The conversation around structured pitch fees in Nigeria’s advertising industry continues to evolve as professionals push for fairer compensation for the strategic effort invested in competitive pitches.

Is pitch fees a strategic imperative for advertising professionals or an unnecessary burden for clients, as the industry continues to grapple with the pitch fee dilemma despite ongoing advocacy?

Agencies vs. Clients: Divergent Views

While agencies argue that pitch fees promote professionalism, protect intellectual property, and sustain business operations, many brands remain hesitant, citing procurement protocols, economic constraints, and concerns about value-for-money.

The debate highlights the industry’s struggle to balance financial realities with the need for a fairer engagement framework.

Persistent Challenges Despite Advocacy

Despite years of advocacy, policy drafting, and industry-wide agitation, the issue of pitch fees remains unresolved in Nigeria’s advertising space. Agencies continue to lament the recurring scenario of being asked to deliver fully fleshed-out creative campaigns often involving strategy, research, and execution-ready ideas without compensation or assurance of securing the business.

A Long-Standing Pain Point

This long-standing pain point, frequently discussed at conferences and within industry circles, continues to frustrate agency owners and creative professionals who say their work is not only underappreciated but frequently exploited.

Regulatory Efforts and AISOP

Regulatory efforts have attempted to shift the tide. The Advertising Industry Standard of Practice (AISOP), introduced by the Advertising Regulatory Council of Nigeria (ARCON), prescribes pitch fees for participating agencies, but it seems it has not fully achieved this critical goal.

ARCON’s Clarifications

Signaling a proactive approach to addressing challenges, promoting growth, and ensuring sustainability in the Nigerian advertising industry, Director-General of ARCON, Dr. Olalekan Fadolapo, has consistently clarified misconceptions surrounding its policies, particularly the much-debated issue of pitch fees.

He has consistently reassured stakeholders that AISOP is meant to regulate, not to strangulate.

His words: “AISOP was specifically set up to provide the regulatory framework in all critical areas of concern for the stakeholders in areas such as pitch fees, engagement policy, payment terms and conditions and numeration model.

It also include media rates and commissions, disengagement protocols, credit policy, return of advertisement and measurement, peaceful resolution and other regulatory industry protocols.

It is expected that with the implementation of this guideline, the Council will be placed among the most progressive advertising and marketing communications industries across the globe.”

Further Guidelines from ARCON

He revealed other guidelines that must be conformed to by practitioners, which include terms of engagement.

“All contracts of advertisement must be formally declared between the parties involved, in writing before appealing to ARCON for intervention.

Henceforth, the whole days of payment is for 45 days, anyone that exceeds this, will attract CBN’s interest rate.”

Industry Associations Weigh In

Overtime, the Experiential Marketers Association of Nigeria (EXMAN) had previously resolved that clients should pay up to N500,000 as rejection fees to compensate agencies for time and resources.

The enforcement of this guideline, however, has been inconsistent.

While past presidents of the Association of Advertising Agencies of Nigeria (AAAN) like Steve Babaeko and several others had pushed for compliance and attempted to broker MOUs with client associations like ADVAN, their efforts have yielded little change.

Lack of Agency Solidarity

One professional from the media planning and buying sector, who pleaded anonymity, said what is compounding the issue is the lack of solidarity among agencies themselves, adding that some still engage in unpaid pitches in a bid to keep their doors open.

She noted that ARCON has laid the foundation through AISOP, but added that the real test and implementation lie in how agencies and media professionals embrace the reform.

“AISOP is a regulation that provides a guideline, just like when government gives policies that must be adhered to.

It is a welcome development because it will put the industry in check,” she said.

The Burden of Enforcement

Dismissing claims that AISOP is only effective on paper, she argued that enforcement depends on practitioners.

“Someone will make the rules, but who will implement it? It is us that will implement it according to how it affects us.

If any media house gives me a red card, and it is 30 days, I will make sure it is 30 days. I will not just reject it, but I can tell you that it is a bit expensive.”

She urged colleagues to take advantage of the reforms by insisting on proper practices, including pitch fees.

“You have to put your house in order and put your feet down.

Whoever goes to a client for a pitch and does not collect a pitch fee is on their own.

If clients refuse to call you because they do not want to pay, by the time one, two or three people opt out, they will change their minds.

We are the problem of ourselves, we have to fall in place and then you can report to the right body if there are so many issues.”

