Vietnam is beginning to earn a reputation for being the oddball of the region when it comes to pitches.
Last October, the industry was left wondering whether Vietnam Airlines was being serious when the carrier asked agencies to pay for the privilege of pitching.
When most agencies said thank you, but we won’t be putting US$3,000 into your bank account, and the pitch collapsed, the affair was consigned to the history books as a peculiar one-off.
Amazingly, however, history repeated itself a few weeks ago when S-Fone, one of the country’s largest telco operators, asked agencies to do precisely the same thing. The winner would get the money back, but only if its work lived up to the client’s expectations.
Is their method to this pitch-fee-in-reverse madness? Or is this just a symptom of a young market with a bit of growing up to do?
1 A bit of both, most likely. Agencies paying clients to get on a pitch list is, in fact, nothing new. In sensible Singapore, believe it or not, there was a period during the 1980s when large, often Government-linked clients (as is Vietnam Airlines), insisted agencies pay them a fee to get access to a tender.
“It was at the time when media unbundling had started,” remembers Patricia Lim, the MD of PHD Singapore. “A lot of new agencies were entering the market and things were starting to get competitive.” Sound familiar?
“Clients didn’t want any Tom, Dick or Harry pitching for their business. So they asked agencies to pay a nominal amount if they wanted to pitch to show they were serious. The winner would claim the business, and the losers would be paid back. It was perfectly sensible at the time, but was scrapped by the time the big multinational agencies had rolled into town.”
Currently, only MindShare and ZenithOptimedia have a significant presence in Vietnam.
2 Transparency, or lack thereof, is a bigger problem. While no senior executive at a multinational agency will admit to being solicited by a client with a briefcase full of greenbacks, this sort of thing has been known to happen in local media pitches - which is why local clients tend to stay with local agencies in Vietnam, say sources.
Marketers will not want to follow the example of Procter & Gamble in China, which had to fire lots of people after discovering shady dealings in 2000. This proved a watershed for media transparency in China. Peversely, however, Vietnam often suffers from too much transparency. A client may discretely tell his friend about the rates and discounts an agency has offered him, and within a few hours every client in town knows these numbers as well as their own phone number.
3 Clients who ‘want a media plan tomorrow’ is common in Vietnam. And without any brief or background on the business. “Often all clients want is an execution plan,” says Nicole Vooijs, MD of GroupM Vietnam.
“We are treated as suppliers, and are put through the same process as a construction company.”
The same applies in Cambodia, an even younger market. Marianne Waller, the country head of BatesAsia Cambodia, says that clients often go from agency to agency asking about rates, without telling the agency they are pitching. The other extreme is pitches where agencies are asked to present in the same room, cue boisterous heckling between rivals.
4 So are there any rules of engagement for pitches yet? Vooijs laughs. “We have our own guidelines, but I have yet to see a local client with anything like a pitch code.” While better rate comparisons and cost analysis are sorely needed, it is probably too early for pitch intermediaries such as R3. “In a market heavily focused on cost, there is no need for consultants - who tend to overcomplicate things anyway,” she says.
5 Being young is not without its advantages. Vietnam may be small, but this means agencies get access to very senior people who take pitches very seriously, especially if they are spending a large portion of their budgets on media.
And in a market so young, it is important to keep things in perspective. Rose Leng, the head of marketing at HSBC Vietnam, concludes: “FMCGs have been in Vietnam for 15 years, at least. There are some relatively experienced marketers around. Financial services, however, are something entirely new.
Agencies here should think themselves lucky.”
What it means for…
Agencies
- For now, international agencies are just going to have to be selective in the pitches they go for. S-Fone is a US$3 million account, which is considerable for Vietnam, and not to be sniffed at. Which is why MindShare is considering going for it - if the pitch ever gets off the ground.
- Incidences of agencies paying to pitch will probably fall once the market becomes more competitive. GroupM currently controls roughly one quarter of the market, but it would benefit in the long run from the entry of international rivals such as OMD, which is set to launch this year. More players would force the quality of pitches to rise.
- Agencies should think themselves lucky that online media buying auctions haven’t reared their heads in Vietnam (as they have in Thailand and Indonesia) yet. But in such a price-focused market, it would be brave to bet against their arrival sooner or later.
Clients
- Clients would benefit from some form of pitch guidelines - how to write a solid brief, a reasonable timescale for a pitch, the appropriate number of agencies to invite, and so on. Problem is, there is no 4As in Vietnam to organise this, and it may be some time before the media owner-run Vietnam Advertising Association sees real value in introducing guidelines.
- Meanwhile, it is probably 10 years too early to expect the introduction of the sort of pitch fees where clients pay agencies, which have been introduced in Thailand, Malaysia and now Indonesia.
- The beauty of Vietnam is that it is in a great position to leapfrog the problems that bedeviled China 10 years ago. Who’s to say that Vietnamese clients won’t soon lose their fixation with discounts and judge agencies on people, tools and communications planning?
