IPA New Business Group New Business Survey 2010 STRICTLY CONFIDENTAL.

IPA New Business GroupNew Business Survey 2010

STRICTLY CONFIDENTAL

2

Research Objectives

To determine the amount of time that agencies

are given to prepare for various stages of the

pitch process

To provide an estimate of how this translates

into time and cost within an agency

3

Research Methodology

All new business contacts in IPA member

agencies invited to take part in the survey

Online questionnaire

Fieldwork conducted during February and March

2009

A total of 61 responses were received

4

What does the document cover

RFI/RFP submissions

Credentials/Chemistry meetings

Interim/Tissue meetings

Pitch presentations

Level and cost of resource required

5

Management Summary

It is clear from the responses received that a

high level of agency resource is being applied to

the new business process

Each stage of the process requires that

sufficient time is provided by clients and the

parameters of each stage clearly defined

6

Management Summary

A typical full pitch process takes between 6 and

8 weeks from start to finish, depending on the

number of stages that are involved

RFI/RFP submissions 1-2 weeks

Credentials/Chemistry meeting 1-2 weeks

Interim/tissue meeting 1-2 weeks

Pitch presentations 4 weeks

7

Management Summary

Agencies regard 6-8 weeks as being the

optimum timeframe the pitch process

This allows agencies sufficient time to:

Get a grasp and reflect upon client business issues

Undertake any necessary research

Develop a sound strategic direction

Produce a quality presentation

8

Management Summary

Pressures by clients to foreshorten or unduly

lengthen the pitch process are not welcomed

Agencies feel that credentials/chemistry meeting

suffer from a lack of focus and direction from the

client side. Clients should make it clear to

agencies exactly what they require agencies to

do at this stage of the process

9

Management Summary

Creative agencies with a gross income of £15m or more

estimate that the full pitch process accounts for 99 man days

at a minimum resource cost of £178,000, whilst an additional

£31,500 is spent on “out of pocket” expenses

Creative agencies with a gross income of between £5m and

£15m estimate that the full pitch process accounts for 72

man days at a minimum resource cost of £90,000, whilst an

additional £25,000 is spent on “out of pocket” expenses

10

Management Summary

Creative agencies with a gross income up to £5m estimate

that the pitch process accounts for 47 man days at a

minimum resource cost of £65,000, whilst an additional

£7,600 is spent on “out of pocket” expenses

RFI/RFP Submissions

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The vast majority of RFI/RFP submissions take 2 weeks or less to complete

How long do you get, on average to complete an RFI/RFP Submission?

13

24% of agencies reported occasions where they had been given 5 weeks or more to

complete a submissionWhat is the longest amount of time you have had to complete RFI/RFP Submission?

14

At the other extreme 31% of agencies reported being given a day or less to

complete a submissionWhat is the shortest amount of time you have had to complete RFI/RFP Submission?

15

6 and 10 creative agencies are typically asked to prepare RFP/RFI submissions

How many agencies, on average, are typically involved in this stage of the new business process?

Credentials/Chemistry Meetings

17

Agencies are typically given 1-2 weeks to prepare for a credentials/chemistry meeting

How long do you get, on average to prepare for a creds/chemistry meeting?

18

23% of agencies reported occasions where they had been given 6 weeks or more to

prepare for a creds meetingWhat is the longest amount of time you have had to prepare for a creds/chemistry meeting?

19

At the other extreme 54% of agencies reported being given 2 days or less

What is the shortest amount of time you have had to prepare for a creds/chemistry meeting?

20

Agencies feel that they are given insufficient time to prepare for a creds meeting

Are as important as the pitch but not briefed as such by

clients

Often used as a mini-pitch by clients rather than

“chemistry” sessions”

Are often open-ended challenges with no defined

requirements and little or no chance to ask questions

21

Agencies feel that they are given insufficient time to prepare for a creds meeting

Provide little opportunity to look into the organisation and

the sector they operate in

Provide little time to say something interesting or

insightful about a client’s brand or business

Clients require a high level of detail that requires a

significant degree of agency time and resource

22

Between 5 and 6 creative agencies are asked to prepare for a creds meeting

How many agencies, on average, are typically involved in this stage of the new business process?

