In the first of a four-part series on what it takes to run successful pitches online, Ebiquity’s managing director for continental Europe, Laetitia Zinetti, explores the state of pitching in the virtual environment forced on almost all advertisers and agencies this year by Covid-19.
The coronavirus pandemic has changed where and how most people working in the knowledge economy do their jobs. In the UK, lockdown meant the proportion of the working population working from home went from under 10% to approaching 50% overnight. And although offices in many markets have started limited opening, most are unlikely to be at more than 25% capacity for at least the rest of 2020. Some may never go back to how they were just last year.
New ways of working
In marketing services, advertisers and their agency partners have seized the opportunities offered by technology to continue – and in many cases strengthen – their partnerships. Issues that before coronavirus might have waited for weekly status calls or monthly face-to-face meetings have often been addressed in quickly set up video conference calls. Working under the commercial pressures and extreme conditions of lockdown has been intense, but for many it has been possible to maintain the established dialogue and rhythms of their business without team members having to step outside their front doors.
In May 2020, at Ebiquity we ran and published a survey of almost 100 brands with combined media spend in excess of £2.5bn. We found that almost four in five advertisers rated their media agencies “very good” or “good” in helping them to adjust to trading conditions under the pandemic. Approaching three in five said the same of their creative agencies.
The pitch and agency selection market in 2020
When the pandemic hit, many advertisers paused or stopped pitches altogether, cutting the number and value of advertisers’ business under review. Global data from COMvergence show that, as a result, in the first six months of 2020 across the world, just under $8.7bn of media business has been pitched across just over 1,000 clients. This represents a fall of 46% compared with H1 2019, when almost $16bn of media business was pitched.
Other trends identified in COMvergence’s analysis of the agency selection and pitch market in the first half of 2020 include:
Food and beverage brands were the most active categories looking for new agency support. These sectors remained relatively buoyant, even under full lockdown, with online and offline retail performing well. Globally, Amazon recorded its best ever quarter at $45.8bn, a 49% increase in sales year-on-year, while in the UK, leading supermarket delivery business Ocado grew 45.5% in the 12 weeks to 9 August 2020.
Despite the collapse in global travel, some travel brands took the opportunity to tender their business, along with several airlines and government tourism brands.
Where brands are pitching, change is in the air. Post-pitch retention rates by incumbent agencies fell from ~15% in H1 2019 to just ~11% in H1 2020.
There are more pitches taking place in China (27% of all pitches in H1 2020) and the US (26%) than in any other territories.
A small percentage (3%) of brands that had been in-housing ad tech have moved back to outsourcing via their agency partners, which is attributed to clients seeking to manage costs and cut overheads.
So, the agency selection market has shrunk significantly during the first half of the year, with some categories worse affected than others. Pitches are more likely to be local and regional than global, although there is some evidence that brands are using the pandemic to take the time to fast-track wholesale digital transformation. A report from the International Data Corporation predicts global spending on digital transformation tech and services will grow by more than 10% to $1.3tn in 2020, despite the challenges posed by the pandemic. In part this is likely to be a response to marketers observing the robust performance of online-only and omnichannel retail brands during an otherwise turbulent year.
Periods of great turmoil usually lead to fast-track innovation, and the coronavirus pandemic is no exception. Established practices – held dear for generations “because that’s the way we do things” – are more easily cast aside without sentiment. Advertisers and agencies that recover and grow in new partnerships in the wake of coronavirus will be those who forge new – and reinforce existing – partnerships driven by this renewed spirit of innovation.
A critical part of this will be for brands to have the resilience to create new ways of working that are focused on business transformation and growth not solely on cost. This is particularly challenging at a time that many chief finance officers are looking to recoup cost in the short-term, at the expense of marketers putting in place plans and new agency relationships that will enable their brands to thrive in the medium-to-long term.
Although pitching stopped around the world when lockdowns were introduced, brands and agencies have in recent months started to run pitches once more, with agency and technology partners able to respond to briefs and present their credentials and capabilities online. What historically had almost always – at least in part – been delivered in person has been compelled to take place online. Just because there’s a global pandemic doesn’t mean that advertisers don’t need to refresh their roster of agency and technology partners or, indeed, change their lead agency altogether if the incumbent is no longer fit-for-purpose. This is particularly true for brands as they look to rebound after what seems certain to be the deepest and most sudden recession in living memory.
In normal times, there is an etiquette and there are established norms of good behaviour expected of both advertisers briefing their agency partners and receiving pitches and proposals from agencies, as well as of agencies pitching to brand teams. Engagement, responsiveness, and full attention is expected from both parties throughout the process, as is courtesy, providing a fair opportunity to convey ideas, and a level playing field for assessment of proposed plans of action. Often several agencies will tender for the same piece of business, and agency proposals should be considered on equal terms. This is true whether pitches run in person or virtually.
The role of consultancies
Advertisers and agencies are not the only parties involved in the pitch process. Expert media and marketing consultancies are often contracted by brands to run the pitch process on their behalf, particularly for complex, multi-market or global agency pitches. The consultant’s role is as an informed, honest broker to ensure that due process is followed, that the best possible array of prospective agencies present their capabilities to their clients, and that the right choice of partner is made.
Consultancies have also had to adapt to this new age of virtual pitching, and in some cases, brands are relying on consultancy partners more now than they did before the pandemic to ensure that the right choice of partner is made, to manage the new online process, and all under what can often be strained and challenging circumstances.
Pitch and media management consultancy Ebiquity has published a comprehensive guide to virtual pitching. Download it here.
In tomorrow’s article, Ebiquity’s managing director for South East Asia, Leela Nair, shares a series of tips and tricks for brands and agencies on how to make the most of virtual pitches.