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NAC next in line to implement pitch fees, hands agencies SG$1,000

Earlier this year, CPF implemented a pitch fee process of SG$3,000 when looking for an integrated creative agency partner. Joining the ranks now is the Singapore’s National Arts Council (NAC).

In a conversation with Marketing, Yeoh Phee Suan, director of communications and marketing at NAC said that the council would be issuing pitch fees to agencies shortlisted in the second stage as it looks for a panel of creative agency partners. She said this was to ensure reasonable compensation for the agency’s efforts.

When asked how the amount of SG$1,000 was decided upon, Yeoh explained that the pitch fee amount was assessed based on a set of internal guidelines, and the scope of work required for the evaluation process. Hence, the number of agencies shortlisted and finally appointed will depend on the “quality of proposals” received.

“As we are still pending the conclusion of the tender, we can only advise on the interested parties at a later date,” Yeoh added.

In the first stage, agencies will be evaluated on the strength of their concept proposals for an NAC campaign, among other criteria. Meanwhile the second stage will see shortlisted agencies being invited to submit and present a more detailed proposal for the NAC campaigns.

Appointed agencies for the NAC pitch will be responsible for the conceptualisation and execution of creative campaigns, design, adaptation and production of collaterals. Other duties include campaign analysis and measurement. The appointment will last through 2017 with an option to renewal for two years, subject to review.

This will be for a myriad of projects including engagement activities for the Singapore Writers Festival, Singapore Art Week, Arts in Your Neighbourhood, Noise Singapore Festival and Got To Move, to name a few.

While pitch fees are a welcomed change in a market such as Singapore, often deemed a buyer’s market, Goh ShuFen, founder of pitch consultancy R3, is of the view that this is unlikely to become a norm. This is because the ways of working and execution of procurement policies varies from client to client in terms of experience, expertise and priorities, she explained.

“The intention behind imposing pitch fee is usually to discourage clients from calling pitches too often and having too many agencies waste resources on speculative work. It serves to protect the interest of agencies, and on that account, the organisation is usually the 4As,” Goh added. Whether private or government, Goh added that the industry will instead benefit from better pitching principles and process.

“A well managed process is not just more efficient for all involved, but more effective in helping them build their brands and get better return on their marketing dollars,” Goh added.

What the agency players think about pitch fees

Agreeing with Goh is Sorcha John, managing director at iris Singapore, who said that while the pitch fee is a nice touch, it certainly would not be the key determining factor for an agency to tender a pitch. This is because it really comes down to the chemistry of the brand and the agency.

“We pitch for brands or projects that we feel passionate about, where we see an opportunity to create a participation brand and when we do, we go all in,” John explained. Instead, John is of the view that what is more valuable is keeping the pitch list short, with three agencies ideally and four at maximum.

“The agency land is of high quality and competitive in Singapore, ensuring that each agency on your pitch list has a fighting chance of winning (25% and above) is the best way to respect the agencies’ investment,” John said.

For Fiona Bartholomeusz, managing director of Formul8, the gesture by government agencies is a long overdue one on the part of clients in Singapore. It also is also indicative of how agency work is valued. She is of the view that SG$1,000 does not come close in covering the amount of resources necessary for a pitch, hence both parties need to understand what the pitch fee is meant to cover. Bartholomeusz explained that the pitch fee could be a conciliatory gesture to cover basic admin expenses.

“When it comes to moderately offsetting some costs invested in undertaking a moderate sized pitch, the amount not even in the ballpark,” Bartholomeusz explained.

The reality is, a pitch fee should really be an amount which dissuades clients from calling multiple agencies in for the heck of it.

For example, pitch fees should be seen as an indication of how serious clients are in inviting only pre-selected agencies with the right track record for their industry. In addition, the fee should also be aligned to the size of the account.

Bartholomeusz added that she believes 4As in Malaysia and Philippines are much more progressive in enforcing fair pitch fees than the 4As in Singapore.

“The problem with the pitch climate here is how some clients see it as a free opportunity to just fish for ideas, and pass it on to a cheaper vendor to execute with no regard to intellectual property,” Bartholomeusz said.

For the case of formul8, Bartholomeusz explained that the agency rejects a large degree of the pitches it is invited for because either budgets or timelines are unrealistic, or it likely is a “dud pitch”, and the agency clients want to work with are already somewhat pre-determined. Hence for clients, putting their money where their mouths are might be a way for agencies to also determine how sincere a client really is.

All in all, pitch fees for accounts of a certain size should be the norm and implemented years ago. It’s sad that we are equally to blame for how our efforts and work have no perceived value at the conceptualisation stage.

Agreeing with Bartholomeusz and John, Yeo Ai Ling, founder and client services director at Wild Advertising & Marketing. She is of the view that this is a positive step in the right direction of a good agency and client relationship.

“Many clients fail to understand the amount of resource, thinking and work that goes into a pitch process. The high expense of pitching which may not translate to an account win might deter agencies from participating, especially if there are more viable jobs to work on,” Yeo said. She added that a pitch fee might benefit clients as it motivates agencies to participate, giving them a greater and possibly better choice of work to select from.

“This is a positive step forward in our endeavour as an Industry to foster best practices in procuring design and creative services,” Bernard Chan, CEO of 4As, said, weighing in on the matter.

When asked by Marketing if the 4As would get more involved in the implementation of pitch fees, Chan explained that the 4As recently worked with several industry associations to develop a set of guidelines on procuring design services. This included government agencies such as the DesignSingapore Council, along with other Design Industry Associations.

“Among other things, these guidelines address pitch fees, limits to changes, and ownership of IP,” Chan explained. However, these guidelines are currently not available to the public.

This was seen by Marketing in a brief sent out to various agencies. In a statement confirming the move, a CPFB spokesperson said that the move was to help “offset the time and costs incurred for the submission of design concepts including detailed sketches”. The account was eventually handed to Formul8, which will work to aid CPFB’s goal to make retirement planning top-of-mind with those in the middle-life segment.

 

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