NTUC FairPrice recently called for a pitch and appointed its incumbents Havas on the account following a five-year relationship.
While re-appointing incumbents is not a practice uncommon for brands, many agencies still have a gripe over such occurrences. Some say, such pitches are simply an avenue to fish out more ideas for future campaigns.
Marketing spoke to Christina Lim, director, brand & marketing, NTUC FairPrice who was behind the decision.
"We take all tender processes very seriously as we recognise the amount of work and time agencies have to put in. There were no compromises in the process," Lim said.
She added that the evaluation process was stringent where shortlisted agencies were presented to an evaluation panel of nine people comprising senior management at FairPrice from various departments.
"The agencies all did well and were strong contenders. Havas Worldwide and Havas Media emerged winners based on their own merit."
NTUC last appointed Havas Worldwide and Havas Media in 2008 and Lim explained that the pitch was called simply to review the relationship and present an opportunity for other potential agencies.
According to statistics from consultancy firm The Observatory, global experiences show that between 2,000 to 3,000 working hours are spent within a marketing team working on a mid-size pitch.
From its local knowledge of the Singapore market, The Observatory estimates, that in a mid size strategic and creative pitch, each agency will probably invest between 1,500 to 2,000 working hours and will have hard costs of around SG$10,000.
"The direct and indirect costs of pitching are obviously substantial for both marketers and agencies, and we always advise that both parties should be approaching the decision to pitch only after careful consideration," Richard Bleasdale, regional managing partner of The Observatory Asia Pacific said.
Fix rather than switch
Rather than call a new pitch, Bleasdale advices brands and marketers to work with their incumbent agency outside of a full pitch to ‘fix' the existing issues that are making pitching a consideration.
"Both the marketer and the agency have invested time, money and intellect into their commercial relationship - and this investment, which manifests itself in brand/business experience and knowledge, is often lost when a marketer switches from one agency to another," he added.
Also, Bleasdale added, pitching or switching often does not fix underlying issues that are often the cause of dissatisfaction in a client-agency relationship.
Increasingly, marketers have a compliance requirement to go to the open market every set number of years to review their strategic and commercial agreements so as to ensure they are getting the best mix of quality and value.
In such situations, a pitch is often required.
Nonetheless, Bleasdale added, it is not always necessary for that to be a full strategic and creative pitch.
Agencies: Watch your own back
For agencies, it is advised they need to carefully weigh several key factors, before making the decision to throw their hat into the ring.
According to Bleasdale, often, the most successful agencies are the ones with a pre-defined set of questions and a point of view in advance, on the answers.
"In any specific pitch scenario, if the actual answers they get don't stack up, they shouldn't pitch," Bleasdale added.
While not a complete guide, Bleasdale added that asking some basic questions should indicate if the agency should in fact pitch for the account.
These questions are as follows:
1) What's our experience like in this category?'
2) How many agencies are pitching?
3) Why are they pitching?
5) What pre-pitch agreements do we have to sign?
6) Do we actually have the resources available right now to do a good job on this pitch?
The point for agencies is that, no one can force them to pitch - they have to make a judgment call on whether to be involved or not, he added.
"Unfortunately in many cases, agencies do not approach pitches with a rational mindset, and weigh the pros and cons of being involved with the head rather than the heart," he added.