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SMU

SMU explains why agencies are required to pay to pitch

Earlier last month, Singapore Management University (SMU) has called for creative, digital and media pitch for a period of three years with an option to renew for an additional year.

Agencies were said to be invited down to the briefing session as part of the open tender where a briefing was held. During the briefing, agencies that attended were given information about the business and the pitch including the university’s annual budget.

When they then decided to participate, the school asked the agencies to purchase the actual pitch document packet for SG$100.

Several agency leads Marketing spoke to under anonymity said this was not a common practice and were shocked at the occurrence. When asked to clarify the move, a spokesperson from SMU told Marketing that the move is “not the same as a paying a pitch fee” like many agencies deemed it to be but rather part of the procurement process the school has been implementing over the years.

“During the preview pitch briefing session, agencies were able to decide for themselves whether to continue participating in the process,” said a spokesperson from SMU. He stressed that the payment is simply “part of an administrative process to cover documentation and audit of pitch for good financial governance”.

“The agencies are able to ask any questions and at the same time ‘size up’ their competitors and assess their odds. The choice is all theirs. This fee is a standard policy by our Procurement Department that handles all tender and audit required for corporate governance,” the spokesperson added.

Agency reactions

In a conversation with Marketing, Craig Mapleston, managing director of Iris Singapore said such a move however would deter agencies, such as his, from pitching.

“Agencies already invest a significant amount of time and resources into pitching despite no certainty of winning the business,” said Mapleston. He added while SG$100 is by no means a huge sum, it is not the amount that matters, it is the principle.

“It’s an alarming signal of a ‘master and servant’ relationship for the pitch winner. In many countries agencies are paid a pitch fee to pitch for an account. While clients in Singapore rarely follow this, it’s a step too far to expect agencies to pay for tender documents,” he added.

Another agency lead who has worked with SMU in the past for several project echoed Mapleston’s sentiments. Anonymously, he said this is a growing practice in Singapore where admin fees are required to be paid.

“In traditional sense, clients used to pay for our services and also during big pitches. But this has changed. Agencies put in enough cost during the pitching process itself to win the business. So of course, if the agency really wants the business there is no choice but for us to pay,” he said.

Meanwhile. another agency lead pitching for the account told Marketing under anonymity that given the scale of the pitch, he was not surprised that a fee was demanded. He defended SMU’s administrative costs adding that a pitch fee in this case might be necessary due to the scale of the tender for both creative and media duties.

“At times, agencies can pay up to four to five figure sum. Hence a sum such as SG$100 are more often seen by most agencies as an administrative fee. This might be a measure to streamline the procurement process and filter out the keen parties,” he added.

Currently, the incumbents on the SMU account are Wild Advertising & Marketing as creative and ZenithOptimedia as media agency.

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