ISBA New Business Survey April/May 2010

1. ISBANew Business Survey April/May 2010

2. Research objectives • To explore various aspects of the new business process among marketing and procurement professionals in ISBA member companies • The use and role of RFI’s • The length of the pitch process • Pitch costs & paying for pitches • The role of procurement in the pitch process • To explore reactions and level of interest in new pitch process • Pitch in a day • The two week pitch

3. Research methodology • Web-based survey undertaken on behalf of ISBA by Dataalive Ltd • Respondents invited to take part in the survey via ISBA mailing • 58 responses were received after an initial mailing and one reminder

4. RFI’s

5. 28% of respondents indicated that RFI’s are always necessary, whilst 66% feel that they are sometimes necessary Do you feel that requests for information are:

6. Respondents had clear ideas on why RFI’s are a necessary part of the pitch process • RFI’s are felt to enable clients to gain a better understanding of the supplier base and acts as a filtering tool so that only serious contenders make it to pitch – Leads to better short listing • The use of RFI’s ensures that a consistent, complete and common set of information is collected from participating agencies • The use of RFI’s enables procurement professionals to assess the financial strength, capabilities and resources of agencies invited to pitch

7. 31% of respondents indicated that RFI’s are used as part of the pitch process on all occasions, whilst 57% use them on some occasions Do you use a request for information (RFI) as part of the pitch process?

8. 88% of respondents who feel that RFI’s are always necessary use them on all occasions, whilst 12% use them on some occasions Do you use a request for information (RFI) as part of the pitch process?

9. The length of the pitch process

10. 44% of respondents feel that the optimal time frame for a pitch process is 1-2 months, whilst 32% consider it to be 3 -4 months and 18% 3 – 4 weeks What would you suggest as an optimal time frame?

11. In practice the pitch process takes slightly longer, but is very close to the optimum

12. The vast majority of respondents feel that the length of the pitch process is about right

13. The optimum time frame for the chemistry to shortlist stage of the pitch process is 8.3 working days with nearly 51% of respondents expecting this to take one week or less and 82% two weeks or less Average 8.3 working days

14. The optimum time frame for the shortlist to pitch stage of the pitch process is 12.7 working days with 56% of respondents expecting this to take three weeks or more

15. The optimum time frame for the shortlist to pitch stage of the pitch process is 13.7 working days with 38% of respondents expecting this to take four weeks or more and 55% three weeks or more

16. On average 5 agencies are met at the chemistry stage of the pitch process

17. And invite 3 to 4 agencies to pitch. Only a minority (8.6%) invite 5 or more agencies to pitch

18. Over 70% of respondents indicated that they build time into the pitch process to meet agencies to discuss initial thoughts Do you build time into your pitch process to meet with agencies mid-pitch to discuss their initial thoughts (e.g. tissue sessions)

19. 60% of respondents who indicated that they hold mid-pitch meetings with pitching agencies meet them once, whilst 38% meet them twice If so, how many times would you typically meet agencies to discuss their initial thoughts?

20. Feedback after a pitch All respondents indicated that they expected agencies to ask for feedback after a pitch The vast majority (97%) always provide it

21. Pitch costs

22. On average respondent indicated that internal pitch costs amount to £31,756 with the majority of this cost accounted for by internal man hours How much would you estimate a major pitch costs to run at your organisation for the following criteria?

23. Respondent estimates of creative agency pitch costs range between £13k and £30k whilst for a media agency they are thought to range between £11k and £26k Taking everything into consideration how much do you estimate a pitch costs the following agency types?

24. 70% of respondents indicated that they consider the cost of running a pitch at the beginning of the pitch process, whilst 31% do not Do you consider the cost of running a pitch at the beginning of the pitch process?

25. Only 21% of respondents indicated that they make a contribution to the pitch costs faced by pitching agencies Would you normally make a contribution to agency pitch costs?

26. The average amount contributed by clients to pitch costs is £5,625 in a range from £2,000 to £10,000 Minimum – £2,000 Maximum - £10,000 Average £5,625

27. The role of procurement in the pitch process

28. 95% of respondents indicated that procurement is involved in the management of the pitch process in their organisation Is procurement involved in managing the pitch process in your organisation?

29. Respondents had clear ideas on the role of procurement professionals in the pitch process • Procurement and marketing work closely together • Procurement own the commercial process • Procurement always involved in pitches of any substance/above a certain value • Procurement manage the pitch process and ensure that it is run efficiently but are not necessarily involved in the decision making process

30. 32% of respondents indicated that procurement had been involved in the pitch process for 5 years or more, whilst 37% indicated that they had been involved for 3-5 years How many years has procurement been involved in these type of activities in your organisation?

31. The key elements of a great pitch are considered to be • A Good quality brief with clear objectives and KPIs. Clear and concise requirements and expectations and a clearly defined scope of work • Commercial understanding of the challenge and objectives that goes beyond replaying the brief at the start of the pitch • Stakeholder engagement • A standard process that offers suppliers fair competitive opportunity to win • A solid team performance (from the agency), featuring characters who will ultimately work on the account • Strong project management with clear timelines • Openness and honesty on all sides • A collaborative approach between a client and the agencies involved

32. New pitch processes

33. 58% of respondents indicated that they thought that there is a need for a new type of pitch process In your opinion do you think there is a need for a new type of pitch process on some accounts or types of business? For example for a digital pitch or a pitch for a project?

