£38,000 average annual cost to pitch if UK design agency
by oneafrikan
There are an estimated 4500 commercial design agencies in the UK – 56% of which employ less than 5. The research results demonstrate that an average £171 million is spent annually on free pitching for a sector that recorded a fee income of just over £4billion in 2004/5. The research also showed that 26% of all free pitches/tenders are not awarded due to ‘change of marketing direction or lack of budget on the part of the client.
There’s an interesting thread running on the cost of pitching for design agencies in the UK, with some real research done to back up the gut feel.
Personally it irks me that someone (who is supposed to be in business too) can expect to get time for free, for a pitch from any agency. It just doesn’t make sense. Some people call it a cost of doing business, and others write it off as a necessary expense in a crowded, commodotised market. This all may be true depending on where you sit, but I think it’s done because people let it happen. I mean, if you call out a plumber to have a look at your plumbing, you pay a call out fee.
Anyways, what do you think – necessary cost of business, or irritating expense?
I definitely think pitching is one of the most annoying things about our industry. How many other professions do work for free!? Part of it is our own fault though, as we try to out do each-other by producing better work/ideas than the other agency/s on a roster. You’d think the industry might grow up sometime and stop all this craziness. I certainly hope I don’t get into the pitching process when I start my own agency. It will be hard to avoid though as, sometimes, some of the nicest work comes about via a free pitch.
Are we all just a donkey being enticed by a carrot in front of us?
I think so Ryan – I can think of many times when there’s been the old tired line of “… and there’s much more work to come down the line if you guys produce good work, but do this for us first…” when all that really happens is that you either get squeezed further, or never hear from them after sweating so much to produce good work.
I think it’s also partly the agencies fault, and the industry as whole, ‘cos creative work is not really something that you can put a time to – a great idea can happen anytime, but the client is effectively buying those ideas for their vision of work time, so how do you charge for it if the designer thought about it in the shower…. the more shrouded in mystery the industry is, the harder it will be to justify costs… and perhaps that is why the digital medium is growing so fast, ‘cos you can measure a ROI better than a in a TV ad or a magazine advert etc…
This is not a unique problem to the design industry.
Call them design pitches, proposals or tendors, it doesn’t matter, often these are done free of charge yet cost the proposing company man weeks of time and money. This happens in creative design, software development , facilities management, and engineering and probably most other industries to boot.
An unfortunate reality. The difference is when the client awards the job he has a better understanding of what he is gettiing and a formal document or design that can be used in dispute negotiations. No such luck with the plumber. Perhaps he fixes the problem, perhaps not. You might be calling another one out the following week!
Yea, true.
I’m not sure that it happens in too many other industries ‘tho. Sure, software, web dev, design all have an aspect of “free pitches”, but perhaps that’s due to the relative immaturities of the industries. You wouldn’t ask an architect to design your house without paying him.
I’m not sure what the answer is, and I think for many scenarios there are differing answers, but the common theme is that clients get intellectual property for free – which doesn’t sound like a fair deal.
Perhaps it’s a function of how established a service provider is, and how much they can turn away work, rather than the industry they operate in?