The real cost of winning business in advertising

The mounting financial burden

According to the latest Scopen report, South African agencies participate in an average of 47 pitches per year spending R 1.6m annually on new-business efforts - and top-tier agencies invest nearly R 3.9m. By comparison, Brazil averages 16.2 pitches and Spain 27.

Only 24% of pitches in South Africa were remunerated last year with an average pitch fee around R50,000 against the R108,400 agencies believe is the minimum fair remuneration for pitch participation. Worse is the conversion rate which sits at a mere 17% on average, with more than half of agencies reporting a success rate below 10%.

Out-of-pocket costs push the total even higher, with agencies spending additional costs on outside resources like freelancers, production, travel, and materials. Add to that the internal team investment - typically 5 - 8 staff members dedicating over 44 hours each per pitch - and you'll see how quickly these costs multiply.

Returns that fall short

Even when pitches are successful, they don’t always convert to revenue. Agencies, according to European Association of Communications Agency (EACA), need to win at least €7m (roughly R166 million) in business assuming a 10% EBITDA margin just to break even on pitch costs. And based on the same study, 6 out of 10 winning ideas never even see implementation - turning even a “win” into a cost-heavy event.

Beyond the numbers, pitch fatigue spells trouble for morale. Nearly half of agency staff report being overwhelmed - stress, burnout, and high turnover have become unintended consequences of an unsustainable pitching model.

The reality is this: every pitch is a mammoth undertaking. It asks an agency to stop, reconfigure and mobilise its best minds and resources to solve a problem for a business that may never become a client. It asks for strategy, craft, creativity, insight and often production - all to be delivered under immense time pressure, with no guarantee of return. And yet, this work is often treated as if it costs nothing more than a meeting and some good ideas.

The financial toll is measurable, but the human toll is harder to quantify: late nights, strained teams, opportunities set aside, and the quiet fatigue of delivering brilliance into the void.

If the industry is going to keep asking agencies to pitch - and it will - then we must at least acknowledge the true weight of that request. Clients, procurement teams, and marketers alike need to understand that every pitch is not just a creative exercise. It’s an investment. It’s a sacrifice. It’s an act of faith. And it deserves the respect, transparency and fairness that such an undertaking warrants.