How to Win Pitches in China and When to Walk Away, This Week on ‘Thoughtful China’

Winning Pitch Strategies, Procurement and Compensation Models, and the Art of Maintaining Good Agency-client Relationships in China

SHANGHAI- There are four words every ad agency director hates to hear: “We’re having a pitch.”

In the early days of advertising, accounts often stayed with agencies for years, even decades. Today in China, agencies are often asked to compete for short-term projects. Marketers are under constant pressure to improve the ways they source, manage and align resources, including advertising budgets.

This week on “Thoughtful China,” our guests debate pitch strategies, procurement and compensation models, and the art of maintaining a good agency-client relationship.

Coca-Cola, for example, looks for “creativity, integrity, productivity, strong business awareness and an understanding of Coca-Cola’s business in China” when it selects agency partners, according to Sarah Millard, the beverage giant’s director for indirect procurement in Greater China and Korea.

“The idea of just presenting a Powerpoint [in a pitch presentation] is no longer satisfactory. [Presenters need] an understanding of the content and an ability to actually demonstrate that you can deliver the work in China,” says Ms. Millard. “Over-promising” is a key mistake agencies make, as well as giving examples of a skill set and experience “without making it applicable to the China market.”

Ad agency executives counter that some procurement directors are focused on driving to the lowest cost possible, which leads to high agency turnover as well as tense negotiations over compensation structures.

Aegis-owned Carat “has made decisions to not participate in reviews where we don’t feel that the agency’s true value is being recognized. One of the key issues that we see in our industry is agency-client turnover and the highest turnover comes from those clients who don’t see the total value in the relationship and see it only in terms of price. Those are the types of relationships that we like to avoid,” says Seth Grossman, managing director of Carat China.
Winning a pitch presentation, meanwhile, is “just half-way to finalizing a deal,” says Jeff Ma, TBWA Group’s chief marketing officer, Greater China “There are a lot of negotiations that come in the second stage that take even more energy, patience, detailed preparation and analysis.”

Melvyn Goh, president of Mindshare China, identifies four types of advertisers in the mainland. Global clients often have long-term agency relationships across multiple markets. Multinationals with autonomy to make their own agency appointments can be short-term or long-term, depending on the whims of the local management team.

Local mainland clients “will pitch you ever year,” Mr. Goh says, while the fourth group, local small and medium-size enterprises (SMEs), “are very deal-driven and cost-driven.”

China’s communications world has become chaotic, cutthroat and confusing, says P.T. Black, Thoughtful China’s senior creative director. Negotiations over agency contracts “can get ugly fast. Don’t take any of it personally. Both parties are playing a set role and naturally will exploit every advantage.”

Find out more about the art of good agency-client relationships in China in this week’s episode HERE.

Thoughtful China – Episode Thirty: “Agency-client Relationships in China”

Executive Producer:

Normandy Madden – Senior VP, Thoughtful China

Host:

Trevor Lai – VP & Director of Client Service, Identica

Featured Guest:

Sarah Millard – Director, Indirect Procurement, Greater China & Korea, Coca-Cola Co.
Commentator:

P.T. Black – Senior Creative Director, Thoughtful China

Panel:
Jeff Ma – Chief Marketing Officer, TBWA Group Greater China
Melvyn Goh – President, Mindshare China
Seth Grossman – Managing Director, Carat China

Episode Summary:
Marketers are under constant pressure to improve the ways they source, manage and align resources, including their advertising budget, which can lead to high agency turnover and tense negotiations over compensation structures. This week on “Thoughtful China,” learn about pitch strategies, procurement and compensation models, and the art of maintaining successful agency-client relationships in China.