Interim/Tissue Meetings

24

Agencies are typically given 2 weeks or less to prepare for a tissue meeting

How long do you get, on average to prepare for an interim/tissue meeting?

25

Only 9% of respondents indicated that they had been allowed 5 weeks or more

What is the longest amount of time you have had to prepare for an interim/tissue meeting?

26

At the other extreme 49% they had been allowed less than 1 week to prepare

What is the shortest amount of time you have had to prepare for an interim/tissue meeting?

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There are issues

Agencies feel that these should be a mandatory part of

the pitch process but…

Procurement departments don’t often allow them

Often declined due to a perceived lack of fairness

Client expectations of what the meetings are for need to

be managed – they often expect fully crafted solutions

Pitch Presentations

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Agencies typically receive up to 4 weeks to prepare a pitch presentation

How long do you get, on average to prepare a pitch presentation?

30

30% of agencies reported being involved in pitches of 8 weeks or more

What is the longest amount of time you have had to prepare for a pitch presentation?

31

At the other extreme 47% having been given 1 week or less

What is the shortest amount of time you have had to prepare for a pitch presentation?

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Agencies want sufficient time to prepare a quality pitch presentation

Agencies wish to be given sufficient time in order

to demonstrate depth of understanding of the

client’s business and brief

But not so long that it becomes a drain on the

day-to-day running of the agency

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Typically 4 creative agencies are asked to prepare pitch presentations

How many agencies, on average, are typically involved in this stage of the new business process?

34

Typically the results of a pitch are provided within two weeks

How quickly, on average, do you hear about the result after a pitch?

35

Over half of respondents reported instances of not being given a pitch result

Have you ever not been informed about the results of a pitch?

36

All but 2 agencies indicated that they were given opportunities for pitch feedback

Do you ever have the opportunity to receive feedback after a pitch?

37

Telephone feedback is the most likely form of feedback to be given by clients

How often do you receive feedback of the following types?

Time Spent & Cost of Pitching

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Time Spent & Cost of Pitching

In the charts that follow the following methodology has

been applied ion order to drive pitch cost estimates

Agencies have indicated the number of man days used during each stage of the new

business process

The total number of man days has been estimated on the basis of a 10 hour working

day in order to take account of the out-of-hours working often required on pitches

Hourly rates from the IPA charge out rate survey have been used to calculate man

hour costs, using average rates by department as the basis

Large creative agencies are defined as those with a gross income in excess of £15m

, medium sized agencies those with a gross income between £5m and £15m and

small agencies those with a gross income up to £5m

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For a large creative agency a full pitch accounts on average for 99 man days

RFP/RFI

Preparation

Chemistry /

Credentials

Tissue Meetings Pitch

Presentations

Total

Senior Management 1.88 3.50 2.62 8.88 16,88

Account Management 2.63 4.50 6.25 14.25 27.63

Planning/Strategy 0.63 2.50 4.38 12.50 20.00

Creative/Designers/Hypermedia 0.50 1.75 5.13 13.75 21.13

User Experience 0.25 0.00 0.13 0.25 0.63

Technical Staff 0.13 0.00 0.00 2.00 2.13

Creative Services/Traffic 0,63 0.88 1.88 3.00 6.38

Producers 0.13 0.13 0.63 1.63 2.50

Channel Planning 0.13 0.13 0.25 1.25 1.75

Total 6.88 13.38 21.25 57.50 99.00

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For a large creative agency that equates to an estimated resource cost around

