent UGX 2.2 Billion last year alone on preparing and delivering pitch presentations to various clients.
While pitching and competitive bidding is healthy and should be encouraged, the prevalent pitch processes in Uganda are wasteful not only to the Ad agencies involved but also to the clients holding them. On the one hand, long winded pitches cost Ad agencies productive time and client valuable relationship. On the other, pitches lose potential clients executive time, often not worth the risk of a mismatch with the new agency.
That said, both local and international clients remain misguided or oblivious of the need for pitch process that is fair to both the service providers and the procuring entity. In the absence of a set of principles that guides the pitch process, unfair local practices continue unabated to the financial detriment of ad agencies and at the risk of client brands.
To minimize the risks and stem the losses, Uganda Advertising Association has analyzed best practices from other regional and global markets to provide a balanced set of guiding Principles to serve as a reference point to marketers, advertisers and agencies to follow in order to improve the professional standards that underpin the agency pitching and selection process. Seven of these guiding principles are listed below
OVERRIDING PRINCIPLES FOR AGENCY PITCH GUIDELINES
- The UAA Pitch guidelines are aimed at attaining fairness to all parties involved. By no means are they intended to undermine competitive selection of service providers.
- In instituting these guidelines, UAA seeks to deliver value and curtail waste for all key stakeholders including the following:
- For profit businesses
- Non-Government Organizations
- Creative and Media agencies
- Public Relations and digital agencies
- As this document forms an extension of the self-regulatory principles of our industry, it will only be effective if it binds all parties who shall consequently be required to fully respect and comply with both the letter and spirit of the guidelines.
- To prepare the guidelines, UAA researched on international best-practice and consulted with local agencies, advertisers and marketing professionals to gain added perspective.
- Competition must prevail. However success will be attained if intellectual property is protected and where direct costs are incurred in pitching, the same shall be fairly reimbursed to the parties concerned, save for the selected agency.
- The intention is to “Keep it simple” and therefore we have confined these guidelines to a simple 10 Point Practice framework.
1. ENSURE THAT A PITCH IS THE CORRECT SOLUTION.
Pitches are costly both in time and money that both the client and the agencies in question may not have. The decision to pitch should be based on rational rather than emotional reasoning. The marketing team of the organization ought to give consideration to the time and cost to all parties that go hand-in-hand with the task of finding a new agency.
To help advertisers determine whether to embark on a pitch process, UAA recommends that the client should formally assess the incumbent agency and determine whether it would be more beneficial to make the relationship work or seek a new agency
However, should you conduct such an analysis, and find that the answer remains to open your account to a pitch, it is important to have an open and frank discussion and notification to the incumbent agency. This will provide protection not only for your brand / company’s reputation, but for the incumbent agency as well. A notification period of three months to the incumbent agency is required. This will among others allow for appropriate transition and settlement of liabilities to suppliers including members of UMOA, NOACA and other supplier groups.
2. CLEARLY OUTLINE THE DECISION CRITERIA.
When inviting agencies to pitch, the Advertiser should identify and inform the agencies of the decisive factors for the final selection. While UAA strongly recommends that, other than in exceptional circumstances, the pitch should be limited to credentials, it must be clear from the brief whether credentials, strategic proposals or combined strategic and creative proposals are required.
All participating agencies should respect the client’s wishes in this regard. Be explicit about the nature of services, which you, the Advertiser, will require. If possible indicate the preferred remuneration structure and contract terms. The following are some of the remuneration models that advertisers may opt for when signing up agencies:
Full Retainer Model:
Entails a monthly retainer fee paid to the agency to cover the staffing, overhead costs and margins arising from the resources agreed upon with the advertisers in accordance to the scope of work. Where an advertisers opts for this model, the agency passes on all commissions and negotiated discounts to the advertiser
Full Commission Model:
Under this model, the advertiser does not compensate the agency on the understanding that the latter would retain all commissions and discounts earned from third party suppliers that it handles on behalf of the client
Hybrid Model:
As the name implies, the advertiser pays a proportion of the monthly retainer to the agency on the understanding that the latter would earn commissions from third party suppliers that it handles. The agency however credits the client with all discounts earned from third party suppliers
Project Based Model:
With this option, the advertiser pays the agency on need basis. In this case, the parties sign a frame agreement with pre-set tariffs that would then apply during the period of the contract
3. LIMIT THE NUMBER OF AGENCIES
Having conducted the performance / needs evaluation, advertisers will be expected to limit the list of agencies that actually have to develop strategy and creative materials as part of the pitch process. UAA recommends that the advertiser conduct the pitch process in at least two stages as follows:
Stage One: Credentials
Invite 8 to 10 prospective agencies to submit their credentials. Among others credential outline the following:
- Agency resources including professional staff, their training and relevant experience
- Past and current list of clients and projects undertaken
- Vision/philosophy and a brief motivation to be included in the pitch list.
As a potential client, the above will enable you to make a quick evaluation of who is most likely to be able to meet your performance / needs criteria.
Caution to Marketers:
You will be inundated with requests and motivations by all sorts of suppliers (some real agencies, some otherwise), once the news is out that you are pitching. Once again the importance of having done your groundwork will enable you to stand by your decision to limit the competitive framework.
