Pitches, rate card and 2020

An adman’s case against what he insists is an archaic arrangement between agency and client – the rate card.

How many magicians does it take to change a light bulb?

Hold on to this question, the answer to this question has immense similarity with the advertising pitch process. The advertising pitch process has been broken for long, but now, it’s beyond repair. Post the (COVID) pandemic and the way the whole industry is moving, I see no hope that this will ever be fixed.

This is 2020, and if it had to be fixed, it would have (been) by now. The advertising pitch process is broken for two reasons. One is client. The other too is client. It’s the clients who have ground the agencies to dust.

Be it any form of communication agency, clients find a way to meet, brief, hear, hear again, negotiate, and negotiate again to hopefully choose an agency. These are the better clients. They, at least, choose an agency, award the mandate, and work with the agency.

Yes, they can do it better. They can reduce the number of agencies they meet, they can put out the price before they go shopping, and they can save time and money by not meeting a whole spectrum of potential partners. Somehow, clients do not believe that time is money, and often agencies can’t charge for time.

How did the whole marketing department find time to keep meeting agencies over five months, is beyond comprehension. That they could find over 30 like-minded potential partners, and found time to meet them is a clear indication of not having a brief in mind.

This is not an isolated incident. Clients enjoy the feeling of importance, and the fact that agencies chase them. If ever they are evaluated for efficiency by their organisation, they will all lose their jobs.

There is a third kind that I have just discovered, and they are making the most of the trying times we live in. There is a large client who announced, through trade portals, that it is looking for agencies, preferably independent agencies. In the client’s opinion, the independent agencies are faster, and respond better to the changing market scenario.

I am sure many agencies reached out to them, we did, too. We got a brief back. The task was to sell one of the most expensive flats in Gurugram. The kicker came later when the client said that they won’t pay any fee to the selected agencies, and that they will only pay by rate card.

The rate card system is an archaic concept; it’s a throwback to the days when agencies used to charge a commission for a media release. In those days, a rate card was used to cover the cost of the artwork and non-media commission creative pieces.

For example, if an agency had to do retail POS, it would charge for design and artwork using a rate card. This was always in addition to what the agency was compensated, in the form of the media release commission. Essentially, the rate card system was a way of compensating an agency per ad/creative.

Today, the media release commission has been replaced by a project fee, or an annual retainer fee. Most new agencies may not even have a ‘rate card’, as they do not charge a commission on media release.

Rate cards went out of fashion two decades back, and I am sure clients know this. To ask agencies to pitch and charge by rate card is trying to make artworks using negatives and bromides and cut-paste.

This is a clever client, it made it clear that agencies need to be better, faster, more creative, and work for free. After all, the client is such a big name that the agencies will be proud to have its name on the roster! This type of client does not want agencies that are good, it wants agencies that are cheap, even if the product is India’s most expensive one.

There is a set of clients who won’t mind charging agencies for handling their brand. There is a fourth kind of clients, and we are lucky as an agency that we have a few of them that we work with. This set of clients values its time, they know what they want, they choose their agencies carefully, and then stick with the choice they have made. They form an enduring bond with the agency. The agencies will give their lives for such clients. Sadly, they are so rare that you can count them on fingertips.

So, back to the original question: How many magicians does it take to change a light bulb?

It depends on the light bulb – on what it wants to change into.

What if the light bulb called for a pitch?

(The author is co-founder and chief strategy officer of Bang In The Middle.)