It’s simple, if you want to find an ad agency that will work for free, just say you are having a new business pitch and your account is worth 10 million in revenue, or even 1 million, for that matter, and you can have several award winning agencies work for you for free.
My first new business pitch was for a high profile cracker account. Even though the account itself wouldn’t be a huge money maker for the agency, the parent company had many accounts the agency was interested in.
The agency asked its top creative duo, a senior leader in account management, and the strategy head to run the pitch. As the lowest team member assigned to win the business, I was basically a glorified errand girl. Behind the scenes, we had at least twenty more team members doing everything from concepting creative to creating video content. If you haven’t done the quick math, our agency would be spending 2-3 thousand dollar per hour, for every hour the group worked on the business.
A flurry of internal meetings ensued. We saw rounds of creative work with crackers dancing, crackers holding food, stacks of crackers being toppled, and on and on. Crackers were served at every internal meeting and quickly my lunch and dinner became crackers. We were crackers 24/7 for a month.
The day before the meeting, we went to the conference room to construct an elaborate show. A set was built to showcase our creative work and we hired a famous singer to present our top creative territory. The singer charged us twenty thousand dollars for an hour of his time.
We did well. Clients were smiling as the singer broke into a familiar tune. We thought the win was ours.
A week later, AdWeek announced another agency had won. The client would be giving all the crackers to XYZ creative.
As the manager of the budget, I was keenly aware of what we spent. During the pitch, no one asked about it. We just spent, knowing a win would mean it would all be worth it.
But we didn’t win. Instead we spent $60,000 in hard costs and over $150,000 in man hours.
So, why do agencies agree to pitch new business? Do they have enough of a slush fund from marking up other paying clients? Do they ask their employees to do the work of multiple people because they can’t afford to pay for more? And if they win, would they charge a premium to cover the $150,000 already spent on the pitch?
Yes and yes and yes.
Sure, you can find an agency that will work for free for a new business pitch. The problem though, is that the money has to come from somewhere. Since I’ve never seen a salary for a holding company CEO decrease, it will most likely come from the team members you just hired. They won’t have enough people to run your business or if they do have enough, they won’t be paid well enough to stay for very long.
After years of seeing the same cycle happen, I have some advice.
Pay your agency for new business pitches or simply just do a project as see how it goes.
It doesn’t have to be very much, but enough so that you are committing to actually picking a new partner (yes, I’ve worked on pitches that are never awarded.) The agency will start out with a team that is happy, ready to dive in, and stays working on your business after the "new business" honeymoon is over.
Trust me, it will be worth it.