It's rough out there for new business. There's plenty of new work, but it's slower to close, leaving agencies, clients and CFOs second-guessing themselves. Magnifying the slowness is the current trend in RFP format experimentation. It's not uncommon to dig a little and find out that your potential client isn't talking to three or five different shops; it's talking to 20. And sometimes it's doing it on Twitter.
A brand using cheap digital media to reach out to agencies gets faster results on the front end, meaning it gets a bunch of creds and ideas in the door. But it fattens up the middle—everyone writing and reading the proposals—and in the end this leaves us with longer cycles, more work to get the work, and a bunch of employees stretched really thin. The client loses, too. I mean, how can they possibly have time to really look at 20 or 100 proposals?
I can't help but wonder what would happen if every brand started running its pitches like Zappos or Current. Would people still spend thousands, tens of thousands or hundreds of thousands of dollars on a pitch if they knew how many competitors they had? If the big agencies start having to run 50, 100, or even 200 pitches a year, how much would they spend on each of them? The profit implications are obviously huge, given what agencies spend now.
No one is immune to the current environment of tougher pitches against an ever-increasing pool of agencies. I was struck by something the other day, however: A company with roots in production is a bit more used to this than traditional agencies because many run some 200 pitches a year as a matter of course.
The agency model has been based on long-term, multi-year (or decades) ownership of client relationships, while production shops have always been more like temporary associates. That is why production companies traditionally don't spend as much time on the upfront part of a pitch because they know they're probably only on for a project. But most agencies really aren't holding on to clients these days anyway, and the costs of courting a hopeful marriage that turns out to be a date add up quickly.
Logistically, production houses have some advantages, as anyone who's spent any time with a producer at a top-notch video production company knows: They can price and scope in no time! For instance, we give clients some top-level ideas and talk to them a lot without spending thousands on mocking up everything and shooting brand essence videos. Admittedly, however, due to volume they're more like creative treatments than they are a pitch or full proposal, so we run the risk of looking like we don't care about the account.
We often talk about production companies trying to become agencies, but it's pretty clear to me we're all working towards building a new kind of organization. We bring with us our individual strengths and weaknesses. Clients have said they're looking for new and different approaches forever, but now they seem to be putting their money on it. The economy has hit them in their wallets—they're looking for efficiency and innovation now, not just talking about it. They need to worry, though, that the trend to seek out as many agencies as possible could result in shrinking attention spans on the parts of those pitching. Wouldn't they want people who think intently about their brands?
This pitch chaos we're currently going through is symptomatic of a larger issue: We're in a period where a lot of things are crossing paths. Agencies are getting more digital, digital shops are getting more like agencies, clients are hiring and using digital techniques. Above all else, what I think we're experiencing is that there's not an easy, repeatable formula for the right answer. It's increasingly custom work. You have to reach wider in hopes that you luck into finding someone who happens to have the latest attitude in communications techniques that matches up to your current problem.
I think, however, that this is all a phase. Nobody with half a brain actually thinks a good idea in the long term is for brands or agencies to be spreading themselves too thin. But it's a necessary and productive phase. What's really happening is a big regurgitation of the old ways because they aren't really working anymore and a lot of experimentation in terms of what might be the best new way. And the best new way, I would guess, is going to be a lot of different ways.
It's a fun challenge. Advertising is more of a free market than it's ever been. There are a ton of opportunities for new types of organizations to participate and for those that can't to be weeded out. And we're demonstrating the power of networked thinking. I could be wrong, but I can see the new, new business bringing about an era that we all claim to want. Perhaps it'll bring about an era where the best idea wins, no matter who has it.
Benjamin Palmer is CEO and co-founder of The Barbarian Group. He can be reached at Benjamin@barbariangroup.com.
--Nielsen Business Media