The company, which had previously invited several agencies to pitch for its LA Lights brand account, has gone silent on the pitch fee issue, resulting in withdrawals by three agencies: Ogilvy & Mather, Publicis and Hakuhodo.
A total of 40 international and local agencies in the country, which are members of its advertising industry body PPPI, have signed the protocol of pitching that requires mandatory pitch fees. Collectively this group is known as Caucus.
DraftFCB, the only international agency that has not joined Caucus, is still in the running for the Djarum business along with several small local shops.
Irfan Ramli, secretary of PPPI said: We cannot force an advertiser to pay a pitch fee. The Caucus will be meeting in the first week of September and we will discuss and decide ways to deal with situations like these.
He pointed out that Caucus has been extremely successful so far, and has managed to convince a large number of big advertisers to pay a pitch fee.
Political party Golkar, Indosat, Pertamina, Sampoerna, Gudang Garam and PermataBank are among the big companies to have paid a pitch fee recently. In the case of Golkar party, which had called 23 agencies, a pitch fee was paid only to agencies that are a part of Caucus.
Djarum was previously handled by Dentsu Indonesia, which resigned the account earlier this year.
Djarum LA Lights competes with Sampoerna’s A Mild, Nojorono’s Clas Mild and Gudang Garams’s Surya Slims and is the third most popular brand in the mild cigarette category.
In the first semester of this year, Djarum spent 20 per cent of its ad budget on LA Lights while competitors Sampoerna and Nojorono spent 42 per cent and 94 per cent on their mild brands, respectively.
Djarum ducks pitch fees in Indonesia
JAKARTA - Djarum, Indonesia's third largest cigarette-maker, has become the first advertiser to refuse to pay agencies a pitch fee since a protocol on pitching was introduced by the Indonesian 4As late last year.
