Can Agencies Win If They Don’t Play the Spec Pitch Game?

The pros and cons of creating free work to win work

When Mike Wolfsohn and his two partners left Southern California agency Ignited in 2010 to form High Wide & Handsome, they vowed not to participate in competitive pitches requiring contenders to foot the bill for speculative creative work. Such exercises "demean the profession," said Wolfsohn, who decries the process as "a reality show to impress some panel of judges. Pitches rarely resemble what a working relationship would be like between agency and client."

Many in the business would undoubtedly agree with that assessment. Still, spec pitches are sewn into the fabric of adland so seamlessly that they even provided plotlines for Mad Men. What makes for memorable episodic television, however, can be a frustrating and expensive time suck in real life.

Clients and consultants have been known to add extra rounds of presentations and demand more spec work at the drop of a hat, and ultimately, "they can decide to pick no one," Wolfsohn said. "In most pitches, one agency has the inside track based on a prior or existing relationship with a client. If it's not you, your chances of winning are far less than 10 percent. An agency would have a significantly higher chance of walking away profitable if it took the capital resources it invests in a pitch and bet it all on red or black in Vegas."

Around the same time Wolfsohn's Culver City, Calif., agency drew its line in the sand, Zulu Alpha Kilo adopted a similar stance. The Toronto shop took part in spec pitches during its first two years of operation, but in 2010, founder and CCO Zak Mroueh soured on the practice. "We haven't done a pitch that requires spec creative in five years," he said. "This approach allows us to support our clients' brands rather than using the resources our clients pay for to gain new business."

Obviously, most agencies aren't in a position to go the no-pitch route. Quarterly fiscal pressures virtually ensure that shops owned by holding companies will ride the spec treadmill in perpetuity. Still, in recent years, some smaller independent firms have managed to grow without engaging in spec competitions. Instead, their leaders leverage personal and professional relationships to gain entrées with brands, present ideas directly to prospective clients or, in some cases, face off against other shops only when they're compensated.

In its five years of avoiding pitches (it's passed up dozens of invites), Zulu has added assignments from Audi, Corona, Google and Puma, and increased its staff threefold to 75. "Not doing spec work and staying true to our values has expedited our growth," Mroueh said, because it eliminates distractions and allows staffers to focus on expanding relationships with clients already on its roster.

And, despite declining at least 15 invitations to spec pitches through the years, High Wide & Handsome has picked up work from Constellation Brands, Guthy-Renker and Ventura Foods. Since launching, the shop has increased its staff from three to 16.

Alas, to break through a certain ceiling, spec pitches may—even for independent, entrepreneurial players—prove at some point unavoidable. For example, 35-person Baldwin& in Raleigh, N.C., mostly eschewed such contests for its first half-decade (entering just four and turning down about 15 opportunities). Two years ago, however, founder David Baldwin decided to reconsider. "We started bumping up against this sentence from clients time after time: 'I've got 50 other agencies willing to do this for free'" and pitch without being compensated, he said.

Some entrepreneurs believe that adopting a blanket policy is foolhardy. "As your agency's growth plans become more aggressive, the high-risk/high-reward nature of those bigger spec pitch opportunities becomes a whole lot harder to ignore," said Marty Donohue, partner and creative director at 37-person Boston shop Full Contact, which launched in 2006. "Ultimately, you can continue to fall on your no-spec-pitch sword, but you may be watching your biggest and best chances to grow your company go to agencies that swallowed their pitch pride a long time ago."

Even Wolfsohn, still clinging to his principles, conceded, "We could've had 30 or 40 people and two to three times the billings if we pitched—maybe."

This story first appeared in the Aug. 31 issue of Adweek magazine. Click here to subscribe.

@DaveGian David Gianatasio is a longtime contributor to Adweek, where he has been a writer and editor for two decades. Previously serving as Adweek's New England bureau chief and web editor, he remains based in Boston.