Pitch Fee: Agencies’ Right or Privilege? Practitioners in Nigeria’s marketing communications industry claim to have lost huge amount of money to non receipt of pitching fees from clients in the past. Pitching fee, an agreed amount of money a client pays agencies invited to bid and expound their strategy and competence in handling a specified company’s marketing communication campaign, which is a normal international practice, is seldom observed in Nigeria. While some agencies see it as their right, most brands owners see it as an attempt to solicit patronage through the backdoor since most times, there was no agreement on payment before the pitching exercise. Most proponents feel a pitch fee should earn a participating agency between N200, 000 and N500, 000 depending on the materials presented by the agency as intellectual input, human and material resources and time expended into preparing for the pitch. Regrettably h one can hardly point out one or two pitches in this country that agencies get the honorarium for the intellectual properties. It’s even claimed that the moment agencies submit proposals for a brief to organizations; it is categorically made clear by the brand owners that the agencies’ right to the concept is not protected anymore. This means agencies right no more exist on such materials immediately after submission and the organizations cannot be sued on any concept used by their brands. Some practitioners believe that if the industry insists on pitching fee, clients may resort to inviting only a few and perhaps the big agencies for account pitching and some of the smaller agencies who have splendid ideas and who could contend well with the big ones may be left out because they are still struggling on the ladder of success in the industry. Reacting on the issue, Verdant Zeal boss, Tunji Olugbodi says “there are basic reasons why the issue of pitch fee has become controversial, they include challenges that lies with unclear terms of agreement and ineffectual enforcement. “There are no clear term agreement between clients and brand owners that a specific amount will be paid most times so who do you blame? More so there is lack of order, cohesion and standard by the industry in terms of ensuring that prospective clients understand the dynamics of the industry i.e. how the creative enterprises work’ he stressed. He went further to reveal that some of the so called prospective clients are nothing but cheap frauds who seek to take advantage of the vulnerable. ‘If we have honor and integrity you will not renege if you have an agreement to pay. I must say though that many have shown integrity by keeping to agreed terms’ Olugbudi concluded. Treading the same line of thought with Tunji Olugodi, the Head Strategist of JSP Corporate Communications, Dr.Phil Osagie opined that its not that companies do not want to pay pitch fee, but they just need to be educated that it is fair on their part to fulfill that obligation. ‘As agencies deliver more value and also put more creativity in their proposals, pitch fees payment reluctance would be reduced. It will happen naturally in the near future but brand owners need to be educated’ he said. On his part Managing Director of BDConsult Tola Bademosi feels when purpose is not known, abuse is inevitable. ‘It has to do with the understanding of the clientele. Most of them don’t understand what pitch fee is so whenever they call for pitching they invite 10 to 15 agencies just for a N10million project. They can’t afford to spend N5million on pitch fee on those agencies when the job is half the price. More so, both the organizations and the agencies needed to be enlightened on pitch fee and how to go about it’ he explained. Charles Igbinidu, MD of TPT believes the reason behind non-payment of pitch fee includes the fact that agencies do not insist on it, he claimed that most times some agencies lobby to be invited for pitch. “You can’t expect the client to pay such gate crashers, most times agencies do not want to say the truth because they are scared of any thing that can mar their relationship with the brand owners” Igbinidu exclaimed. He added that there is no agreement as in unity among the agencies even with the body that regulates PR in the country. ‘The truth is if PRCAN is ready to enforce it, they can, but the first thing is unity, let there be unity and you will see that organizations in this country will have a rethink as regards pitch fee’ he concluded. John Ehiguese, Managing Director, MediaCraft, a PR firm, said since there is no agreement within the client and the organization that after the pitch there must be a payment, one cannot hold them responsible for not paying.’ They are not under obligation to pay because there was no agreement that they have to pay after the pitch. Also there is no particular amount as standard on what to pay as pitch fee in this country so how do you rate what the organization should pay. PRCAN need to have arrived at a consensus on this issue before it can be enforced and I know when the fee is enforced, organizations will definitely pay’ he quipped. Emeka Okeke, MD Media Perspective on his part disapproves the payment of pitch fee to a PR or media agency. ‘It’s not a practice anywhere in the world to pay a media agency pitch fee, so why should such agencies expect it in Nigeria? It’s strictly for a creative shop or agency that pitch fee is paid to. The reason behind it is the fact that intellectual properties like TVC, jingle and some materials have been invested on by the agency to show what they can achieve professionally in projecting their clients and the brand owner calling for the pitch should be prepared for such payment’ he revealed. While some complained it’s a Nigerian fluke, a survey in America posted on www.adweek.com revealed that of the agencies that responded to the survey, nearly half, 49% reported rarely or never get any compensation from clients. Only 5% in North America reported to have got pitch fees, while 56% of agencies based in Europe said marketers offer remuneration for new business pitches. The pitch compensation structures varied, from a flat fee of about $5000 to a fixed percentage of the contract amount. And again, although these figures are based on traditional ad agency reviews, it nonetheless supports similar observations in broadcast design/branding industry. Some who commented on the survey had these to say; "I'm increasingly starting to pitch without getting paid. It's a big problem." Henry Mark "For ad agencies, it's easy not to pay a pitch fee." Solomon "That's the nature of the job. It's an arbitrary, random, strange industry. If you want job security, pick another career” Bolton. "If you do a few pitches for free and you don't get the job, at least you're still gaining experience and making contacts." Branditon ‘With regards to pitching, it appears European agencies have made it really tough for themselves. For example, it is not uncommon in Germany for 21 agencies to happily pitch on an account. In other countries agencies are agreeing to pay the equivalent of R 35 000.00 for the honor of pitching on an account, with no limit on how many agencies are allowed to pitch. “I literally could not believe what I was hearing, and to be honest I could not believe that the various European governing advertising bodies were accepting the situation. In addition to these scary numbers it was also revealed that it is once again not uncommon for the pitch process to extend into a number of ‘hoop jumping’ phases. Phase 1 would be the 21 full strategic and creative pitches. Phase 2 would be a shortlist to seven finalist agencies that would then be required to research their pitch concept at their own cost. Phase 3 would involve the lucky final three agencies being left to fight it out with the client’s procurement department” Gareth Leck Chief Executive Officer, Joe Public. This survey shows that even in the developed society, brand owners sometimes do not pay pitch fees to agencies after pitching exercise.