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Noorings: And the business goes to the incumbent…

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Noorings: And the business goes to the incumbent…

The year 2010 has seen some of the most high profile media pitches/ reviews of recent times – General Motors, Bharti Airtel, L’Oreal, and not to forget, Unilever. While there also have been pitches that include the likes of Multi Screen Media, Zee Entertainment Enterprises Ltd or even a Colgate, where the business did land with a new partner, for some high-profile clients like Unilever, GM and Airtel, the incumbent has prevailed (of course Unilever did tell Mindshare that there are other options when it handed the digital part of the business to OMD). But that aside, one would wonder whether clients have begun to take the pitch process for granted.

I was speaking to a senior media agency professional over the weekend enquiring if that particular agency would be participating in a recently announced ‘high-profile’ media pitch. The agency professional said, ‘not sure, in any case I don’t know if we should invest our time and money in such pitches, where it doesn’t look like the business is going to change hands’.

Now, that is not an unusual thing to hear these days, which indicates the gravity of the situation. Many media agencies are speaking about situations where clients have called for elaborate pitch process, and where given the size of some of the businesses, the top managements of agencies have been involved day in and day out in the pitches. Then after everything, the client announces the decision in favour of the incumbent. Most agencies have not had a problem with that (God knows, they would like to retain the business if one of their clients had called for a pitch!) until they realise that by the end the discussion seems to be all about rates.

Another senior agency head was telling me ‘one would assume that a client as sophisticated as GM, Airtel or even Unilever would have done some due diligence on their existing agencies and then called for a pitch, but some of these processes just look like they are happy to work with the incumbent so long as the incumbent brings the rate down some more’.

The side of the profession that I am in, it is near impossible to take these conversations forward, lest there is something to substantiate it. And between NDAs (non disclosure agreements) and the potential of working with that client at some point, there is nothing ‘on-record’ about these “practices”.

At one level, one is encouraged that the new generation – leaders like R Gowthaman (Mindshare) and Ajit Varghese (Maxus), among others, are vocal about this obsession with rates, and the fact that clients are not bothering to see what value addition an agency is doing. And that decision makers of the industry like Sam Balsara (Madison World) and Shashi Sinha (Lodestar UM) are aggressively looking at discouraging any suggestion that would hurt the industry. But at another level, one still wonders what it would take for media agencies to work together.

In his recent visit at the exchange4media Conclave, Irwin Gotlieb (GroupM) had said in a conversation with us that these things were damaging to the growth of the media service brands business. Clients who called for pitches or reviews were equivalent to employers asking employees to prove that they are worth working for that company, and when you do that, you hurt a relation. Pitch process cannot just be an annual affair that had to be done – they should be done when there is a reason to look out, and then you should have an even stronger reason to stay back with the same, or move on to a new, relation.


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