Opposition is mounting against a scheme hatched by the Hong Kong
4As, requiring clients to pay a HK$20,000 pitch fee to help
defray the high cost of securing new business.
Both agencies and clients have criticised the plan, despite its
endorsement by the 100-member Hong Kong Advertisers Association (2As),
which comprises mainly banks and insurance companies.
2As chairman Anthony Lau (HSBC) said it was "not unreasonable for the
prospective client to bear a small portion of the cost" of a new
business pitch, which some estimates placed at between $30,000
and $50,000.
However, clients and agencies questioned the feasibility of the policy,
particularly its introduction in the early days of Hong Kong's economic
recovery.
"The fundamental problem is most clients in Hong Kong don't respect what
agencies offer and their role in the marketing process," said Mr Ian
Thubron, CEO of M&C Saatchi, a non 4As agency. While he applauded the
principle of the policy, Mr Thubron added: "If you address one symptom
of the problem - through pitch fees - I don't think it's going to work.
We should be reinforcing our value and worth to clients and
marketers."
Agencies were sceptical that the policy - requiring clients to channel
payment through the 4As secretariat before the presentation date - would
work in practice.
Pointing to the difficulties of getting clients to settle media bills on
time, they said it was unlikely that 4A members would turn down a pitch
request if the cheque failed to arrive as promised: "I can't see O&M or
JWT delaying a pitch because the fee wasn't paid on time," said one
agency chief.
Opposition has also been voiced by advertisers.
"The problem with charging a pitch fee is that the focus will be on
developing a lot of billings merely from the exercise of learning about
a client's business," said Mr Michael Geraghty, VP of marketing of Web
start-up emaimai.com.
"(A pitch fee) would reflect a lack of confidence in their ability to
get the business."
Mr Geraghty, who is in the process of agency selection, said only one of
the 11 agencies which pitched had mentioned such a policy: "I wasn't
surprised by their policy because I wasn't impressed by their
presentation," he said, adding that this agency failed to make it to the
company's shortlist of two agencies.
Coca-Cola, which recently put its multi-million dollar Hong Kong summer
promotion up for pitch, was equally critical.
"I see it as poorly executed if a company like Coca-Cola has to pay
$20,000 for each agency to pitch for its summer promotion,"
Coca-Cola Hong Kong country manager Scott Price said. To date, none of
the four agencies briefed by Coca-Cola have notified the soft drinks
giant that they plan to bill the company for the pitch.
Gillette Hong Kong business director Blanco Wong maintained the policy
needed to be refined.
"It wouldn't be reasonable for agencies to ask for a pitch fee at the
first stage," he said.
"Perhaps only agencies on the shortlist should be allowed to charge a
pitch fee, and there should be a minimum billing amount, like $5
million of business," he said.
See also story on page 3.