Advertisers’ Perspective

Meanwhile, the president of Advertisers Association of Nigeria (ADVAN), Osamede Uwubanmwen, had questioned ARCON’s authority to impose pitch fees, arguing that AISOP contradicts constitutional provisions that allow businesses to freely negotiate contracts.

Industry Voices and Analogies

Drawing a sharp analogy sometime ago on his LinkedIn handle, Idu Raphael, Managing Director of Poke Media, challenged the foundational mindset that allowed free pitches to thrive.

“Imagine if doctors had to diagnose you for free just to prove they could treat your condition. Advertising agencies should not be expected to hand over intellectual property without a financial agreement in place.”

According to him, intellectual capital, creative strategy, and marketing ideas are the actual products agencies sell, and offering them for free is unsustainable.

“On average, an agency could take on 5 to 10 pitches annually. Most of them are never paid for. In Gen Z speak, ‘It’s really not giving.’”

Proposed Alternatives

He proposed alternative approaches: pitching with profiles that include case studies and methodologies, inviting clients for chemistry meetings to assess compatibility, and ensuring clients have marketing departments capable of valuing creative work.

“If you must pitch for free,” he said, “at least confirm the client understands your value, has a budget, and is serious. In local parlance, ‘If you must pitch a fish, make sure e carry egg.’”

The Out-of-Home Sector Perspective

In the out-of-home (OOH) sector, the pitch fee conversation is also gaining traction.

Anthony Nwabuisi of Optimum Exposures noted that while strategic OOH presentations are becoming more common, the structure remains haphazard. He stressed the need for professional guidelines. “In Western markets, pitch fees are standard.

If you don’t pay, agencies won’t show up. We need to reach that level of professionalism here.”

He criticised the practice of demanding strategic input from multiple agencies on tight timelines, without compensation or regard for the effort involved. “Clients must understand that agencies are integral to their success and should be treated as partners, not beggars.”

Copyright and Fair Practices

Patrick Gomes, CEO of DigitXplus, emphasised the significant time and investment agencies dedicate to working on briefs, alongside the crucial aspect of copyright.

Gomes argued that documented evidence of agreement to pitch should necessitate client alignment and understanding of the work involved.

While agencies aren’t demanding exorbitant fees, adherence to a mandated pitch fee would introduce much-needed hygiene into the market.

This would also necessitate non-disclosure agreements that ensure clients respect the copyright of the work presented and prevent its unauthorized use.

The Case for Streamlining Pitches

Gomes further questioned the common practice of clients inviting numerous agencies to pitch, suggesting a more efficient approach.

He proposed a filtration process where clients initially request information and credentials from agencies.

Based on these presentations, clients could then shortlist a smaller number of agencies, perhaps to receive the brief.

He explained that this streamlined process would be more manageable for both clients and agencies.

The digital marketing expert drew an analogy to hiring a carpenter, stating that one wouldn’t judge based on tools alone but rather on the quality of past work.

Similarly, agencies should be evaluated on their portfolio and track record, allowing clients to identify suitable partners before the intensive pitching stage.

He stressed that an agency’s potential lies in its work, which should build client confidence.

The Call for Structured Pitch Fees

Professionals argue that adopting structured pitch fee policies will reduce speculative work, protect intellectual property, and allow agencies to prioritize quality over quantity.

It would also enable long-term investments in creative excellence, fostering a more sustainable industry.

Following the observation made by some industry practitioners who presumed that the Advertising Industry Standards of Practice, AISOP, is slow in implementation, Olukayode Oluwasona, Chief Executive Officer, 1201 Brandsway Limited, alluded that the assumed slow or ineffective implementation is due to inadequate support from members of the sectoral groups for the law.

Oluwasona expressed full support for AISOP while revealing that its success and full implementation depend on the sincere support and collaborations of all the sectoral groups.

“I think we need to take it from the first principle which borders on the essence of AISOP, the reason d’taire of AISOP.

My position on AISOP is that it is a fantastic idea.

There is no better time than now to have it, the issue of implementation depends on how people support it.

If it is well received and supported well, then implementation will run well but If people don’t support it properly or holistically, implementation will be haphazard.”

Oluwasona who is also a former president of the Association of Advertising Agencies of Nigeria (AAAN), mentioned other reasons which could be responsible to the slow implementation of the law.

