Consultants that help businesses find agency partners believe upfront transparency can improve the outcomes of the pitching process.
PRWeek approached pitching consultants after Radioactive founder and director Rich Leigh expressed his frustration about clients failing to disclose budgets upfront.
Leigh said the industry would save “so much dancing about” if clients were upfront about their PR budget.
We would all save SO much dancing about if clients (that know what their PR budget is) told us their budget. I get that it's probably an FD somewhere thinking an agency might quote under it and they're 'saving' money. Any of you that are client-side care to shed any more light?— Rich Leigh (@RichLeighPR) March 9, 2020
He later told PRWeek: “Not only are brands missing out on good agencies that just won't pitch without a budget, but there's a secondary damaging issue by not so much as giving a range.
“When we pitch, all bells and whistles – having been asked to go all out, whatever we think might work – and they then come back and say 'Oh sorry, we only have £x', any secondary proposal will always look shit in comparison.”
Manifest Group founder and chief executive Alex Myers told PRWeek his agency won’t pitch for work without at least a ballpark figure or budget range.
“A scope of work without a budget is neither use nor ornament," he said. "We can estimate and develop a proposal, but we have to know if the client has the budget to achieve its objectives or it’s a waste of everyone’s time."
Other agency heads agreed. Future PR founder and MD Nina Sawetz summed up the frustration with a car analogy.
I agree. It’s like going to a car showroom & not revealing how much you want to spend.— Nina Sawetz (@nina_future) March 9, 2020
It’s a fear from clients that agencies will max the budget (in which case tell us a lower figure... ????????????????)
'Only a third reveal budgets'
Agency leaders' concerns about a lack of budget transparency are backed up by consultants who help businesses find agencies.
Creativebrief chief executive Charlie Carpenter estimates that the majority of pitch processes run by consultancies reveal ballpark figures, but that across the wider market, only a third of brands are clear about their budget.
Of the brands unclear about budgets, he estimates that half are opaque and the other half drastically readjust budgets at the last minute – usually downward.
“Like a lot of the industry’s poor behaviours and practices, in the majority of cases it’s not a cynically deliberate attempt to undermine agencies – it’s more rooted in a lack of experience, practice and understanding of how to handle a situation like this, which inevitably leads to a fear of getting it wrong,” Carpenter said.
He said that there is sometimes a reticence to disclose a budget for fear that agencies will “simply quote them that and add 10 per cent”.
Marketing procurement consultant Tina Fegent – “a fan” of clients disclosing budgets – believes that procurement are often reluctant to share budgets because "the cynics among them say that the agency will quote to the figure, or a pound or two below”.
“I have never known an agency say that the budget figure is way too high and you could do it for less,” she said.
Sharing the budget is important because it “shapes the type of agency that the client is looking for”, according to Fegent. “There’s no point in finding them a top 10 agency if the monthly retainer is very small.”
She encourages clients to provide a budget range if they are unclear or unwilling to disclose an exact figure.
Consultants Charlie Carpenter, Alex Young and Tina Fegent back budget disclosure
AAR senior business director Alex Young said including a budget is important to get the best pitch responses because agencies need to know how much budget is available in order to present strategy and plans that are realistic.
“Providing a budget gives the agencies a clear parameter in which to provide their strategic and creative response to the brief; it removes some of the assumptions that are inevitable until client and agency are working together,” she said.
“It allows clients to judge them on a comparable basis – they have all had the same budget with which to work.”
On the flip side, Young has encountered cases where budgets have been provided and agencies have put forward team, strategy and activation proposals that “clearly cost far more than the client has to spend, and this makes the agency very difficult to buy”.
She added: “In very rare instances, the client is so convinced by the agency’s team/conviction/strategy/creativity that they are willing to either find budget or appoint the agency on the basis that they would work together to find realistic creative solutions.
"This will be infuriating news for the other pitching agencies that firmly stuck within the budget provided.”
Why disclosure is important
Carpenter said there are two reasons why it is in clients' interest to disclose a budget.
“With no direction on spend levels, agencies will inevitably present brands the most exciting and premium options available to answer your brief, rather than attempt to find a way to deliver a realistic solution for you against what you have in the pot. This will only ever lead to lasting disappointment for both parties and a lot of time, resource and emotional energy wasted,” he said.
Another reason is that PR agencies are becoming increasingly selective about the clients they choose to pitch for, particularly with today’s pressure on staffing and resources.
“It’s more likely in 2020 than any time in recent history that if you, as a client, aren’t prepared to reveal broadly the size of the prize, the best and most in-demand agencies will turn down the opportunity to engage and you’ll be left with a more mediocre selection,” Carpenter added.
Young encourages more pushback to drive behavioural change. “While it may be unrealistic for agencies to insist on having a budget before they progress with a pitch, there is little doubt that, as an industry, PR consultancies would benefit from collectively pushing back rather than accepting incomplete briefs,” she said.
Perhaps the biggest reason for disclosing budgets is that it leads to “inordinately better results across the board”, according to Carpenter.
Clients that are transparent get better-quality agencies on their pitch lists and find partners better matched to their organisation, which leads to better work “as the focus from first engagement is about producing the right solutions, rather than spending three weeks second-guessing what the client might want vs be able to afford”, he said.
Carpenter added: “They build real transparency, mutual trust and respect into their relationships from the start, which tends to lead to longer-term partnerships, better immersed and educated agencies (about the client’s business) – and, ultimately, more effective work.”
The consensus? Being upfront about budgets delivers better results in a pitch process, which can lead to more effective work and higher value in the client-agency relationship.