VIEWPOINT: Life's a pitch ... and then you pay

<p>The Hong Kong 4As announced early this month that effective </p><p>immediately, all clients calling for a pitch would have to pay each </p><p>participating ad agency a fee of HK$20,000. </p><p><BR><BR> </p><p>The idea behind this move was prompted by calls from the industry for </p><p>precisely such a pitch fee, exacerbated by the regional economic crisis, </p><p>which meant that while agency costs were rising, revenue was </p><p>falling. </p><p><BR><BR> </p><p>Agencies often spend hundreds of thousands of dollars preparing for and </p><p>producing material for pitches, and a fee paid by the prospective client </p><p>obviously off-sets some of these costs. </p><p><BR><BR> </p><p>It is a logical solution and a noble idea, but as the saying goes, the </p><p>road to Hell is paved with good intentions. </p><p><BR><BR> </p><p>The devil lies in the details. </p><p><BR><BR> </p><p>How is such a pitch fee procedure going to be policed? </p><p><BR><BR> </p><p>Having long witnessed the silent abuses of the existing media commission </p><p>system, where agencies undercut each other in a desperate bid to win the </p><p>business, what is to prevent the same from happening with the pitch fee </p><p>system? </p><p><BR><BR> </p><p>Sure, the fee is to be collected and administered by the 4As itself (the </p><p>idea being that the money is then passed on to the agencies concerned), </p><p>but what is to prevent an agency from promising a client that should the </p><p>business be awarded to them, part of - or possibly all - the pitch fee </p><p>would be returned as a "thank you" gesture? </p><p><BR><BR> </p><p>Or what if one of the participating agencies opts for - and the client </p><p>agrees to - a simple credentials pitch? </p><p><BR><BR> </p><p>Does this put them at an unfair advantage over rivals to whom the client </p><p>is paying the fee? </p><p><BR><BR> </p><p>That the 4As is requiring the fee to be paid upfront and in advance </p><p>prior to the pitch presentation taking place creates another </p><p>dilemma. </p><p><BR><BR> </p><p>Say your pitch is scheduled for 8am on a Friday morning. Say that by </p><p>5:30pm the preceeding Thursday, the cheque has yet to arrive at the 4As </p><p>office. </p><p><BR><BR> </p><p>What then? Does the agency get a call forbidding it to proceed with the </p><p>pitch? Or to delay it? </p><p><BR><BR> </p><p>What if the cheque never arrives? The preparation has already been done </p><p>by the agency, the money already spent. Who is responsible for bearing </p><p>these costs? </p><p><BR><BR> </p><p>And with clients suffering their own financial problems related to </p><p>falling sales and the overall economic depression of the past two years, </p><p>being made to pay for pitches is likely to put a damper on the normal, </p><p>healthy activity of account shifts. </p><p><BR><BR> </p><p>For non-4As agencies, the imposition of a pitch fee for 4As agencies </p><p>might be a blessing in disguise. </p><p><BR><BR> </p><p>There are 20 agencies in Hong Kong which are fully paid-up members of </p><p>the 4As. </p><p><BR><BR> </p><p>There are hundreds which aren't. </p><p><BR><BR> </p><p>Sure, there are clients which specifically seek 4As agencies, but there </p><p>are probably far more who aren't particularly bothered. </p><p><BR><BR> </p><p>And let's face it - there are also hundreds of agencies who aren't </p><p>particularly convinced of the benefits or need to be a member of the </p><p>4As. </p><p><BR><BR> </p><p>And if a client realises there are savings of anything up to HK$100,000 by calling in five non-4As agencies to pitch, as opposed to five </p><p>4As agencies, then the pendulum might just be prompted to swing the </p><p>other way. </p><p><BR><BR> </p><p>But then again, if a non-4As agency is up against 4As agencies in a </p><p>pitch - is it fair that the pitch fee doesn't apply in its case? </p><p><BR><BR> </p><p>There are those agencies which would join the 4As, but for the minimum </p><p>income stipulation. </p><p><BR><BR> </p><p>No one is disputing the fact that a pitch fee is a good and necessary </p><p>idea. </p><p><BR><BR> </p><p>The problem lies in making it a blanket rule for all 4As members, </p><p>instead of simply a recommendation, left up to the agency's own </p><p>discretion. </p><p><BR><BR> </p>

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