Pitch fees: don’t bank on them

Singapore’s Central Provident Fund (CPF) has become one of the few organisations in Singapore to offer pitch fees to creative agencies.

In CPF’s latest request for tenders to provide it with integrated marketing and creative services, it has announced that up to five tenderers will be paid a honorarium of S$3,000 (about US$2,100) if they make it to the second stage of its selection process.

According the brief, as reported by Marketing Magazine, the pitch fee being paid is on the basis of helping to “offset the time and costs incurred for the submission of design concepts including detailed sketches.”

Since no compensation is being offered to tenderers who fail to make the shortlist, this should encourage tenderers to make more of an effort to get past the first round.

It looks like a good thing: money in the bank. But could the trend towards pitch fees also make your ideas less bankable?

On one level it seems only fair that Creators making a pitch at the request of a prospective client with the luxury to pick and choose should receive at least something for their time and effort. Even on the Client’s side of the equation, there are those that see pitch fees as both fair and good business, resulting in a more valuable selection process and building stronger, more productive relationships.

For all the various practical pros and cons of pitch fees, we believe there’s one key issue. When a pitch fee is paid, is it to compensate the Creator just for the time and material costs incurred in making the pitch? Or is it also seen as payment for their ideas?

Every Creator knows of horror stories where a pitching process has been used as a cheap way to harvest ideas, or where the ideas put forward by one pitcher end up being adopted even though someone else wins the contract. Such practices are clearly not ethical.

Pitch fees, however, can muddy the ethical line, even when intentions are good, and even if there’s no explicit clause in a pitch fee contract that the payment gives the client the right to use ideas pitched to them.

Simply by paying the Creator something, a client might feel a greater moral right to “borrow” ideas. And in accepting payment, a Creator might weaken any potential avenues of moral pressure to be compensated if they discover their ideas have been appropriated.

It’s a complex issue. We’d like to hear what you think about pitch fees, about your own experiences and about cases you know of that illuminates both the pro and cons of pitch fee payments.

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