Agencies historically devote significant resources into the pursuit of new business and to the defense of an existing account when it is put into review. Until now, however, there has been little if any data on the cost of an agency review to the client. The hypothesis shared by the ANA and the 4A’s was that there likely was a material cost to the client as well as to the agencies. The ANA and the 4A’s engaged Advertiser Perceptions to either prove or disprove this hypothesis.
Top line according to The Cost of the Pitch is that marketers spend $408,500 on average to conduct a search and review when an incumbent agency is not involved and spend slightly less when an incumbent agency is involved. And incumbent agencies spend $406,092 on average defending an account that goes into review, an expenditure that likely contributes to 25% of incumbents declining participation in the review.
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This report is a follow-up to the ANA/4A’s Agency Search Simplification Report, as both organizations felt it would be beneficial for clients and agencies to understand the actual costs involved in the agency review/pitch process.