The High Cost of Free

We hope that you will find the following article to be helpful.  If, after reading, you would like to explore our thought leadership on a deeper level, please contact Kerry Kielb at The High Cost of Free
On the consultant side of the marketing business, we are constantly faced with a dilemma: How do we balance our client’s desire to have a demonstration of an agency’s customized capabilities against the exorbitant new business costs agencies will incur no matter how restrictive the ground rules? This is especially true in today’s uncertain times. Marketing executives are becoming ever more careful with their communications spend as C-suite demands greater ROI. So while paying stipends for pitches is practically extinct, enterprises are demanding more and more “free” work from agencies as a hurdle to winning new business. This paradigm is partly a function of the times, and partly brought on by our agency friends themselves. After years of “breaking the rules” in pitches, communication firms are clearly paying the price now. Even when we, as consultants exclusively on the client side, have requested that agencies offer no creative at a particular stage, no rips or tone pieces, no primary research, many agencies, nevertheless, will spend enormous amounts of time and money to do just what they’ve been given a “hall pass” to avoid. And as a matter of course, companies accept these gifts because, after all, the agencies are doing it for “free.” Worse, clients are learning to expect these extras as a part of the process. Isn’t it about time we all pull together—consultants, the 4A’s, the ANA and others—to develop some enforceable and mutually agreeable new business spending guidelines that helps stop the bleeding and then abide by them? I recognize it’s hard to break what has become tradition, especially when fear of being the only one to stand on principle, when all of the “bright, shiny objects” will sometimes win the account. However, in the end, the greater damage (as we see it) is a diminishment of the great value an agency brings. With the high cost of pitching business growing higher and higher with speculative work and other forms of taxation, shouldn’t we all act more responsibly?

About The Bedford Group

The Bedford Group is an Atlanta based Marketing Management Consulting firm that has been in operation since 1986. It has built its reputation on marketing organization support, agency search and relationship management and strategic marketing consulting.  Unlike traditional advertising consultants, The Bedford Group looks beyond traditional marketing disciplines to solve complex, enterprise-wide issues for efficient resource management and improving marketing ROI.

Jane Bedford
(404) 237-4565