This year is off to a big start for media agencies. Last week, The Drum reported that $10 billion worth of media business was already under review (based on ID Comms estimates). Brian Wieser of Pivotal Research has taken this year’s activity to date as a sign that 2018 will be a repeat of 2015-16’s Mediapalooza; perhaps surpassing it (Media Post).
The outlook is not necessarily gloomy as much as it is busy, and accompanied by a huge workload. Opportunities are currently available for the taking just as they are for the losing. The message is not (yet) one of widespread panic; rather, it’s to get smarter and better at pitching, fast.
Marketers’ motivations for conducting agency reviews have evolved. In 2015-2016, during the pitching frenzy known as Mediapalooza, $25 billion in media spending was on the table via multinational pitches (per international research company Convergence, in AdAge). At that time, marketers were primarily motivated by “immediate and bankable savings,” while today, they want agencies “to illustrate what measures they have in place to mitigate ad fraud and enforce brand safety,” says David Indo, ID Comms’ chief executive (in The Drum).
Other motivations for agency reviews include a desire for a variety of new agencies, simplification of agency rosters (per Tom Finneran of the 4A’s), frustration with their business results and needing greater transparency (per Greg Paull of R3 Worldwide), and even to glean more ideas via free spec work (per Greg March of Noble People) (AdAge).
The sheer number of pitches overwhelms
Shell, Asda, HSBC, P&G, Mars, Coca-Cola, Sky...who else is up for grabs? With so many accounts up for review all at once, the opportunity is overwhelming. There is opportunity to lose current clients, opportunity to gain new ones, and most of all, the opportunity to be utterly overwhelmed by the volume and requirements of multiple RFPs and pitch processes at once.
At the end of December, Ad Age ran an article titled, “Media Pitch Blues,” in which it discussed the major uptick in media reviews and media pitches. The very first sentence reads, “One week this year, a major media agency gave four pitch presentations to marketers and completed two RFPs over one five-day period.” That is the kind of opportunity that overwhelms.
Among the article’s other observations:
- A pitch today may involve as many as twelve agencies, with most of the major pitches in 2017 spanning six months, and some stretching over a year.
- The agency resources required to participate in so many pitches may end up undermining the quality of services marketers are searching for.
- Media reviews have become more complicated because media has become more complicated.
- In 2017, marketers finished about 160 media pitches (fewer than in 2016), according to research company Recma.
So, how to come out ahead with media pitches in 2018?
Here’s what the research and the experts have to say about how agencies can win media pitches this year.
Stand out on creative
Tony Walford of Green Square has said: “WPP has some great creatives sitting within its various agencies. It needs to push those to the forefront. There are huge pressures on driving down costs within agency groups, but one thing that cannot be commoditized is creativity. Most clients would be prepared to pay a premium for great work and WPP should be both pushing its creative credentials...” (The Drum).
This overlaps with what Ken Robinson of Ark Advisors said to us in an interview last year. When we asked Ken about any impressive or disappointing trends he’s seeing with the way agencies are pitching clients, without hesitation, he said, “Can we talk about media pitches?”
“I think what is disappointing in the past 18 months, I would say, is media agencies that are so hyper-focused on their data, analytics, and programmatic capabilities — they are so focused on their ability to provide efficiency in buying — that they have lost the thread of creativity in media…
I think that there is a lot of opportunity for media agencies to differentiate themselves creatively because you get to a certain threshold with pricing, and it ends up being parity. Whether it's pricing of the commission that they’re commanding for the buying or the pricing of individual spots. So you really get to a point where everyone is fighting to get to the bottom of low prices, rather than differentiating based upon creative....
I think that media agencies are not merchandising themselves appropriately. They have the creative talents in the agency. They may have the creative talents in the [pitch] room. I think they think their clients are really only interested in talking about the technology and the efficiencies. When, in fact, most clients consider that the cost of entry to be participating in the search. So [for media agencies], how do you differentiate yourself in other ways? And that those ways should be creative uses of media, not just efficient uses of media.”
Finally, Greg Paull of consulting firm R3 Worldwide has said,“The agencies that will do well in this [new] wave [of reviews] won’t do so just out of price, but more likely through big thinking and linking their fees to business outcomes,” (AdAge). Again, the differentiators will be the ideas, the creative, but also business outcomes.
Connect to business outcomes
Marketing Consultancy Vennli recently published a report, “Five Ways to Differentiate Your Agency Pitch.”
Here are some things they found about the current state of pitching which might inform your media pitch strategy for 2018:
- There is a massive disconnect between advertisers’ and brands’ perceptions about what matters during the review process. For example, only 13% of agencies believe they are winning pitches because of the “high value for cost” they project in their pitches, but 42% of marketers say this plays an influential role. So start focusing on delivering greater value.
- Primary research is a huge differentiator among agencies that win more pitches vs. those that don’t. Among the agencies that win more than 50% of their new business pitches, 89% say they use primary research when developing their pitch, but for agencies with win rates below 40%, only 64% say they do. As Vennli explains, the in-house marketer needs this data to prove to the executive suite that the marketing efforts will provide ROI. In fact, overlooking the research that demonstrates how your agency will back up their claims to increase revenue was identified as one of the biggest errors or missteps an agency can make when pitching.
- What does primary research include? 82% of marketers said they expect agencies to conduct primary research on their competitors as part of the pitch. However, agencies don’t consider competitive research as primary research, which causes miscommunication. If your agency does conduct competitor research, it is more likely to win pitches. Of agencies with pitch win rates above 50%, 60% of them always conduct competitor research, but only 44% of agencies with win rates below 40% do.
- And finally, back to creative and strategy. Agencies that take chances and surprise marketers with new, insightful, and innovative ideas for the company are much more likely to win the project. Agencies with win rates above 50% were much more likely to report that rethinking the client’s entire strategy was “extremely influential” in differentiating their pitch (41%, compared to 23% of agencies with win rates below 40%).
Read the whole report from Vennli here.
So there you have it: by differentiating on creative, connecting your ideas to business outcomes, and supporting it with data and research, you just may come out ahead (or at least break even) during what just may become Mediapalooza II.
Need some extra help building new business opportunities this year?
Read more about media agency pitching:
- How Media Agencies Are Botching Their Pitches: Insider Insight
- Factors That Decide the Pitch -- Aside From Creative
- 15 Questions to Answer Before Your Agency Responds to an RFP