After conducting a thorough survey on the participation in pitches by its members, including the hours invested and out-of-pocket expenses, ACC, in partnership with UBA and PitchPoint, is unveiling a whitepaper on the direct and hidden costs of pitching for agencies and clients.
Image: ACC
62 agencies, divided across 6 disciplines, provided a wealth of pitch information. On average, an agency in 2023 did spend €412,000 on pitches (out-of-pockets + hourly costs, calculated at a rate of €113/hour). This amounts to a significant 9.7% of the average gross margin. In other words, nearly €10 of every €100 that a client pays their agency goes towards pitching for another client.
In the advertising/full-service agency sector, even more extreme expenditures are seen, with an average of 664K per agency, representing no less than 83% of the pre-tax profit (PBT) of an average agency.
The Whitepaper organizes all the details of the research and provides advice from ACC, UBA, and PitchPoint on limiting direct and hidden pitch costs; optimizing the pitch process including pitching without conceptual executions; experiences with pitch consultants; and the benefits of regular evaluations, including tips & tricks on how to conduct evaluations effectively.
"Pitching with agencies is a healthy process. It fosters competition and stimulates creativity and strategy. The pitching guides from UBA and ACC provide a valuable framework for carrying out pitches transparently, efficiently, and with integrity." says Luc Suykens, CEO from UBA. "While advertisers often think that pitches are free, the associated costs have an indirect effect on the agency's overhead expenses. Advertisers can reduce these costs by investing in a sustainable relationship with their agency."
You can download the Whitepaper here.
PitchPoint helps brands find an agency that understands their needs and helps them create long lasting effective partnerships to increase the impact of their marketing budget. Contact mia@pitchpoint.be for a no-obligation discussion on this.