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By Invitation Only – Motive
ACA Code of Conduct pitches and tenders slider

Motive: Tenders, pitches and the ACA Code of Conduct

  •   2 Jun 2016
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by Odette van der Haar (@odette_roper) “Ubuntu”, a Zulu word, pronounced “oo-boon-too” means a lifestyle or unifying world-view (or philosophy), based upon respect and understanding between individuals. This is exactly the concept that should be applied for tenders and pitches: a mutual respect between agencies and prospective clients.

Unfortunately, too many tenders and pitches lack ubuntu; clients invite more than five agencies to participate in their tender and pitch process — which is excessive, indulgent and often to the detriment and demise of smaller agencies because of the costs involved. Too often, marketers are exposed to a range of strategy, concepts and creative work for which the unsuccessful agencies usually remain unrewarded for their efforts.

Set of five rules

Therefore, in the absence of ubuntu, the Association for Communication and Advertising (ACA) and its member agencies, in collaboration with the Government Communication and Information Service (GCIS), National Treasury and the Department of Trade and Industry (DTI), spent almost three years drawing up a set of rules applicable to tenders and pitches in order to:

  • Level the playing field by promoting equal opportunity, fair, equitable and healthy competition
  • Promote transformation
  • Prevent exploitation of all parties involved in the pitch process
  • Mitigate risk and wasteful expenditure
  • Protect the agencies’ intellectual property
  • Protect smaller, local entities from bidding themselves out of business
  • Assist in sustaining and growing the sector in terms of investment and employment

These are five rules in the Code of Conduct:

1. Shortlist up to five agencies

A maximum of five agencies should be shortlisted, whether or not an incumbent agency is involved, and whether or not an open or closed tender process is being followed.

Requesting strategic and creative work from all the participating agencies — without shortlisting the agencies — inhibits transformation, is unreasonably competitive, wasteful, expensive and prejudices smaller agencies which may not have available the same resources to invest in the costs of providing such work, especially when competing against larger or international agencies.

Furthermore, by having more than five agencies compete against each other for final evaluation without a shortlisting process, it becomes a ‘lotto’ as agencies will have little chance of winning the business, given the sheer number of participants in the tender process — and when the cumulative investment from agencies may amount to millions of rands (individually, hundreds of thousands of rands).

Benefit to clients

Having five agencies shortlisted provides an opportunity to have a variety of agencies for final evaluation/comparison, including large, medium, small and possibly “wildcard” agencies.

Benefit to agencies

Each agency, if one of five, will be afforded at least a 20% chance of winning the business, justifying their investment in the pitch process.

2. Sufficient preparation time

Sufficient time must be afforded to agencies for preparation of their submissions. At least fifteen (15) working days are required.

Benefit to clients

Affording agencies 15 working days provides sufficient time for agencies to do the necessary research about the client and the client’s business ahead of their final presentations. This research information will assist clients in evaluating whether or not the agencies have a basic understanding of the respective client’s business.

Benefit to agencies

Participating agencies can take the time to gain a basic understanding of the client’s business and, in so doing, showcase themselves for final evaluation during the pitch process.

3. Submit only credentials and case studies

Only credentials and case studies should be submitted and/or presented by agencies during pitches.

It is very costly for agencies to provide clients with strategic and/or creative work during pitches and requesting such work places smaller agencies at a disadvantage when competing against larger agencies as smaller agencies may not have the same resources available. Furthermore, pitching with strategic and creative work is not allowed when a client’s budget is less than R10m as the costs of new business acquisition cannot be recouped by agencies.

Benefit to clients

Clients save costs as no pitch fees are to be paid when credentials and case studies are required. Asking agencies to come up with strategies and concepts for creative during pitch processes is expensive as agencies incur hard/third-party costs, and clients incur pitch fees which are offset against the hard /third-party costs incurred by agencies as a result of meeting the client’s requirements for strategic and/or creative work.

Furthermore, the strategic and creative work provided by agencies for evaluation during pitches will be based upon desktop research of the client’s business and not in-depth knowledge and understanding, which are essential when crafting a sound strategy and supporting creative. Asking agencies for their credentials and case studies of recently, successfully executed and paid-for work, which is similar in nature to the scope of work required by the client, provides clients with an opportunity to mitigate risk and evaluate agencies based upon what the agencies have already successfully done with resources they already have — concrete evidence of an agency’s ability.

Benefit to agencies

Providing case studies is significantly less expensive for agencies, yet still affords them the opportunity to showcase what they are able to deliver to/for the client. Moreover, agencies can demonstrate how they generated a return on investment (ROI) for the spend/budget used through their case studies.

4. Pitch fee must be paid

A pitch fee of at least R50 000 (fifty thousand rand), excluding VAT (R7000), is to be paid to each unsuccessful agency when agencies are briefed to provide strategic and/or creative work.

Benefit to clients

Paying this aids in leveling the playing field for small and large agencies to compete equally, ensuring a fair pitch process. It also demonstrates to agencies that the client understands how agencies work and shows respect to agencies for the value of their work and contribution to the client’s business.

Benefit to agencies

Agencies are able to recoup some of the hard/third-party costs incurred. Smaller agencies are afforded an opportunity to compete equally and equitably against larger agencies.

5. Protection of intellectual property

The intellectual property of agencies, created during pitches, is protected and retained by the agencies unless paid for.

Note that the pitch fee does not, under any circumstances, entitle clients to the agencies’ intellectual property — this fee is offset against the incurred costs. Clients which wish to use agencies’ ideas must pay the agencies separately for their intellectual property as agencies’ intellectual property is protected under copyright law.

ACA pitch-logging system

The ACA promotes healthy competition because it stimulates growth, promotes creativity and encourages training. We acknowledge that it is important that the competitiveness be directed to constructive development and not lead to unwarranted disruption of productive client-agency relationships, unfair loss of profitability for agencies, potential distrust between clients and agencies, or the decrease of the general perception of our profession for what it is: a freestanding, highly professional trade in its own right.

Furthermore, given the current economic climate, the increased number of tenders and pitches that take place in our sector — as well as the increased number of smaller, BEE and locally owned independent agencies and our sector’s commitment to government for transformation — it has become necessary for the ACA to ensure compliance to the Code of Conduct that governs tenders and pitches in our industry sector.

To that end, a logging system at the ACA has been put in place. Member agencies are required to log* with the ACA all tenders and pitches they are aware of and/or involved in. This enables the ACA to monitor tenders and pitches taking place in our sector and to make contact with clients to create a greater awareness of the code while simultaneously checking pitch processes for compliance.

*Pitches must be logged directly with the CEO’s office as, due to the confidentiality of information pertaining to tenders and pitches, the CEO deals with these directly. Agencies and marketers/brands may email ceo at acasa dot co dot za.

 

Odette van der HaarOdette van der Haar (@odette_roper) is the CEO of the Association for Communication and Advertising (ACA), which is the recognised industry body of the advertising and communications profession in South Africa. It is a voluntary body formed both by, and for the industry, focused upon and committed to self-regulation, and to defend the highest standards of ethical practice.

“Motive” is a by-invitation-only column on MarkLives.com. Contributors are picked by the editors but generally don’t form part of our regular columnist lineup, unless the topic is off-column.

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