£178,000RFP/RFI

Preparation

Chemistry /

Credentials

Tissue Meetings Pitch

Presentations

Total

Senior Management £7,880 £14,700 £12,750 £47,470 £89,270

Account Management £3,230 £5,540 £8,230 £19,750 £37,300

Planning/Strategy £1,060 £4,250 £7,870 £24,710 £38,880

Creative/Designers/Hypermedia £640 £2,240 £7,100 £20,500 £30,950

User Experience£250 - £140 £290 £720

Technical Staff£100 - - £2,130 £2,260

Creative Services/Traffic£460 £650 £1,820 £2,910 £6,190

Producers£130 £130 £800 £2,080 £3,200

Channel Planning£150 £150 0 £1,590 £2,190

Total£13,900 £33,920 £38,910 £121,430 £177,600

42

For a medium sized creative agency a full pitch accounts on average for 72.3 man

days RFP/RFI

Preparation

Chemistry /

Credentials

Tissue

Meetings

Pitch Presentations Total

Senior Management1.90 2.80 2.00 7.00 13.70

Account Management1.70 3.00 1.90 9.20 15.80

Planning/Strategy1,50 2.50 2.60 9.90 16.50

Creative/Designers/Hypermedia0.80 1.60 2.20 10.00 14.60

User Experience0.40 0.90 0.30 1.20 2.80

Technical Staff0.50 0.60 0.30 1.10 2.50

Creative Services/Traffic0.10 0,30 0.20 2.40 3.00

Producers0.20 0.40 0.30 0.70 1.60

Channel Planning0.40 0.50 0.10 0.80 1.80

Total7.50 12.60 9.90 42.30 72.3

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For a medium sized creative agency that equates to an estimated resource cost

around £90,000RFP/RFI

Preparation

Chemistry /

Credentials

Tissue Meetings Pitch

Presentations

Total

Senior Management£4,880 £7,200 £5,140 £17,990 £35,210

Account Management£1,430 £2,520 £1,600 £7,730 £13,280

Planning/Strategy£1,720 £2,860 £2,970 £11,330 £18,880

Creative/Designers/Hypermedia£740 £1,480 £2,040 £9,280 £13,540

User Experience£320 £720 £240 £960 £2,240

Technical Staff£350 £420 £210 £770 £1,750

Creative Services/Traffic£80 £230 £150 £1,820 £2,280

Producers£190 £370 £280 £660 £1,500

Channel Planning£280 £340 £70 £550 £1,,240

Total£9,990 £16,140 £12,700 £51,090 £89,920

44

For a small creative agency a full pitch accounts on average for 47.14 man days

RFP/RFI

Preparation

Chemistry /

Credentials

Tissue Meetings Pitch

Presentations

Total

Senior Management2.29 2.57 2.10 5,10 12.05

Account Management2.38 2,19 1.57 4.52 10.67

Planning/Strategy1.71 1.24 1.48 4.00 8.43

Creative/Designers/Hypermedia2.14 0.76 1.24 4.76 8.90

User Experience0.24 0.05 0.10 0.38 0.76

Technical Staff0,14 0.10 0.14 0.71 1.10

Creative Services/Traffic0,67 0.33 0.67 1.86 3.52

Producers0,48 0.05 0.10 0.43 1.05

Channel Planning0.14 0.14 0.10 0.29 0.67

Total10.19 7.57 7.48 22.05 47.14

45

For a small creative agency that equates to an estimated resource cost around £65,000

RFP/RFI

Preparation

Chemistry /

Credentials

Tissue Meetings Pitch

Presentations

Total

Senior Management£4,570 £5,140 £4,190 £10,190 £24,090

Account Management£2,670 £2,450 £1,760 £5,070 £11,950

Planning/Strategy£2,420 £1.750 £2,080 £5,640 £11,890

Creative/Designers/Hypermedia£2,440 £870 £1,410 £5.430 £10,150

User Experience£240 £50 £90 £380 £760

Technical Staff£150 £100 £150 £740 £1,140

Creative Services/Traffic£590 £290 £590 £1,630 £3,100

Producers£540 £50 £110 £480 £1,180

Channel Planning£110 £110 £70 £220 £510

Total£13,730 £10,810 £10,450 £29.780 £64,770

46

Total “out of pocket” expenses range from an average of £31,500 for with a gross income over £15m down to

£7,600 for a creative agency with a gross income up to £5m

Pitch “out of

pocket

expenses”

Over £15m gross income £31,490

£5m to £15m gross income £25,010

Up to £5m gross income £3,713