Better Pitch Practices (or, Just Say No!)
The question of who owns intellectual property (IP) created during a new business pitch is becoming an increasingly hot button issue in today’s marketplace.
As Ad Age reported, the 4A’s recently sent an official letter to consultants urging them to use contract language “that reflects advertising agencies’ right to retain creative ideas presented during new-business pitches.” Backed by a number of top ad shops, the 4A’s notes that as reviews have come to require more “speculative agency work,” more agencies are complaining about contract language in RFPs that requires them to forego property rights.
Consultants agree that ad agencies should retain rights to work created during pitches, but they don’t believe that more clients are seeking these rights, nor that consultants should be the ones to safeguard agencies’ property rights. As one consultant is quoted as stating, “The agency should be the one to make the stand that ‘No, we’re not going to participate if they ask us to give the ideas away for free.’”
Intellectual property during the new business process poses a tricky question in PR as well and we applaud the 4As continued vigilance on this topic. The Council of Public Relations Firms believes strongly that any creative work developed by PR firms during the new business review process should remain the firm’s property until they are either properly compensated for the work or win that client’s business.
As Ad Age reports, clients seeking ownership of IP do so because they fear lawsuits from losing agencies that produced work similar to the winning one. We understand that fear, yet we contend that clients and agencies can take simple steps to minimize the risk of legal issues while still allowing agencies to retain ownership rights. We’ve long promoted the following best practices in the new business arena.
- In deciding between agencies, clients should assess creativity by reviewing comparable cases and/or examples of how a proposed strategy could be executed. They should also acknowledge creative concepts and ideas as valuable intellectual property for agencies and assure that any requests for creative concepts from firms participating in the pitch process are limited and well focused.
- Clients should consider compensating agencies for their work on new business assignments, especially if the assignment is related to a real challenge the client is facing.
- In cases where no compensation is provided, the contract language should clearly state that any sample ideas and concepts presented remain the agency’s property. Clients shouldn’t ask agencies to relinquish rights to concepts presented in a search as a condition of participation.
- Clients should consider the scope, geography and nature of the assignment to determine real versus perceived conflicts, and they should use confidentiality agreements to ensure strict confidentiality for client information.
- Clients and consultants should always report the search outcome to all involved. Once a search is initiated, clients and consultants should report the outcome even if the search ends without an agency selection, is reconstituted, or is delayed beyond the initial deadline. Those new business prospects that churn firms through the new business grist mill run the risk of being labeled “serial clients.” If a client chooses to publicly announce the search outcome, they should work with their new agency to reach the press and other key stakeholders.
To help agencies clarify property rights during pitches, we’ve collaborated with our Client Advisory Group and legal counsel (Davis & Gilbert) to create a two page standard agreement called “The Potential Client Pitch/Joint Venture Submission Agreement.” We encourage all agencies with intellectual property concerns to execute this agreement when commencing the review process.
Intellectual property is serious business. As President Obama has stated, “Our single greatest asset is the innovation and the ingenuity and creativity of the American people…It is essential to our prosperity and it will only become more so in this century. But it’s only a competitive advantage if our companies know that someone else can’t just steal that idea and duplicate it with cheaper inputs and labor.” In the PR marketplace, clients should recognize that communication strategies and tactics developed during pitches have economic value; they are not free. Agencies should receive fair compensation for their ideas, and to that end they must continue to retain property rights. Carefully following best practices in this area can allow agencies to keep control over what’s theirs while also preventing unnecessary misunderstandings and disputes
Great post, and I will share with our new business teams at Ketchum.
We crisis managers must also solve the conundrum created by RFPs that ask for upfront counsel. Personally, I don’t worry about giving away ideas — experience shows that those companies remain better off by hiring outside counselors, regardless.
I DO worry about only being able to provide 101-level, basic ideas when a prospect only provides very surface information to their challenge in the RFP.
It’s tough to provide depth of thinking when a prospect gives only scant clues to their sitution: “What would you do if we were attacked by an activst on a blog? Go!”
This is a very timely and vital blog entry. Being a freelance publicist/writer, I pay very close attention to which clients I pursue and their ability to provide me with enough information and ideas to develop a semblance of what they want without my having to divulge every idea that I have to help them. Many prospects intentionally do this to rack up your ideas and try to execute themselves or hire someone else and provide the ideas to them. I agree with this entry completely and will pass it along to all of my creative friends.
Great post, Kathy. I’ll definitely share the guidelines with our team. I hope the “submission” letter you’ve drafted does, in fact, alter behavior on the corporate side. In my mind, things have only gotten worse in terms of who owns an agency’s intellectual capital. Quite a few corporate types know agencies are scrambling for business and taking advantage. What’s your advice when a newly-appointed senior executive with a current client asks for all new thinking, you submit in-depth proposals and then are notified a month later the account is being put up for review? There ought to be a law.
This is very helpful and I will share with our new business teams. Thanks again! lgr
So many agency searches now are run by procurement officers, and too often companies, government agencies and non-profits are putting agencies through lengthy reviews that don’t result in any contracts being awarded. Quite often, the organizations issuing the RFPs will say that they already thought of the ideas that the agencies proposed. Therefore, there are no IP issues.
I appreciate the frustration involved here. On one hand it’s exciting to be invited to submit ideas – to demonstrate strategic thinking, creativity, the ability to problem solve. On the other hand it’s maddening to feel that submission was not valued or worse was mistreated. It would be terrific to see the process improve. One part of the solution would be better RFPs.
RFPs could be simplified if more organizations issuing them used the Council’s RFP Builder. The tool is designed to help a client organization write an RFP that is well thought out and clear, while at the same time is reasonable in length and respectful of the agency’s time and talent.
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