AAAN establishes taskforce to address pitch fee challenges in the industry
By Zion Rufus
The Association of Advertising Agencies of Nigeria (AAAN) has constituted a taskforce that will address the longstanding issue of the controversial non-payment of pitch fees by clients to their consultant creative agencies.
Speaking to MARKETING EDGE during a press briefing for the sectoral group’s 48th AGM/Congress, the AAAN President and CEO/Chief Creative Officer X3M Ideas, Mr. Steve Babaeko disclosed that the association has constituted a taskforce that will report any pitch where the client is refusing to pay the pitch fees.
The President stated: “During this tenure, we have had cause to write one or two letters to clients who are bent on organizing a pitch without pitch fees. We have filed letters to them, and sent a cease and desist action to let them know this is what our law says and we will also continue to do that. We know sometimes that our members, out of the eagerness to land that business might not report by themselves, this is why we constituted the taskforce that will keep their ears to the ground and report back to us if they hear anything of such so we can do the needful. The thing is that if nobody reports, then there is no case.”
The pitch fee was introduced as a way of compensating the agencies for all the efforts, non-recoverable external costs, human resources, expenses incurred, and the intellectual input channeled towards the success of the pitch.
Although it is a standard practice in some countries, it appears to be failing in the Nigerian market. Players emanating from the Nigerian marketing and advertising eco system however urged the AAAN to encourage agencies not to accept briefs or participate in any pitch process that do not have pitch fees attached.
In April, a MARKETING EDGE investigation revealed that the age-long issue was being closely worked upon by the Advertising Practitioners Council of Nigeria (APCON) and the Association of Advertising Agencies of Nigeria (AAAN) after the issue generated another heat in the sector when Perez Tigidam— a Communications & Reputation management consultant and Creative Director at Arden and Newton expressed his disaffection over the lack of pitch fee payment by the Nigerian client companies.
In response to Tigidam’s frustration, AAAN President, Steve Babaeko had disclosed that the umbrella advertising body, together with APCON, was already in talks to end the controversy.
According to Mr Steve Babaeko, the taskforce will monitor the pitch processes, report defaulters, and these defaulters will in turn be handed over to APCON.
In his words: “This is contained in the memorandum we sent to APCON as part of the new rules of engagement. If APCON is the referee and regulator that regulates both the clients and the agencies, then APCON should be able to step in and say they totally see things from the view of the AAAN, because in other markets, it’s not the same and we are just trying to comply with our best practices.”
Chief Executive Officer, 7even Interactive Limited, an award-winning marketing and creative advertising agency, Taiwo Agboola pointed that there was no monetary value that could be pegged or used to qualify the concepts, intellectual property and the efforts channeled towards the success of a pitch as “you can’t pay enough for concept”.
When pitching for a prospective account, agencies would use portfolio, slides, video, storyboard and other channels to review their organizational set-up, result for other clients, types of accounts, experience of personnel, specializations, and any other information pertinent to winning the account. As such, the pitching fee was to serve as compensation to the agencies.
In 2016, the AAAN tried to enforce the payment of pitch fees, and according to the former AAAN President, Mr. Kayode Oluwasona, there were cases where the body sanctioned clients for defaulting on the payments. In 2019, the Association also declared its full support that agencies be well compensated through payment of pitch fees to augment their strategic and creative inputs.
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