NEW YORK (AdAge.com) -- Marketers in India may have found a new profit center -- charging agencies to participate in their pitches. Reckitt Benckiser, one of India's largest advertisers, has rocked the local ad industry by apparently requiring that media agencies pay to get on the pitch list for its current media account review.
According to local trade publisher Exchange4media, Ad Age's partner in India, Reckitt is demanding that media agencies ante up about $6,500 to pitch for the account. The winner would also have to rebate to Reckitt volume discounts paid by media owners.
The Advertising Agencies Association of India discussed the pitch fee at a meeting and advised its member agencies not to participate in the Reckitt pitch.
Several local and international media agencies are believed to be planning to pitch. It's unclear whether agency networks like ZenithOptimedia, which has an international relationship with Reckitt, are pitching. Incumbent MPG is believed not to be pitching to keep the business. ZenithOptimedia and MPG did not immediately return calls.
Alarmingly for agencies, Rahul Welde, Unilever's VP for media for Asia, Africa, the Middle East and Turkey, said at an Exchange4media conference in Mumbai last month that it was "interesting" that an advertiser was asking agencies to pay a token amount for the right to pitch.
According to Exchange4media's Indian Media Agency Report 2009, Reckitt Benckiser is India's second-biggest TV advertiser after Hindustan Lever.
A Reckitt spokesperson at the company's global headquarters in the U.K. said, "We are not commenting on the India pitch, as the process is confidential."
Reckitt's India pitch comes just a few months after it consolidated its $1.3 billion global media business with Havas' MPG and Publicis Groupe's ZenithOptimedia in November 2009, and left the India business with incumbent MPG.