Caution to Agencies:
Some marketer invite submissions without the serious intention of signing up a new agency, but rather, to fulfill the requirement of the procurement process. Incessant attempt on your part to get into the pitch list may only lose you precious resources and unnecessarily erode your profitability, while putting price pressure on the industry as a whole.
Stage Two: Strategy and Creative Pitches
From the submissions in Stage One, shortlist 3 agencies, 4 if the incumbent agency is to be included for further briefing to develop and submit campaign strategies and creative concepts. This would go along way in saving all the agencies not selected scarce resources and time that they need to sustain profitable relationships with their existing clients
4. CONSIDER THE TIME NECESSARY FOR RESPONSE TO THE BRIEF.
Prepare a firm timetable for the pitch process and make sure that all of the agencies get equal treatment and stick to the timetable. A minimum of three weeks is considered fair for a full creative pitch. Allow enough time (even up to two days in complex cases) for the agencies to ask questions and discuss the presentations prior to committing to participation.
Clearly outline the time allowed for the actual presentation. UAA recommends a minimum of one-hour presentation time with an additional 20 minutes for Q&A.
5. PITCH REJECTION FEE
Given that high costs involved, UAA expects advertisers to set aside “pitch rejection fees” to be paid to the agencies that are not selected by the client. Please note that the average cost of preparing and delivering a professionally executed pitch is UGX 15 million. Depending on the advertiser’s industry, this figure may be as high as UGX 150 million. This results in inflationary factors and impassioned responses from the agencies that were not previously successful!
A pitch rejection fee of UGX 5 million shall be payable by the advertiser. The pitch rejection fees should apply to all agencies, including the incumbent – if included in the process. The main objective is to motivate the agencies, although one should not expect the agencies to make a profit on the pitch process. Guidelines on pitch budgets may be obtained from UAA from time to time.
Any advertiser that for a good reason is not in a position to pay “pitch rejection fees” to the participating agencies, should settle on its preferred agency on the basis of credentials submitted at the first stage of the agency selection process
See PITCH REJECTION FEE breakdown
6. GIVE AS MUCH INFORMATION AS POSSIBLE.
To protect confidential information, the advertiser is advised to draft and have all participating agencies sign a non-disclosure agreement (NDA) before the pitch process begins
Once the agencies have accepted the “terms and conditions” of the pitch, the Advertiser must be willing, on a confidential basis, to share relevant market data and other relevant research, including post-testing of existing campaigns.
The agencies should also have access to the Advertiser staff with whom they would be working with in the future. Identify the “anchor” person/s within the Advertiser’s and agency’s organizations, to ensure clear and consistent communications channels.
If the agency requests so, allow them to meet and interview your trade partners, suppliers etc. realizing that the reason they wish to do so is to broaden their understanding of your business. Assist them by communicating with or providing a letter of introduction to the relevant parties.
7. SET UP AN OBJECTIVE EVALUATION PROCESS.
Make sure that you understand the roles of all staff involved in the pitch process. Ensure that all decision makers are fully and equally briefed and present at the final pitch.
Ensure that the participants from the Advertisers side are participating because they have a meaningful role to play and not for “entertainment” purposes.
At the start of the pitch presentation, advise the agency staff about the job titles and roles of all those attending from the Advertiser’s side. Establish an objective evaluation system for assessing each pitch. Ensure that the agency team presenting includes those who would actually be working on the account.
8. FINALISE THE AGREED BUSINESS STRUCTURE BEFORE MAKING THE FINAL DECISION.
Before making the announcement of the winner, work out the business side of the partnership e.g. contract including remuneration format, the management of the relationship and the timetables for the next steps.
9. DECIDE QUICKLY AND INFORM FAIRLY
As soon as possible after the presentations, ideally within one week to allow for internal discussions, decide on the winning agency. Ensure that all pitching agencies learn about the decision on the same day and immediately issue the necessary notice to the incumbent agency and key stakeholders.
To ensure effective transition, UAA in conjunction with UMOA and NOACA expect advertisers to issue at least three months notice to all the associations to ensure smooth transition and settlement of liabilities
When communicating to stakeholders, focus on the positive reasons for appointing the new agency and avoid criticism of the less successful agencies or incumbent agency (keep the dirty linen to yourself).
10. RESPECT COPYRIGHT PRINCIPLES
The creative concepts and strategic insights produced under the conditions of an agency pitch remain the property of the agencies. In cases where ideas produced by one or several of the agencies not selected are of interest to the Advertiser, the purchase of usage rights should be negotiated. The rights to the material presented by the winning agency are normally agreed when finalizing the Client-Agency contract.
The above guideline shall apply to any client that decides to sign up any UAA member agency through a pitch. Any such client will be required to abide by these guidelines, failure to which no UAA member shall participate in the client’s pitch process. Any UAA member agency that opts to participate in a pitch process in contravention of the above guidelines shall be suspended from the association for minimum of 12 months and maximum of 24 months as determined by such disciplinary committee as constituted by the UAA ExCom
UAA shall from time to time formulate and communicate further guidelines on briefing and recruiting agencies. For any queries, please get in touch with our secretariat at the contacts below:
UAA Secretariat
programmanager@uaa.ug