The pitch is not due diligence

Fifteen countries in thirty days. Fifteen marketing directors, fifteen meeting rooms with the same brand on the wall, and in every one of them a version of the same fifty minutes: what is not working with your agency, and what would you need from the next one, which I wanted to be mine.

We won. A new new global client. Months later, when the client told us why, that month of mine was on the list. The grit. The fact that someone senior from the agency had sat in those fifteen rooms before a single slide had been shown.

What that month proved was not that we could do the work. Any competitor with the budget and the stamina could have matched it, and the client had no better instrument to measure us with, so it measured the thing it could see. Effort.

I did it for Publicis Groupe, where I ran global new business amongst my duties as CMO, so I have sat both on the side of the table that asks for pitches and the side that pays for them.

I have been thinking about that month since Thursday, when the chief executive of WPP was asked on her third-quarter results call about clients appointing agencies without a pitch. Cindy Rose answered from the second of those seats.

Here is what she said, in full. I share this because other reporting has oversimplified and amended it, when it didn’t need to:

She did not name a client or a competitor. She is right that these are high-stakes decisions, and she is right that they deserve care.

It’s that last sentence that I want to focus on. Because there are two big problems there in my view, and on both, Cindy Rose is incorrect.

“Professionals” is a claim about what agencies are. “Proper” is a claim about what diligence is. The first flatters the industry. The second insults the client. Let’s look at them in turn.

We are not one. We are a trade. That is not an insult and you know my pride in the importance of commercial creativity for everyone; a trade is skilled and honourable and most of the people I have worked with in it are both.

But a trade pitches for the job, and a profession is retained. The language gives it away. Nobody says a company appointed its law firm following a competitive review. It retained counsel. The bank was mandated. The agency was “appointed following a competitive pitch”, and the phrase tells you which side of the line we are on.

The difference is not talent. It is that a profession carries a trust substitute the client does not have to build: a standard, a body that accredits against it, a duty that can be enforced, a register you can be struck from. Our industry carries awards and league tables, which measure announcements, not conduct, and which I have written about before.

So the pitch is not something clients do to us. It is the accreditation we declined to build, outsourced to the buyer at the buyer’s expense and ours. Every six-month long review is the industry re-sitting an exam it never set for itself. Tolerating that review in which the losers work unpaid is not the professional position. It is the opposite. A profession that let its members do that would discipline the client. Ours thanks them for the opportunity.

If anything, appointment without a pitch is a sign of professional standards emerging from a trade, not the opposite, and it should be celebrated, not admonished.

Now the second part. Diligence is proportional to the thing being bought, and the mistake in Rose’s sentence is to assume there is one kind.

For a supplier of an ingredient, proper diligence is a specification, an audit, a certificate and a price. The RFI with its many tabs is exactly the right instrument, because the thing being bought can be fully specified in advance and checked against the spec afterwards. For a partner whose job is your business problems of next year, the thing being bought cannot be specified, by definition. So the RFI measures what it can measure and the spreadsheet fills with what fits in a cell: office counts, tool names, case studies, rate cards. None of it is wrong. The diligence that remains, for anything that cannot be specified, is the only kind that has ever worked on people: evidence of how they behaved over time.

Which is why the same companies that re-pitch their agencies every three years have held the same bank, the same law firm and the same distributors for decades. Those relationships are not undiligenced. They are diligenced continuously, by the work, and renewed by trust at the top of both organisations. Nobody in a boardroom thinks the general counsel is cutting corners because the firm was not made to present to procurement.

Rose didn’t name it herself, but the resulting press pointed at the PepsiCo decision in September as the catalyst of her comment. She may equally have been thinking of the LVMH Asia-Pacific move without a pitch that came at the expense of WPP in the same month.

PepsiCo’s move of its global media account to Publicis was widely described as a decision taken without a pitch. That is true only in the narrow sense. Publicis had been running PepsiCo’s media across Asia and parts of Eastern Europe for years. What PepsiCo ran was a capabilities review of a partner it was already paying to perform, with no external consultant, and then it promoted that partner to the whole account. The incumbent of three decades was told six hours before the announcement. Global media spend on the account: roughly $1.9 billion.

This is not the absence of diligence. I wrote in August that this industry already runs on an outcomes model whether it admits it or not: the outcome priced is trust, the payment is tenure, the penalty clause is the review. PepsiCo paid in tenure and executed the penalty without a consultant in the room. The pitch did not disappear. It became the work.

Nor is it one case. Publicis has now taken four major accounts without a conventional pitch in twelve months: Microsoft’s global media from Dentsu in April, PepsiCo in September, LVMH’s Asia-Pacific media from WPP, ending a nine-year hold, and B&Q for Leo Burnett before that. CEO Arthur Sadoun told analysts his group had also declined six reviews this year that it believed would be decided on price, which is what you do when you know that challenged incumbents are lowering the floor for everyone else and a pitch enables that value destruction.

A multi-gate selection process is what an organisation builds around a decision-maker it does not trust. When a chief executive and a chief marketing officer can appoint a two-billion-dollar partner on their own judgement, it is because their board trusts them to carry the consequence. When a CMO needs six months, four gates, an external consultant and a weighted scoring matrix to appoint an agency, that tells you nothing about the agencies in the room and everything about how much authority the CMO has been given. The pitch is governance cover.

Rose is asking clients to keep proving that they cannot be trusted.

I would do that month again for the right client. I would want neither of us to need it.

The pitch is what a trade does to a buyer who is not trusted. The fix on our side is a standard: a bar, held by the industry, that a client can rely on without an audition. The fix on the client side is authority: boards that trust their CMOs to choose a partner the way they trust their CFOs to choose a bank. Rose’s sentence asks for neither. It asks the client to keep sitting our exam.

Let me close by restating what Rose said, with the version I regard as the truth:

We are elevating ourselves as an industry of professionals by encouraging clients to invest behind proven partnership and not pitch theatre and racing to the bottom on price.

Rose would be better served to understand why they have lost business without pitch theatre, but with the real pitch that matters: doing what you said you would do, and building meaningful partnerships. Because more of these are coming.

Agree? Disagree? The thread is open on the web and I answer every comment, and the best ones become the next edition.

Brandflow is read twice weekly by senior marketing and agency leaders, written by someone who has sat in the pitch room, the boardroom and the client’s chair. If this was useful, subscribe here — Brandflow lands by email every Monday and Thursday.