Tag Archives: pitch fees

New Survey: European Clients More Likely to Pay for Pitches

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In what has been a hotly debated issue for years within the broadcast design community, we now have new information comparing pitch compensation in the US and Europe. Although the 2009 study (conducted by Worldwide Partners) takes a look at pitch fee structure for traditional advertising agencies, it nonetheless offers a rare comparative glimpse at the two leading markets in the world.

The results? The survey found that European ad agencies were more likely to get compensated for ideas presented during new business pitches than shops based in the US. From my experience, it does seem like US design firms are a bit more willing to engage in no-fee pitches. Reasons for this vary. One possibility could be the large number of shops competing at any one given time in the mega client LA & NYC hubs. As such, if more agencies are throwing free boards at a prospective assignment, clients may be less apt (and less able) to compensate pitch participants.

Some more crunchy data from the study; of the agencies that responded to the survey, nearly half, 49% reported rarely or never receiving compensation from clients.

Only 5% in North America reported getting pitch fees, while 56% of agencies based in Europe said marketers offer remuneration for new business pitches. The pitch compensation structures varied, from a flat fee of about $5000 to a fixed percentage of the contract amount. And again, although these figures are based on traditional ad agency reviews, it nonetheless supports similar observations in broadcast design/branding industry.

I must add (in defense of US marketers), however, that I have had a great number of clients in the US that have compensated for boards through the years. Further, the consensus seems to be that main titles and channel identity assignments have a higher paid pitch percentage over other types of projects.

On a positive note, as I see it, the market continues to offer chances for smaller shops to win hotly contested midline ($75k-$150k) assignments. It also provides unique opportunities for broadcast design & branding shops to pick up previously ungettable direct to client branding work that just doesn’t fit the old ad agency pricing model.

Do you have thoughts on this issue? Send your perspective to denny@dennytu.com

*I have received a number of responses to the original publishing of this story. For more perspective on this article, you can read a few reader responses here.

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Reader Response to “Paying for Creative Pitches”

It’s 12:25 AM.

After a fully packed day of meetings and presentations, I’m finally settling in for the evening. If you’re a regular reader/subscriber, you already know that yesterday’s post took a look at pitch fee compensation in the US & Europe. Just 24 hours, and over 2 dozen emails later, I get the sense that many of you have something constructive to say on this issue- a genuine desire to contribute to the conversation. Most of the emails were from the agency-side of the business, however I did get a handful of client-side opinions that were thoughtful and enlightening, especially against the backdrop of new economic pressures felt across the channel-sphere. In the spirit of “real talk”, I thought I might share one such letter that came from Greg Duncan, who many of you may remember from NY-based Verb. Please note that his perspective is provided unedited (as it should be) and published with his consent (I’ll always ask before putting your name in lights).

Response to “New Survey: European Clients More Likely to Pay for Pitches”
By Greg Duncan

Denny,

I’m really enjoying your blog. Our industry suffers from a profound lack of communication (and industry standards) about these topics; BDA suffers from being both client- and vendor-focused at the same time and blogs like Motionographer seem to simply showcase the latest new trick from the latest new design stars.

The pitch fee compensation article is fascinating. I can’t believe that half of the respondents said they never receive compensation for pitches. At Verb, we were paid for probably 80% of pitches, and we stopped doing free pitches for the last couple of years. Often, clients would say that they had no money for the pitch, and we’d just hold firm to $2500 – $5000 (occasionally $1K for something tiny). I would estimate that half the time the clients would come back to us with money.

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