The dreaded RFP -- or, request for proposal -- is losing favor with ad execs, especially marketers, and the rise in programmatic media-buying may be thanked.
In the first survey benchmarking ad executive sentiment about RFPs, three out of five say they plan to stop using them in the next 12 months.
“A lot of those have been viewed as transactional pieces of business,” says Andy Sippel, executive vice president-client solutions at ad industry researcher Advertiser Perceptions (AP), which began surveying advertisers and agency executives on their planned use of RFPs last month and found they are losing steam.
Sippel postulates that the rise of programmatic has fulfilled the need of marketers and agencies to process the transactional aspects of media-buying RFPs via technological automation, freeing buyers and sellers to focus on negotiating value.
“What’s left over is the human, high-touch ideation,” he says.
AP plans to continue tracking the shift, but Sippel says the change should come as good news to well-staffed media suppliers who are equipped to sell value vs. commodity.
However, some media suppliers may need to retool, because they have staffed their sales organizations with more junior “order takers” that have come to rely on RFPs as a pro forma way of competing for share of advertising budgets.
Sippel says media buyers should also be happy with the shift, because the RFP process has also commoditized more of what they have been doing in recent years, making them more “wranglers” than strategists and negotiators.
That said, clients seem more keen on doing away with RFPs than their agency counterparts.
While ad 59% of all respondents don’t plan to use a RFPs for media-buying in the next 12 months, when you break it down, it works out to 65% of marketers vs. 55% of agency executives.
Among those who still plan to utilizes RFPs in the next 12 months, AP asked whether they expect them to eventually go away altogether and 54% said “yes.” The average amount of time they expect RFPs to become irrelevant in media-buying is 2.1 years.
AP plans to repeat the study over time to track sentiment and expectations.