Free pitches on the increase as client budgets drop, report shows

Design consultancies are increasingly being asked to work on creative pitches for free as client budgets drop, according to a new report.

The Design Industry Voices survey, authored by branding group Fairley & Associates, recruitment consultancy Gabriele Skelton and On Pointe Marketing, suggests that clients are also expecting more work for less money and that consultancies are employing fewer permanent staff – turning instead to freelancers and unpaid interns.

A total of 496 people working for digital and design consultancies were quizzed last October for the survey. Of those questioned, 71 per cent said clients were expecting more work in pitches for free.

Stef Brown, managing director of On Pointe Marketing, says, ‘Producing creative work for free during pitches means agencies are giving away their most valuable commodity: their intellectual property. I can’t think of any other professional services business where this is tolerated, or even considered an option.’

In addition, 82 per cent of respondents to the survey said client budgets had been reduced, 85 per cent said clients were expecting more work for less money and 54 per cent said clients were expecting‘safer’work.

Some 58 per cent of respondents said consultancies were using fewer permanent staff, while 58 per cent of staff surveyed said they intended to change job in the next 12 months and 35 per cent said they had been with their current consultancy for less than a year.

Last year’s Design Industry Voices report showed that 56 per cent of employees wanted to change jobs in the coming 12 months, while the 2009 report showed that 38 per cent intended to move.

A report from accountant Kingston Smith W1, published last November, shows that operating profits for the Top 30 design consultancies rose by 85 per cent through 2010, while gross income for the same groups was up by £27 million.

Read analysis of this year’s Design Industry Voices report from the three co-authors here.

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  • Mike Bell November 30, -0001 at 12:00 am

    Free pitching within the exhibition, event and live communication industry is the absolute norm, and has been for a long time: I have worked on only a very few ‘paid-for’ development of ideas for corporate clients in the past. As a freelance designer I now work within very tight pitch budgets myself for agencies pitching multi-ways for tight budget end-business on short-lead times. Again, an abolsute norm for a long time now.. no time or money for easy thinking or lunches!

  • Jonathan Butters November 30, -0001 at 12:00 am

    It’s always useful to segment the responses from design consultancies as treating all disciplines as a “homogeneous lump” masks sectoral differences. I’d like to know if free pitching is on the rise in Industrial Design. It clearly and demonstrably doesn’t work in our sector but we have suffered at the hands of freebies and “up front” work being delivered by a few institutions in the grant-funded university sector. Interestingly, I have noticed that enquiries from SMEs and inventors for product design consultancy and prototyping work have increased recently inversely in proportion to the amount of grants available from universities. Does this suggest that there was some displacement going on in the market before the cut-backs?

  • Mark Shipley November 30, -0001 at 12:00 am

    Many of the creative agencies we work with have found themselves faced with this problem. Although there’s no single solution, there are a couple of measures which may help answer the ‘to pitch or not to pitch’ question. The decision should be based on protecting the intellectual property being created and ensuring any risk to your overall business operation is minimised.
    First, properly assess whether the cost of the pitch is worth winning the actual work. It’s just as important to consider how much the cost of pitching will impact on profit as it is to weigh up whether your company can deliver the work within the suggested timescale.
    Secondly, using a written agreement can ensure that if your work is not chosen, the intellectual property produced remains with you. If you are being asked to pitch for free, there is no reason why a potential client shouldn’t be willing to agree to a few simple terms. With an agreement in place, even if you don’t win the work, you won’t stand to lose your valuable intellectual property too. There are major variables inherent in assessing each pitch but your IP is one thing which is always worth considering.”

  • Peachy November 30, -0001 at 12:00 am

    I’m freelance. I work for the big boys; I work directly for clients. I stipulate in my contracts I do not work on unpaid pitches. Paid pitches yes, if I want a paricular piece of work but with a clause they are not buying the work or have any right to use it commercially at a lower cost – its purely show and tell to compete/win. I value my intellectual property very highly. I do not give away my ideas.

    Paid pitching = Transaction
    Unpaid pitching = Desperate
    Freelance = Expendable
    Tight Confidentiality Contract = Smart


  • Matthew Prosser November 30, -0001 at 12:00 am

    You don’t walk in the a Chinese restaurant and try all the food first and then say you don’t like it not pay and then go next door. Do you?

  • kit radcliffe November 30, -0001 at 12:00 am

    Designers, designers…IDEAS, your currency,YES. What you trade with and in, YES. The intellectual property of the individual mind? Of course not; an idea does not care who has it because an idea is the borrowing from the zeitgeist, the culmination of inventive, innovative experiences in your chosen profession. If you are so afraid of theft, then publish a book of your ideas and sell it, TV chefs do it all the time, artists hang their ideas on the wall for all to see. If you want to get paid for your ideas don’t free pitch, become an artist.
    IDEAS…Does your potential client really care who has the idea? Does your potential client value or give worth to the idea? Do you? I do.

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