SMU pay-to-pitch scandal adds to ad agency woes

Being charged an "administrative fee" to submit a pitch is just one of many issues advertising agencies face when they try to win business - having their ideas stolen is another.

The issue of the administrative fee came up when Singapore Management University (SMU) reportedly asked agencies pitching to win their creative, digital and media business to pay S$100 just to receive the tender documents.

The rationale for this pay-to-pitch, as reported in Marketing Magazine: it's “part of an administrative process to cover documentation and audit of pitch for good financial governance”, although we don't get to hear how bad financial governance would be at SMU, if the fee was not paid.

In other countries, agencies charge pitch fees of prospective clients, to compensate for the amount of time, effort and - most importantly - their creative ideas when submitting a pitch. In Singapore, such fees are usually not charged. But it's even more rare to have a client charge for a pitch.

Against this backdrop, agencies frequently complain of idea theft. While there is no allegation that SMU has stolen ideas, cementing the tender process with a financial transaction should automatically impute that agencies' ideas will be protected against theft by anyone tasked with evaluating them.

It would add injury to insult (!) if agencies went to the extraordinary step of paying to receive tender documents from any prospective client, only to then have their ideas stolen when they submit their pitch.

Advertising agencies should always PitchMark their tender documents, irrespective of whether they pay for the tender documents.

Clients should know that tenderers (and that includes photographers, composers, copywriters or anyone else) who PitchMark their documents have committed to not charging pitch fees.

PitchMark is free, both for creatives and clients.

Background

SMU justifies the fee by saying "The choice is all theirs. This fee is a standard policy by our Procurement Department that handles all tender and audit required for corporate governance”.

But exemplifying the comments from agencies, Craig Mapleston from Iris Singapore is quoted as saying:

“Agencies already invest a significant amount of time and resources into pitching despite no certainty of winning the business,” said Mapleston. He added while SG$100 is by no means a huge sum, it is not the amount that matters, it is the principle.

“It’s an alarming signal of a ‘master and servant’ relationship for the pitch winner. In many countries agencies are paid a pitch fee to pitch for an account. While clients in Singapore rarely follow this, it’s a step too far to expect agencies to pay for tender documents.”

Daniel Yap's article in The Middle Ground is even more blunt: "SMU isn’t the first to ask for a fee for pitch documents. I’ve seen the public sector do the same once or twice. It’s still exploitative. It’s an insult to anyone who has done a day’s work in their lives. Would you pay money upfront to go for a job interview?"

And Mumbrella has weighed in under the headline "Paying to pitch – like prostitutes paying to give a blowjob" with this comment: "It was only $100, a token amount which SMU has justified as an administrative cost in the name of good governance, and probably thinks will weed out those who aren’t serious out its business, but will probably result in any serious agency boss running for the hills".