Agencies are being asked to pay intermediaries for the privilege of pitching for accounts. This scheme is on the rise and threatens the value and competition our industry delivers.

How can you be sure you’re working with the best people for the job?

How would you feel if you found out your colleagues had paid to be interviewed for their jobs, instead of being chosen for being the most qualified?

And yet, worryingly, this is exactly the sort of process that is becoming commonplace when agencies pitch. Advertisers may be missing out on opportunities to work with great agencies that are not paying intermediaries or consultants to be part of their club.

We fear such pay-to-play practices are now putting at risk the foundations of value and fair competition in our industry.

Time to call out pay-to-play pitch practices

As the global voice for agencies, VoxComm’s members, who represent ad agencies across the world, have become increasingly alarmed at pay-to-play pitching.

This practice emerged several years ago in the UK, one of the world’s most dynamic and competitive markets. But it is now an international issue as, across the world, traditional marketing methods are changing and more of our lives transition to online. This has led to a downward pressure on agency fees.

Agencies who do not pay an intermediary a fee (paid either upfront or as a percentage of client billings) may not be put forward for pitch shortlists. In some cases, the advertiser is assured that they will not have to pay the intermediary a penny for their services, with all the cost burden being shifted to the agency.

“This situation puts a marketing director in a difficult position”, says Sofia Barros, general secretary of Associação Portuguesa das Agências de Publicidade, Comunicação e Marketing (APAP). “Marketers use these intermediaries because they want the process to be fair and objective. The process depends on that intermediary being objective.”

Pay-to-play schemes may deprive the client of the chance to review the best possible creative directors, strategists, and account leaders for the job, because they won’t pay to be included in a review. The ‘job’, let’s not forget, is to boost a business’s sales and profitability by providing the best possible creative and marketing expertise available.

Perhaps some clients consider this to be a price worth paying. That’s their choice.

However, we have been led to believe that some marketers may not be aware of the full details of the process.

Why this is unethical

While some of this practice is blatant, some is more subtle.

Take search consultants, who offer training and consultancy on how to win new business. Anecdotally, it appears that those agencies that pay a fee to consultants for training and consultancy on new business are more likely to be the same agencies that end up on shortlists managed by the same intermediary.

Marla Kaplowitz, CEO of the 4A’s in the USA, warns: “Marketers should ensure that they have clarity on the business models of the search consultants that they’re working with, and understand the ethical consequences.”

Given intermediaries are privy to highly confidential and business critical information on agencies a prudent approach to protect this may be for agencies to agree upon a three-way non-disclosure agreement (NDA), with the prospective client and the intermediary. The NDA could state in part that the information provided by the agency should be used solely for the purpose of the specific agency review.

Pay-to-play is a value killer

It appears that some of our member agencies may often feel encouraged to enter into these agreements. Because if they don’t, they fear their competitors will.

We’re extremely concerned that these practices are increasingly undermining agency-client relationships. Paul Bainsfair, director-general of the UK Institute of Practitioners in Advertising (IPA), worries that some clients might not be fully aware of the nature of the selection process.

“We can’t expect everyone to be an expert on the advertising agency market, but consider a top-level headhunting firm: a quality headhunter won’t just work with candidates who’ve knocked on their door. Instead, they’ll actively search the marketplace for the best talent and attract the right candidates for the job. This should be the principle these intermediaries follow. If they don’t, we must question whether they’re truly fulfilling their essential role for advertisers.”

Our organisations’ member agencies must sign up to a code of conduct that reinforces fair, transparent and ethical business practices. We trust them to forge the business model that works for them, including entering into relationships with intermediaries and consultants who conduct reviews for advertisers.

But, as the voice for championing good practice and the long-term wellbeing of agencies which provide so much value to global business, we are not prepared to sit back and allow pay-to-play consultancy to continue unchecked.

Time to act in 2025

We want to build on the best of our industry’s initiatives, such as the Pitch Positive Pledge in the UK, the 4A’s/ANA Best Practice Guidelines for Agency Search Consultants, and the 4A’s/ANA Agency Search Simplification Report.

Together, we can help both clients and agencies enhance the pitch process by reducing the stress, wastage and costs that are unfortunately still too common.

Fairness and transparency are not just ideals that bolster confidence in our industry; they are the shining lights which show advertisers what they’re really buying. Great agencies thrive; others learn to adapt and survive.

For advertisers and their clients, make it your New Year’s resolution to review your existing relationships with pay-to-play intermediaries and consultants.

Best Practice Guidelines

There should be fair consideration of agencies.

This means that relevant agencies for a particular marketer’s search are considered in the process, whether or not the search consultant has an existing or prior commercial relationship with an agency.

Examples of a commercial relationship that a search consultant could have with an agency include:

• If a search consultant charges any type of listing fee for an agency to be included in a database
• If a search consultant has any type of paid new business consulting service that assists agencies in positioning, prospecting, pitch preparation, presentation consulting or any other aspect of agency new business operations or activities
• If a search consultant provides other types of paid services to agencies, such as M&A guidance, digital innovation consulting and/or executive recruiting.

It would certainly not be as objective a process for the marketer if only agencies with a commercial relationship with the search consultant were considered for a search; the best agencies could be left out as a result. And it would be biased against an agency that does not have a commercial relationship with the consultant, which objectively may be the best potential partner for the marketer.

It’s a foundational responsibility of an agency search consultant to have a strong understanding of the broad agency universe as well as the capabilities of specific agencies, whether or not the search consultant has an existing or prior commercial relationship with an agency. It should be up to the marketer to establish whether the consultant they are considering can bring the proper objectivity to the party. And it should be up to each agency to decide whether to participate based on how objective an opportunity they think they will have with the consultant.

Agency search consultants should make clear in writing to marketers and agencies involved in an agency search the scope of any other paid activities in which they engage with any of the agencies that are being considered. They should also advise the marketers (including procurement) and agencies involved in an agency search whether they engage in any agency evaluation or auditing services on behalf of marketers, unrelated to the agency search process, and/or whether they engage in any activities that may compete with services offered by agencies.

The objective is to avoid any perceived conflicts and provide a level playing field for all parties.

VoxComm – the global voice for agencies, championing the value that agencies bring to their clients as turbo boosters for growth