It’s no secret that many agencies and brands are dissatisfied with the way formal agency pitches are often conducted given the expense, time consumption and other distractions involved. 

A new study from the 4A’s, ANA and market research firm Advertiser Perceptions calculates just how expensive and time-consuming reviews are these days. 

Marketers spend $408,500 on average to conduct an agency search and account review when an incumbent agency is not involved and spend slightly less when an incumbent agency participates, according to the study. 

And incumbent agencies spend $406,092 on average defending an account that goes into review if they opt to defend. But 25% chose not to, likely in part due to the high cost of doing so.  That said, two-thirds of brands conducting reviews said they ultimately kept the incumbent in place. 

The study also shows non-incumbent agencies spend an average of $204,461 per pitch.  

The total cost of a review for a marketer and agencies, assuming three non-incumbent agencies are participating, is more than $1 million.   The average cost increases to $1.2 million when an incumbent agency is included in the review. 

On average, the pitch process takes at least two months when an incumbent agency is involved. For pitches where a new agency is selected, the average time is more than three months.  

The study asserts that the process leads to declines in productivity for both agencies and brands, as one-third of marketer respondents reported disruptions to their daily tasks and 25% indicated delays in launching a new campaign or product due to their involvement in the review. 

The upshot: Reviews should be avoided and triggered only as a last resort. 

 “Agency reviews are an expensive, time-consuming process, on average taking up an entire business quarter,” said Matt Kasindorf, senior vice president/business intelligence & insight at the 4A’s.  

Other options, he said, could include creating an agency/client relationship management program with or without a third-party facilitator. The report  details the fundamentals of an effective program.  

The report also found that 45% of procurement respondents say an agency’s reputation is critical in the selection of the winning agency in a pitch. And half of brand marketers said performance was the key factor in putting an account up for review.  

Forty-six percent of marketers say they use external consultants for reviewing existing agencies and 39% of agencies use consultants to defend in reviews.  

The report is based on interviews with 329 agency and brand marketing executives that were conducted in March.