First Bank Business: Foremost Agencies Throw Caution to the Winds

First Bank is currently on review; good news to agencies and marketing communications consultants. However, the issue is that the pitch might ignite a battle between the bank and the Association of Advertising Agencies of Nigeria (AAAN) reports O’Lekan Babatunde as the bank shows no willingness to paying the 15 agencies the mandatory rejection fees.

It was a weird rush for the First Bank advertising and marketing communications business recently when leading advertising agencies, including shops run by respected practitioners, threw ethics to the dustbin in a bid to attract a slice of the bank’s multimillion naira business which is on review.

According to the Association of Advertising Agencies of Nigeria (AAAN) handbook guide, a booklet that invokes the spirits of the ethics guiding the agency–client’s relationship in the industry, pitch fee is mandatory whenever and wherever a pitch is called. In fact the issue should be sorted out and communicated to the parties involved in the pitch.

Dwelling on the significance “pitch fee”, the AAAN says “it is mandatory that if any AAAN member-agency is invited for strategy or creative pitch, that pitch fee should be paid to the agency if it does not win the pitch.

By inference therefore, if tons of agencies are invited for a pitch, all must be certain that they will be paid a rejection fee just in case they did not win the business. Of course every agency cannot win in the same business contest.

This is necessary because rejection fee, as it could be called alternatively, professionally, is meant to partly compensate for the intellectual effort and other expenses on the exercise.

While credential presentation may not attract a pitch fee, strategy pitch and creative pitch attracts N500, 000 and N750, 000 respectively.

The AAAN document states categorically that the payment of these sums is mandatory if the pitch involves any AAAN-member agency.

“Member agencies are expected to affirm these details and confirm the client’s readiness to pay these fees before agreeing to pitch for the piece of business.”

In the same fell sweep, the document presented as binding proclaims: “Failure by any of our member to adhere or comply is treated as a very serious professional misdemeanour, with the offending agency liable to very serious sanctions.”

With this foreground, the recent First Bank pitch calls for investigation, according to industry sources who spoke with M2 on what they termed as a “charade of agencies”.

Sources claim that about thirteen agencies in the industry, made up of the front liners, were at the pitch which they say is yet to ascertain if a rejection fee will be paid or not.

According to our source, most of the A-list agencies who are currently on the list scrambling for the juicy business have unilaterally ditched the AAAN policy of demanding and getting a guarantee for a pitch fee in the event the business does not or part of the business does not come their way.

Our impeccable source reveals that notable industry figures hinged their decision on the fact that a big agency has a huge overhead to cater for. This situation is not helped by the current economic melt-down they portray as excuse to ditch the pitch fee clause.

While questioning the rationale behind a bank inviting 15 agencies to a pitch including two foreign agencies, some of the participants rationalized their participation in these words: ‘We see this as an opportunity; if we are able to make the pitch, even a fragment of the business will more than compensate for the effort and this will definitely impact on the fortune of the agency. The pitch fee is nothing in this kind of business pitch; the idea is to get on the pitch train first.”

“Simple business logic, one may call this. But is it professional?” another concerned practitioner asks M2, hinting that the two foreign advertising shops on the pitch train would have been duly remunerated to be invited for the pitch. “I mean a Saatchi London will not attend a pitch all for nothing!”

While M2 investigations on some of the agencies contesting for the business confirm that there was “no commitment” by the bank to pay rejection fees, Lekan Fadolapo, Executive Director, AAAN, says the association is yet to receive any complaint in this regard.

Fadolapo, however, confirms it is an unethical conduct for any agency to attend a pitch without ascertaining that a rejection fee will be paid. “We will investigate it, and appropriate sanctions will be meted out to agencies involved if the claim is found to be valid,” he adds.

It will be recalled that the some three years ago, UBA, in a paid advertisement in national dailies, invited agencies to submit bids to pitch its advertising business. The bank which had Celine Loader as its head of Corporate Communications also made it apparent in unequivocal terms that it will not pay rejection fees to agencies that loose out in the bid process.

In a swift response, the AAAN executive council led by Lolu Akinwunmi as its president made issues out of the matter in a pitched battle with Mrs. Loader and the UBA. The management of the bank latter saw reason with the association and later rescinded the decision but scaled down on the number of the agencies scheduled for the pitch.

Having fought a similar battle with Loader at the centre of its all in the past, M2 got the AAAN president to comment on the issue. The president discloses that he is not aware that First Bank is not paying pitch fee but did not either confirm that the bank is paying.

However, it seems it would be incongruous and unthinkable that such a scenario will repeat itself so shortly. This is in view of the fact that Loader was instrumental in the UBA/AAAN reconciliation on similar issue in the recent past.

Responding to M2 inquiries, however, Loader has declared that “rejection fees (N500,000) will be paid to those who are not selected to work with us in any capacity”.

Incidentally, Mrs. Loader, an “amazon in bank marketing” recently moved to First Bank as the bank’s Chief Marketing Officer (CMO). This is the first of such appointments in the banking and financial services sector in the country.

The First Bank pitch according to industry watchers is to stamp Loader’s authourity on the bank’s corporate communications and marketing department. This becomes expedient as the bank also witnessed a change in leadership, with Moyo Ajekigbe replacing Sanusi A. Sanusi, as Group Managing Director of the bank only recently.

With this setting, Loader as CMO has all the powers in the world to effect changes she deems fit in this all important area of the bank’s operation. But why 15 agencies, including two foreign shops?

Prima Garnet is one of the incumbent agencies on the business. The other is Touchstone Communications.

Loarder’s declaration therefore put paid to the “no rejection fee” issue. Contestants who got into the pitch without ascertaining that they will receive a pitch fee can now heave a sigh of relief. Afterall, each agency will receive something for their effort as Loader declares.