Agency Pitches & Creative IP

This post is by TrinityP3 Business Director, David Angell. David has extensive commercial and media experience gained most recently as the Regional Chief Operating Officer at Havas Group and through an almost twenty-year career in media agencies, which he uses to help drive optimal results for TrinityP3 clients.

Part 1: The Agencies

Brain-rape. Anyone would think I had used this term with clickbait in mind, right?

Well, it does make a good, attention-grabbing title, for sure. But I’m not using it egregiously. It’s a term used recently in a Linked In post by John James, a Melbourne-based independent consultant and advisor specialising in ‘Commercialisation and Growth Strategy’.

James was referring to ‘brain-rape’ (apparently a tech-world term, one which I must admit I hadn’t come across before now) in context of advertising agencies having the ideas they use in a pitch stolen from them after they lose said pitch, to then be used by the advertiser with a different agency.

Does brain-rape happen to Agencies?

Yes. It can happen. As someone who has run many pitches, I don’t think it’s ever happened in a pitch I’ve personally been involved in. Which I think is partly due to the way we run pitches, and partly due to a large slice of luck. But it happens.

But is brain-rape OK? Well, one wants to shout, anything with the word ‘rape’ in it (other than maybe rapeseed) must be utterly reprehensible. Right?

Yes – correct. At least, judged objectively and by any moral standard. In short, you’re right – it’s wrong.

Business reality bites

But there is a problem. Business is not always objective, and it is not always moral. What happens when a pitch is over is very much out of the hands of the losing agency or any consultant.

So, if the embittered agency is right to feel brain-raped, what has it done wrong?

In our experience, it is normally due to a lack of self-protection. Agencies can be too keen to give their IP away in pitches with no fallback should the advertiser decide to take that IP and use it elsewhere.

John James’ post says that ‘pitches and RFP processes are often a thinly disguised ruse to extract information from suppliers’. Well, maybe sometimes. To be honest, my experience is that there is normally a genuine intent to find the right agency, not generate an idea-bank.

But either way, ruse or no ruse, if the agency is being asked to submit ideas, does it have the right to protect that IP? Of course, it does.

We’ve had situations before where the agency has asked the advertiser/potential client to sign a confidentiality document incorporating IP protection clauses. And we will always support that in a pitch. If the advertiser refuses to comply – well, it could be a sign that these two organisations are not well-matched, which would save the agency a lot of time and stress.

So what about charging a pitch fee?

Something else associated with this debate is the concept of pitch fees. Unless the advertiser offers pitch fees upfront, this can be tricky. Does Agency A demand a fee, knowing that doing so may put it at a disadvantage? And – does a pitch fee protect an agency from an advertiser stealing its idea?

We’ll always respect the agencies who want to talk about pitch fees, and we’ll attempt to negotiate this with our clients objectively.

Having said that – normally, pitch fees are there to cover pitch disbursements – input costs made by the agency to handle the demands of the process.

They don’t, or at least they shouldn’t cover the idea itself, which should have a value attributed to it (how much is it worth to the advertiser, rather than how much did it cost to create).

Value, not cost

And there’s the question – what value should be attributed to an agency’s idea? It’s a bit like ‘how long is a piece of string’ – it’s driven by circumstance – the size of the advertiser’s business and the commercial objective the idea is trying to solve for.

We’ve seen pitches where the advertiser has offered to buy a losing agency’s idea for $3,000. The agency accepted. Which is to say, the agency implicitly agreed that the value of its idea was, in commercial terms, negligible.

What it boils down to is this. Up-front pitch fees are not the answer to solving IP theft. They should be applied to the costs borne by the agency in development, not the value of the idea itself.

Aside from pitch fees, agencies should incorporate IP protection into the conditions in which they are prepared to enter a pitch; additionally, this protection should state that if the advertiser wishes to buy an idea without employing the agency, then the value will need to be discussed and negotiated.

It’s a buyer’s market, but agencies need to stand firm

We have established that these two elements – pitch fee and the value of an idea – should be separate.

It’s a buyers’ market. It’s still rare for advertisers to pay pitch fees. But this doesn’t mean agencies should not assert themselves on the topic of their IP.

James also mentions in his post that until commercialised, ideas are free. Well – if the advertiser is going to use an agency’s idea after a pitch, it’s immediately commercialised. A value needs to be attached, either by employing the agency or by agreeing to that value and remunerating the agency accordingly. But if the guardrails are not set up at the start of the process, the agency will be left without a leg to stand on.

It falls to the agency to stand firm on protecting its pitch IP from being abused.

Brain rape is a problem. We’re never going to get everyone to act with integrity. But we can aim for as many as possible.

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