“Also, the implementation not been properly enforced, may mean that some people possibly never understood it, or they don’t fully support it, or they are just playing eye-service. I think AISOP is fantastic.

The implementation maybe the way it is now because I know there are stakeholders involved in it, it is not just ARCON and another group, it is ARCON and many groups that have different interests.

I have always told people that the interest of these stakeholders can never be the same all of the time and that is what people can’t understand. The interest of the people who are in the same ecosystem that are supposed to implement AISOP are different.

In many cases, they are actually objecting each other, in a situation where a particular part of the policy in AISOP favours a particular sector; the other sectors may flare it up, simply because some of us are not ready to play it as sincerely as possible.”

He reaffirmed that for the industry reform not to remain elusive in its implementation; it requires and demands sectoral will with relevant stakeholders to expedite its effectiveness in all ramifications.

“Some sectoral group is actually against ARCON and has even gone to Court, if they go to court, naturally the implementation will be delayed.

It is means that AISOP is not well supported completely the way it is supposed to be by every sector.

We all must as sectors must first of all support it, then we won’t have dissenting voices because as it is now, the dissenting voice is now working against the implementation of AISOP, so how will it now run properly but I believe that AISOP is good, it has the backing of the law, so nothing should stop it.”

Dr. Lekan Fadolapo, Director-General of the Advertising Regulatory Council of Nigeria, ARCON, also reaffirmed that ARCON has established some mechanisms put in place to monitor and enforce compliance from all players.

He therefore challenged practitioners to present their cases backed up with reasonable evidence and see if AISOP will not take its course.

“The first thing is let them bring thesis with clear record to say this is the situation.

I know of an organisation that has reviewed its billing policy downward to 45 days, because of AISOP and I am also bold to say now, here today, if our people, the monitoring department, goes out there and sees any organisation whose policy is payment after 45 days, we will have no other option than to bring the force of the law against such organisation.

Before, clients write to agencies and tell them that your payment will be done 90 days.

I need just one letter, it is not like we are threatening, no, we are both colleagues and partners and stakeholders in this whole conversation. What we are saying is that for this industry to grow, all hands must be on deck.”

Meanwhile, also speaking in 2023 at the ADVAN African Awards, O’tega Ogra harped on the danger of overregulation on industry growth as brands clinched awards.

The Senior Special Assistant (SSA) to President Bola Ahmed Tinubu on Digital and New Media emphasized that overregulation could hinder the growth of the marketing industry, affect the quality of innovation and creativity, and create barriers to entry for marketers.

He made this known at the 12th edition of ADVAN African Awards for Marketing Excellence held on Sunday, 26th of November 2023, at the Civic Centre, Victoria Island, Lagos, where he delivered the keynote address titled Navigating Challenges and Seizing Opportunities: The Challenge of Regulation in Marketing.

He stated that regulations are necessary to ensure that marketing activities are conducted in a manner that respects the rights and interests of all stakeholders, including consumers, businesses, and society; however, overregulation could negatively affect the growth of the industry.

In his words, “Regulation can impose costs, restrict creativity, and create barriers to entry for marketers, especially for small and medium enterprises, start-ups, and entrepreneurs.

Regulation can also be overdone, underdone, or inconsistent, resulting in negative consequences for the industry and society.

For example, over-regulation can stifle innovation, reduce competitiveness, and create bureaucracy.

Under-regulation can lead to consumer exploitation, market distortion, and social harm.

Inconsistent regulation can cause confusion, uncertainty, and conflict.”

He therefore called for regulations that are balanced, effective, and efficient. “Regulation needs to be balanced, effective, and efficient.

Regulation needs to consider the benefits and costs, the risks and opportunities, and the needs and expectations of all stakeholders.

Regulation also needs to be adaptable, responsive, and transparent to keep up with the changing realities and demands of the market and society.”

Corroborating Ogra’s remarks, the President of the Advertisers Association of Nigeria (ADVAN), Osamede Uwubanmwen, said: “We would like to state clearly that the industry reform is welcomed by ADVAN as long as it’s constitutional and in line with the original intention of the founding fathers of the advertising regulation body.”

 A Debate Still Unresolved

Until there is collective discipline among agencies and stronger regulatory enforcement, the pitch fee conversation may remain just a conversation.

WATCH ALSO: MARKETING EDGE ONTV