£38000 is the average annual cost to pitch if you are a UK design agency
This post was written by Fraser Black on Thursday, December 8th, 2005 at 1:01 pm and is filed under The dog speaks, Creativity.
We’ve just co-authored some ground-breaking research in partnership with British Design Innovation (www.britishdesign.co.uk). We approached them a few months ago with a view to gaining a better understanding of the design agency pitching environment. Why it happens and what current attitudes to it are from both an agency and client’s perspective. It makes for very interesting reading and it’s causing quite a stir in the industry!
We’ve just released the results and they constitute two research reports with analysis and commentary.
View the brief overview here Download the client appointment report here Download the pitch versus productivity (agency) report here
We’ve received massive interest from the UK and global industry.
Read about it in the press here:
Icograda
Brand Republic
So what’s your yarn?
pitch vs productivity, design pitching,
November 14th, 2005 at 10:02 pm
£38K per annum! Wow! Hopefully this research will allow some people to realise what a wasteful and draining process pitching can be for small agencies.
Look forward to seeing the response from the industry!
Thanks
Stef
November 16th, 2005 at 3:13 pm
Staggering! It is apparent that the competition between agencies is fierce. This kind of figure can only be a result of an aggressively competitive environment, good for creativity but potentially disastrous for small agencies. Financial pressure of this kind could be the demise of small agencies, many of which are responsible for the cutting edge work that makes London one of the creative capitals of the world. Who’s going to foot the bill?
November 16th, 2005 at 5:08 pm
And that’s precisely why a group of agencies in SA got together and took the following stance:
Johannesburg, Monday 25 July 2005: According to the Code of Ethical Conduct of the South African Graphic Design Council, think – a document that is required to be signed by all think members – the creative pitch process is considered unacceptable and unfair business practice. (The code is published on the think website www.think.org.za.)
Among other prerequisites the Code states, “A designer shall not undertake any work at the invitation of a client without payment of an appropriate fee.”
Gary Harwood, chairperson of think and director of HKLM, says this standpoint is a fundamental and non-negotiable position of the council.
“It would be naïve to expect a lawyer or doctor to render a professional service and impart intellectual capital, all on a risk basis, in competition with their peers, in the hope that they might secure an appointment in the future!” says Harwood. “Yet in our industry agencies are expected to deliver creative solutions without any regard for the time and effort that is spent during the pitch process.”
When a prospective client offers ‘an appropriate fee’ for the development and presentation of a speculative creative solution Harwood says, “It is at best only compensation for some of the time spent on the process, but never the actual value of the creative ideas presented.”
Think aims to educate the market as to the flaws in the pitch approach. “Prospective clients need to realise that it is an artificial situation,” says Harwood. “A team burns the midnight oil coming up with a few fabulous ideas, which may or may not hit the mark. Due to conditions that are inherent in the pitch scenario, these solutions are seldom rooted in any depth of insight into the client’s business and unique challenges. It amounts to creative gambling.”
Given the fact that pitch submissions are seldom adjudicated on any of the points that matter in the long term, an appointment based on a creative pitch is often inappropriate and often superficial. He says, “Little emphasis is placed on the agency’s professionalism, strategic skills or ability to understand and work well with the client.”
A far better approach is for the prospective client and the agency team to engage on a level that enables them to gain real insight into each other’s businesses. This lets the agency demonstrate its ability based on its credentials and portfolio of work, and allows the client to make a decision based on more than just a hunch. Prospective clients should also seek testimonials from the agency’s previous or existing clients.
“The best strategic and creative solution is one that is based on insight, understanding, trust and collaboration,” says Harwood. “Anything else is just unprofessional.”
The think membership roster consists of most of South Africa’s leading strategic branding and design agencies and a number of educational institutions offering design. All, plus individuals represented on the think Board of Directors, have agreed to stand united on this important matter. “We are confident that this step is only the beginning and are convinced that additional agencies, institutions and individuals will be adding their name to the list,” says Harwood.
It is believed that there is interest from the advertising industry to participate in this initiative and think plans to lobby government for its support.
If it is believed that a think member agency has violated the Code it should be reported to the think Board of Directors. Should the Board find that the agency has transgressed, it will be expelled from think and a press release will be issued by think detailing the transgression, the expulsion, the agency and the client.
