Danny Bass: Media agencies give away too much for free

Rosie Baker
By Rosie Baker | 27 April 2016
Danny Bass

Pitches can bring out the best, and the worst, in agencies. It can be a race to the bottom with promises made on fees that are then hard to deliver on or make a profit on. It's an oft-cited blight on the sector, but Danny Bass, CEO of IPG Mediabrands, says that if agencies invested as much in existing relationships as they do in pitching, more doors would be open to do bigger things for clients.

With so much business currently out to pitch in the market, there’s a lot of stress on agencies pitching for new business and to retain existing clients. IPG Mediabrands is no exception. And while Bass declined to talk about current active pitches, UM is pitching to win Tourism Australia’s business at the same time as holding on to Coles – its largest account.

“Pitching is incredibly stressful on a business. Even a small pitch can pull your best people off to the side for quite a while. When you start talking about the big pitches that could last for six or seven months and then you overlay international pitching as well, it’s a big job. We have got to get better at how we’re pitching and understanding why we pitch,” Bass told AdNews.

“What we’re doing here is taking a really good look at the reasons for pitching, who we put forward in the group to pitch and how our non-media agency businesses can lead some of these pitches. As RFPs get more technical and more digital, the role of our other businesses becomes really important so we’ve got to get smarter. We’ve got to make sure that we’re not duplicating up on work.”

For more on the future of media agencies, check out the AdNews Media Summit. You can buy tickets here.

The strain isn’t just in winning the business, on-boarding a new client can be equally as demanding, and it puts pressure on the work done for existing clients, so while pitching is the lifeblood of a business, Bass says he’s “comfortable” if any one of IPG’s businesses wants to stop pitching for six months or a year, as long as there’s good reason. There’s already been business this year that the group has declined to pitch on, he says.

“We will always pitch, there’s no question about that. But we will have more educated, measured and long-term planning around how, and what we pitch for,” he says.

His perspective is part of a bigger picture view, all wrapped up in where agencies put their focus, what they get paid for and the kind of conversations they want to be having with clients. Bass believes media agencies need to stop giving away their IP and thinking for free. And it’s not just IPG Mediabrands he’s talking about. It’s the same argument that Scott Whybin, founder and former chairman of Whybin\TBWA, is making in the creative space.

“If I think about the work that we do, It’s world-class, but if you look at what we deliver that’s out of scope, we probably don’t get fairly remunerated for it,” he says. “I can only talk for Mediabrands but I’m confident I can reflect this for the industry. There has to come a time when it stops. Look at the people who have come into our industry, the professional services and some of the tech companies, they don’t do that.”

“They are masters of charging for the work that they do because that’s how they’ve built their businesses. And if you were to bring in three professional services companies and give them the same brief, I would be pretty confident that almost to a dollar, they all charge the same thing because they know a fight to the bottom doesn’t help anyone.”

“We, as an industry, forgot about that. We’ve got to learn to say no. In my experience when we sit down and explain what we do and we explain what’s in scope, most clients are very understanding. It’s just maybe at the initial RFP stage, that to win the business promises are made and they have to be delivered for the next three to four years. So certainly from Mediabrands' perspective, we have to stop doing that and I’d argue, from an industry perspective, we have to stop doing that and putting value on what we do.”

To play in the same space that consultancies do, he wants to broaden the relationships IPG’s agencies have with clients beyond the CMO and into the board level directly with CEOs and CFOs.

“When I look at the investment that media agencies put into pitching, if you were to put half of that time and effort into existing business, that strengthens your relationship,” Bass explains. “Does that get us to a point where we can start challenging for other pieces of the business [beyond media]? I think that it does.”

For more detail on Danny Bass’ plans for IPG Mediabrands, read the whole interview in the next print edition of AdNews. You can subscribe here, or get it digitally on Android and Apple devices via Zinio here. You can also get the iPad version here. 

Bass will also be the closing speaker at the Media Summit on 19 May. You can buy tickets here and read more about the panel debates.

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at rosiebaker@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day. Need a job? Visit adnewsjobs.com.au.

Read more about these related brands, agencies and people

comments powered by Disqus