Unwieldy pitch processes are costing advertising agencies an average of €250,000 a year and impeding investment in innovation and talent development, the seventh annual census produced by the Institute of Advertising Practitioners in Ireland (IAPI) indicates. The 2019 report found that agency staff average 53 days on a pitch and work on 11 tenders a year.
The €250,000 cost includes €50,000 worth of third-party costs incurred by media agencies per pitch and €40,000 for creative agencies. Third-party costs are made up of freelance support to help with extra resourcing and planning, research and outlay on production and design which constitute a major investment by competing agencies to win new business.
Costs hinder innovation and talent development
Irish advertisers asking for extensive pitch processes are the very clients demanding the very best strategic and creative talent from agencies. The scale of work required for pitches limits agencies’ ability to invest in innovation and talent development. Staff hiring was up by 42 per cent on 2017, however a 17% uplift in staff attrition remains a concern.
During 2018, the average number of staff working in creative agencies grew by 20 per cent with 42 per cent reporting hiring during the year. Of particular note was the trend of new hires being sourced from outside the industry, reflecting the wider nature of creative solutions required, especially in an increasingly data-driven and digital market.
Increasingly, creative and media agencies are competing with FAANGs (Facebook, Amazon, Apple, Netflix, Google) to attract the best digital talent, especially in UX/UI, motion graphics and SEO skills. It poses challenges for homegrown Irish agencies which must compete with multinational FAANGs offering remuneration packages up to 40 per cent higher.
Strategic planners in demand
In analysis of the most sought-after skills, strategic planning continues to be the single biggest talent gap in the industry with experienced planners leaving adland last year. It has led to agencies looking overseas to strengthen their strategic capabilities. Planners’ insights and strategic solutions boost creativity and help deliver business results for brand owners.
IAPI chief executive Charley Stoney said that if adland cannot afford the best in this field they will be at a serious disadvantage in the future. “As an industry we’ve been asked to completely rethink and transform how we do business as there’s potential competition from in-house teams, the FAANGs and across the commercial creativity business,” Stoney added.
IAPI represents 56 agencies and over 2,000 employees.
The full IAPI Census 2019 report is available at www.iapi.ie
Pictured are IAPI chief executive Charley Stoney and president Jimmy Murphy from Publicis