Think invites everyone who wishes to support this important initiative to become a member and add their name to the list which will be continually updated and published on the website. For more information about membership log onto the think website: www.think.org.za or email: think @think.org.za or call: (011) 802-1486.
The following think members have agreed not to take part in creative pitches.
Bingo
CODe
Cross Colours Design
Enterprise IG
Gamatong Design Enterprise
GRID
Harwood Kirsten Leigh McCoy
Herdbuoys Branding & Design
Interbrand Sampson
It’s a Go! Communications
Kemistry Creative (Pty) Ltd
King James RSVP
Lowe Bull (Design)
Morning Star Design
Mortimer Harvey & Associates
Orange Factory
Orange Juice
Red Rocket
Saatchi & Saatchi (Design)
Simplicity Studios (Pty) Ltd
Storm MDBMP
Switch Branding & Design
Tequila
The New Black
Trigger
The following member Educational Institutions have also agreed to abide by the Code:
AAA School of Advertising (Jhb)
Cape Peninsula University of Technology
Department of Graphic Design, University of Johannesburg
Open Window School of Visual Communication
The Design School Southern Africa
Vaal University of Technology
Vega School of Brand Communication
The following advisors to the think Board of Directors have also given their firm support of this position:
Adrienne Viljoen, Design Institute
Jacques Lange, Bluprint Design and President Elect of Icograda
Ravi Naidoo, Design Indaba
International associations that have taken a similar stance are:
Icograda, www.icograda.org
The Australian Graphic Design Association (AGDA), www.agda.asn.au
American Institute of Graphic Arts, www.aiga.org
Society of Graphic Designers of Canada (SGDC), www.gdc.net
Institute of Communications and Advertising, www.ica-ad.com
Their websites offer a wealth of valuable information on the subject
November 16th, 2005 at 5:11 pm
Why are we all surprised?
Clients, particularly in the public sector, as commoditising design with procurement processes largely designed around ‘value’, without understanding what value is. Additionally, many of them want unbriefed, speculative creative work supplied as if it’s a sample you can take off a shelf.
Industry response - stop free pitching. Stand up for your work. Become more professional in your dealings with clients.
November 17th, 2005 at 12:14 am
We co-authored the research with Firedog Design to move the ‘pitch’ debate forward from anecdotal to factual. Previous arguements regards the pitch process have predominently been centered on the de-valuing of an agency’s strategic contribution to a business - arguements that have been viewed by both private and public sector as emotional. It is fair to say that agencies equally need to reconsider their business models and indeed the way they present their value. Leading first and foremost with ‘creative’ results will not enable clients to judge agencies by any other criteria. Lead with the strategic business case and the interpretation techniques (thinking) that resulted in the creative solution may start to get the message across.
The majority of the private sector doesn’t actually care how much free pitching is costing the design sector. However those that claim to have a corporate social responsibility policy and public sector organisations who are wasting tax payers money via inappropriate procurement procedures - do have a duty to start taking notice. There are an estimated 4500 commercial design agencies in the UK - 56% of which employ less than 5. The research results demonstrate that an average £171 million is spent annually on free pitching for a sector that recorded a fee income of just over £4billion in 2004/5. The research also showed that 26% of all free pitches/tenders are not awarded due to ‘change of marketing direction or lack of budget on the part of the client. This is madness.
I often hear agencies state that they are scared of losing an opportunity if they refuse to free pitch. However - if every other creative industry group (photographers, illustrators, film makers, musicians etc) earn income from their original fee and additional income through licensing, royalty and extended usage fees, without free pitching - why is it only the design sector that does not?
I would say it is because there are no industry standard business models behind which all agencies honourable unite. The other creative professions are managed by ‘agents’ whose business skills and united front has reaped dividends, copyright & creative respect from those that engage them.
The BDI has worked tirelessly (and continues to do so) to improve trading conditions - we have pitch protection documents, contracts, IPR helplines, advisory services etc etc - however the only people who can make a stand is the designers themselves by standing together, as the illustrators, photographers etc did a decade or more before them (albeit supported by their agents) and achieved a better deal. BDI is fully prepared and qualified to act as the industry agent but unless the industry in droves is prepared to become members and help us to fight the cause for you and the future generations - the pitch issue will just remain a circular debate moaned about in the pub out of the earshot of disapproving clients. We understand, we sympathise, we empathise, we act but for goodness sake - stand up and be counted. We asked 4500 agencies three times over a three week period to complete (inconfidence) the research questionnaire only 209 did. However - nearly 2000 (of the same 4,500 agencies) downloaded the results in just 4 days! Hum… who is taking responsibility here?