34. 5There are mixed views on the efficiency of the current way of handling pitches How would you rate the efficiency of the current way of handling pitches?

35. Although there are more positive views of effectiveness How would you rate the effectiveness of the current way of handling pitches?

36. Pitch in a day (PIAD)

37. Pitch in a day (PIAD) One route is to do a “pitch-in-a-day” session. As the name suggests, this is a potential new way of pitching that condenses the pitch process into a single day. Having created a shortlist, it would involve the client briefing each short listed agency in the morning, spending the day with the agency, and then having the agency present its response to the brief at the end of dedicated day with each agency there by condensing the pitch process e.g. if you briefed 3 agencies the pitch process from end to end would take 3 days:

38. 25% of respondents indicated that they would be interested in the concept of a pitch in a day (PIAD), whilst 50% are not interested Do you feel that this way of pitching has potential for you as a client?

39. There is interest, but this is tinged with a degree of scepticism about PIAD • Focuses the business • It would be quick and replicate real life more realistically • Full day thinking rather that a few hours ensures focus. Shows they can deliver under pressure. • ...interested, but only for small-scale assignments, and assuming a fair bit of due diligence had been done in advance (e.g. RFI stuff) • Willing to explore various approaches. This seems to apply more to discrete projects/executions than broad strategic engagements, but who knows? • Happy to try it if it - not sure it will get enough across in a day especially for a major account, but sounds interesting

40. The scepticism is exacerbated among those who are not interested in the concept • I think you can really condense the pitch time depending on what you are doing. However, there are pitfalls to watch out with a brand like Coca-Cola if you make the timings too tight as you end up wasting time for both the agency and yourself. If this is about exciting thinking then yes you can but if you are looking at a deeper understanding of our system and what can and can't be done then you need to give greater time. This could be used if you are looking at talent to respond to communication challenges, rather than specific problem solving. • Agency requires greater time to think about the target audience and understand their motivations and barriers. • it would lack the rigour and sheer time required to identify who has the most to contribute. If we had done this in our most recent pitch we could have made a catastrophic error, or a basic error.

41. There are felt to be potential problems with PIAD • Reduced quality of proposals • This means that the client will have to spend 1 day with each agency which might be difficult as all the same stakeholders needs to be involved in all of the agency pitches. So if you run this kind of pitch with five agencies that is five days out of the office. If MD's are involved this type of pitch seems unfeasible. • Tends to lead to strong creative solutions to easy strategic issues. Not good for getting brilliant media solutions, which really do need research that can't be done in one day. • They do not have access to other agency resources, also what is good about the current process is that you can brief on an up and coming product, or launch and then actually use the work that is done in the pitch by the winning agency to implement when the contract starts - usually the work done in the pitch process is probably the best work the agency often carries out because it is done under a pitch situation. Condensing this down to a day does not give the agency time to carry out research or make it a " great " piece of work.

42. There are felt to be potential problems with PIAD • Do not think we would see a 'true' picture of the Agencies capability in the 'real' environment • X factor at work !! • Pitch is not just about the agency presentation it also involves contract negotiations which can be long and protracted. This would have to be done before hand or on the day. Not sure what level of response you would get back by only having a day to respond. How would you monitor an agencies strategic thinking and planning as they would have little time to demonstrate their capabilities. Main drawback is that the agency would not be able to develop and present any creative in such a short period of time which is an important part of the pitch process. • Follow up sessions always reveal more and gives the client a chance to re-affirm. Plus not meeting the people who work on the account is also a disadvantage.

43. 42% of respondents agreed that PIAD would give them greater insight into the working practices of agencies Do you feel that PIAD could give clients greater insight into the working practices of agencies, their approach to problem solving and chemistry

44. This rises to 86% among those expressing interest in the concept

45. Whilst 32% of respondents feel that PIAD would lead to increased frequency of pitching 30% disagreed Do you feel that using PIAD may actually encourage clients to pitch more regularly?

46. The two-week pitch

47. The two-week pitch We recognise that some clients need to see a creative component to their pitch. Therefore we have developed the concept of the two-week pitch. It is akin to a creative tissue session where agencies present concepts only. For some clients, what can be seen at this session is a sufficient indicator for a client to appoint an agency, without having to see full blown creative answers. In the interest of both parties this will shorten the time, cost and the process.

48. 61% of respondents indicated that they were interested in the concept of a two-week pitch, whilst 21% were not interested Do you feel that this way of pitching has potential for you as a client?

49. There is considerably more positivity regarding the concept of a two-week pitch • More practical than PIAD and more likely to bear a more genuine portrayal of the agency's work and methods • This feels slightly more in depth than the one dayer and would allow the agency to put in more background work on the pitch. • More time to evaluate/test and also answer a lot of the 'non creative' questions from large clients e.g. commercials, contracts, CSR, green issues etc • Pitching on concepts is a good idea and one that we currently practice. • General consensus is for the idea of reducing the time in process and costs.

50. But there are some negatives • PIAD could work because of the time pressure, this concept just seems like a shorter and less detailed version of a traditional pitch event • In an advertising creative pitch would require full blown creative answers we would not make a decision based on concepts. In recent pitches the concepts have looked great however when it came to the full blown creative response we have seen issues that lead to the supplier being declined. We are very risk adverse and would not take this sort of risk. Also, I do not think you could take concepts to research. This may not be such an issue with other areas. • Doesn't show understanding of the industry or marketplace • Does not enable a thorough evaluation of the Agencies capability, ethos etc.