The media pitch can be an exciting and very valuable project for an advertiser, but it requires a lot of efforts, co-ordination, resource engagement, time and discipline to get it right. When done right, it can deliver a lot of value in terms of media, service, cost and quality, but if done incorrectly, it may at best result in a painful process and at worst, the wrong agency and in consequence another pitch soon afterwards.
So, the first question is: should you pitch or are you better off with the status quo? The answer can vary based on the individual situation of the advertiser, external factors or timing, but below you will find a number of consideration points that will indicate the course of action:
When it’s good to pitch
- New business or a major business change / disruption
New business conditions, which may significantly impact on the scope and size of media activities, can typically call for market intervention. The obvious one would be a start of operations in a new market, a major increase or decrease of the scope of the operations and with it the media spend, a merger or joint venture with another business, divestiture, or no media support to some brands.
Change in media agency model or strategy, e.g. partial in-housing or outsourcing of media, or a change in the advertiser’s internal structure, e.g. centralization or decentralization of media functions and activities, including changes in ownership of the media budget, would also call for a pitch (For more information on the pros and cons of different media agency models please see the following article:
Effective Media Pitch: Media Delivery Strategy – Progmatic Media
- An account has not been reviewed for a long time
A 10+ years agency relationships with no interventions are not unheard of. However, over the last few years, there have been some major changes in the media environment, the main ones involving transparency and the commercial model of the agencies. Unless the scope and the contract, in terms of both the commercial and legal aspects, has been regularly updated, the chances are the provisions no longer suit the current conditions and/or benefit the advertiser.
Some organizations actually call for a formal review of supplier relationship even if there is no immediate business need, but the relationship is older than, for example 3 or4 years, just to ensure the conditions offered are competitive and at the contract clauses are at latest standard.
- Quality of the existing agency relationship
Another obvious reason to conduct a pitch is if there is a major dissatisfaction with the current agency relationship, whether that be for commercial or service quality reasons. If the relationship is broken, and possibly beyond repair, or the advertiser is not getting from the relationship what is needed, a market intervention is usually the best alternative (I will touch upon negotiations without a pitch later).
Increasingly we are also seeing that client accounts are being proactively dropped by their agency when they aren’t happy with the client relationship, for example, when the agency is not making enough money and they do not see it changing anytime in the foreseeable future. However, even if the relationship is working, or appears to be, a review may still be a good idea (as per point 1)
- A major change in the marketplace:
Apart from internal changes, the external ones that increase supply or reduce demand for media ads may also be a good reason to pitch and these are typically exploited by more commercially savvy / oriented advertisers.
For example: a review during the economic slowdown, when many advertisers reduce their budgets, would make sense for an advertiser that maintains or increases their media activities, as its negotiation power would increase together with agencies/media owners’ hunger for cash and/or revenue. Other events that impact the supply/demand would be:
- Where either a major media provider or agency enters or exits a market. Interestingly, you might think that a major advertiser entering or exiting a market might have an impact on supply & demand but in fact it rarely does unless a significant number of advertisers move away or ‘boycott’ a particular media provider.
- A major shift in viewer habits causing a major abundance of inventory.
- The liberalisation of legal/regulatory restrictions on advertising.
- Measurement changes.
Stick or Twist? Extension or Pitch
Using the analogy of playing cards, when is it better to stick with the hand you have or twist and replace your cards. So, when is it better to choose negotiation / extension of an agreement, , instead of a pitch? I guess the number one reason that covers most cases can be described as “bad timing”, for example:
- Unfavourable market conditions:
Pitching during times of high media inflation, as was seen in 2021 and 2022, means the agencies are very cautious when submitting long-term proposals. When markets are unpredictable, unless you can use it to your advantage as your leverage, it’s better to wait it out.
- Major pitch activities
This might appear to contradict the previous point, but when the number of advertisers postponing their pitch creates a shortage of client activity. This leads to a whiplash effect in the next year, when the number of the reviews is a cumulation of the previous and current year’s pitch activities, and this means that agency resources may be scarce.
When this occurs, agencies become very selective in which pitches to participate in, so unless you are sure that your brand is one of the most desirable clients out there, you may not get the attention (and the great proposals) you’d want.
- No resources
Pitches are time and resource intensive, both for advertisers and for the agencies, and come on top of everyone’s daily activity and schedules. From the client perspective a hired consultant can do the bulk of the work, but there is still a lot of internal work and alignment that needs to be done. If you’re not able to invest your time and resources, postpone the review until you can do so.
This is especially true when your organization is going through a major change or transformation. While overall it may play to your advantage, for example, a merger that increases your market leverage, you still need to make sure you have the resources and decision-makers appointed before you proceed.
- No leverage
Businesses have their ups and downs, and when it’s not going great, not only do your media spend prospects look bleak, but you may appear as a problem client, e.g. having difficulty paying on time or defaulting on your obligations. This won’t attract many agencies, unless they themselves are desperate or they are willing to make a bet / put the efforts in hope for a strong business once the tides change.
Either way, agencies will calculate the risk factor into their proposal and it won’t be great. Therefore, if you have a good working relationship with an existing agency, your best option is to renegotiate / extend.
- Anticipated change in the foreseeable future.
If you know that in a year from now you will be the biggest advertiser in the market, while right now you’re not, why would you jump the gun and waste your future leverage now? You can still use this knowledge to your advantage in the negotiations with the current incumbents if you position it well (and the leverage is viable).
In summary
As you can see, there are a lot of factors at play, and you will need to get all your ducks in a row to ensure a high chance of making the pitch successful for all concerned. It comes down to good timing, both from an internal and external point of view, and an advertiser’s ability to attract the attention of the agencies, but also to utilize any leverage an advertiser has to gain the most advantage.
The Media Governance and Procurement Series
Our next article will cover the preparation phase of a good media pitch.