November 17th, 2005 at 9:01 am
Thanks for the feedback on what is happening in South Africa Simon. It’s useful to know how other countries are dealing with the pitching issue!
November 17th, 2005 at 9:47 am
£38,000 average annual cost to pitch if UK design agency
_ Fireblog » Blog Archive » £38,000 is the average annual cost to pitch if you’re a UK design agency
There are an estimated 4500 commercial design agencies in the UK - 56% of which employ less than 5. The research results demonstrate that an ave…
November 18th, 2005 at 11:50 am
After reading this research, I have got excellent confirmation that participation in free piches (tenders) is lost of time and money. I thought it intuitively so we do not take part in free pitches that require creative work and now I see that we are right.
Thanks for great work, Firedogs
December 8th, 2005 at 11:37 pm
The free pitch debate has been around a long time and will continue unless we stop doing the pitches. But! When I came to New Zealand I tried to do as I had always done in London and use a credentials pitch only. In London it limited my success but I still had enough good quality work to be happy. In NZ the credentials pitch counted for nothing, after a long time trying I switched tactic and tried a free creative pitch, it worked. According to designers here that I have met, it is the only way to get serious work, especially from the public sector. Hard but needs addressing.
On another point -
These documents make brilliant reading and provide a number of answers or at least clues as to the best way to make contact and keep clients. But for me they raise a couple of questions.
The “Client’s Perspective”
Receiving a brochure and receiving an e-letter both featured highly in the preferred method of contact. In light of new legislation around the world relating to privacy – at what point does an e-letter become spam?
Also, are we construing clients “preferred method of contact” as “most effective method of contact”.
In my own experience, 30 years of my own practice in London and 4 years in the antipodes, cold calling has a success (success = gaining an interview/presentation not necessarily the work) rate of around 5%. Brochures and letters in the post and latterly e-letters/brochures showed a drop in success to 0 - 2%. (The conversion rate to work has too many other factors be worth comparing).
It might be said that the material sent could be the wrong sort, on the other hand by making real contact the chemistry process has already started. Which leads me to believe that real contact – cold calling – will always have the edge from the sellers point of view.
As a long time employer of many freelancers I cannot recall ever employing anyone that wrote to me, I have employed plenty of people that either made a good phone call or just knocked on the door.
With thanks for a brilliant survey and best regards, Ken.
December 9th, 2005 at 12:34 pm
Thanks for the input Kenneth! I do agree it is quite difficult to accurately gauge what the best way to get those lucrative pieces of work. It goes without saying that research quite often has to be taken with a pinch of salt. What you are doing is tapping into what the clients “think” they respond to, as opposed to how they actually subconsciously react. Faced with a really positive cold-call using a professional actor (known within the industry to adopt a personality and project it effectively to the potential client), people can sometimes act positively and in a numbers game if you’re making enough courteous calls you’re sure to have a strike on a few. Much like fly-fishing in a deep lake, it’s the attractiveness of your fly that gets the big salmon. Not that I’m liking design buyers to fresh-water fish in any way or form… What we also find, is that there’s nothing quite like a luke-warm call, a call based on a referral from an existing satisfied client. Now you’re fishing with hand grenades!
December 9th, 2005 at 12:37 pm
Note to readers, I’ve adjusted the date stamp on this article as it’s receiving more interest over the past few days… Keep those opinions coming!
June 13th, 2006 at 4:34 pm
[…] Creative pitches cost the industry an average of £38,000 per year which for a small agency is undeniably a large cost to swallow. Unfortunately the client expects these and unless you are fortunate to gain work on based on reputation and resume alone then it is unavoidable. While these costs are inevitably absorbed and reflected in the price of each project I do think it is a necessity and perhaps budgets should be allocated to take these into account. It is a form of advertising and promotion, albeit concentrated on once client, so perhaps this should be properly accounted for and by doing this refining the process to make it as economic as possible? Filed under: Design, Web — Bish @ 5:34 pm clients, creative and pitching […]