Average Business Pitch Cost in Advertising

Goals

To find out the average cost to participate in a new business pitch for a branding/advertising agency.

Early Findings

  • Since pitching for a new business can be very expensive and time-consuming, advertising agencies, these days, have been found to refuse to pitch without a "pitch fee".
  • As per estimates available for 2019, pitch fees can be anywhere from US$5,000 to US$20,000 depending on the work and the client.
  • As was estimated by Peter Levitan, an advertising agency business development coach, small to medium agencies respond to 10 requests for proposal (RFP) and participate in 6 pitches per year.
  • According to Mr. Levitan’s estimates, cost per RFP is $15,000 based on 150 hours of work at a direct labor cost of $100 per hour.
  • An average finalist pitch which includes external and internal meetings, pitch management, strategic planning, writing, creative work, pitch design (as in leave-behinds and supporting digital programs), the pitch itself, travel, and post presentation follow-up costs an agency approximately $35,000.
  • Types of costs involved in advertising pitches are market research costs, labor costs, material costs, legal costs, etc.
  • It has been found that ad agencies often spend US$500 on materials, or a few thousand for large accounts.
  • Another rule of thumb suggests that time costs will typically be double of the cost of materials for the pitch; for example, if materials are US$300, time costs are expected to be at least US$600.
In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that address your goals.

Proposed next steps:

You need to be the project owner to select a next step.
In our initial research, we could find out multiple insights relating to the cost to participate in a new business pitch for a branding/advertising agency. We recommend research to continue to find out hourly break-up of cost components that are involved in the final new pitch cost. These costs may include material costs, labor costs, market research costs, legal costs, etc. The research would identify the number of hours involved in each of these components and estimate the total cost for each of them based on their hourly rates, as available.
We also propose continued research to find out 2-3 business pitch best practices applicable for advertising/branding agencies. Apart from explaining what the practices are and why they are considered to be the best practices, research would also explain the cost and time implications of these practices. The cost and time implications would mean insights such as whether a certain practice is costly to follow for a small to medium agency, or maintaining a certain practice involves a lot of additional work hours, etc.