Can media agencies afford not to pitch for Shell’s business?
Working with the fossil fuel giant would dent sustainability commitments and dismay staff, but will media agencies be able to look beyond the bottom line? We explore the questions CEOs will be asking themselves about pitching for Shell.
Shell is currently reviewing its media account / Shell
Shell’s media review will likely be one of the largest held this year. The British oil and gas firm spends around $200m on media annually, according to consultancy R3. But no media agencies have admitted publicly to bidding – or even, in the case of incumbent WPP, repitching – for the account.
Aside from the usual tendency towards discretion, that’s probably because deciding to work with Shell – which last week ditched its goals to cut oil production over the rest of the decade – as we head into one of the hottest summers on record, doesn’t look great.
It’s hard to see how Havas UK’s push for B-Corp accreditation, or Omnicom Media Group’s net zero target, would be compatible with working for the brand. GroupM, WPP’s media arm and the parent of Shell’s current partner EssenceMediacom, aims for total decarbonization of the media supply chain by 2030. What net positives can media decarbonization possibly deliver, if the media decarbonized is being deployed to gin up demand for fossil fuels?
Staff at those businesses are doubtlessly aware of these contradictions. And at least some of them – especially those at earlier stages in their careers – will be updating their CVs should their employer add Shell to its roster.
After so long with the same partner, Shell’s team will be hoping to drive down its marketing. A focus on efficiency means the chances of successfully cross-pollinating the media account with other services might be low – a factor that might dampen the enthusiasm of both those asked to defend the account at EssenceMediacom and the agencies considering taking it off their hands.
“Whoever pitches for that will have had a huge debate as to whether they should or not,” says one network media agency boss who wishes to remain anonymous. “I wouldn’t want to touch it.”
How do media agencies scrutinize new clients?
Pretty much every agency in business today uses some framework to decide whether a given client is one worth bidding for. It’s a necessary practice for modern agencies, says Gill Huber of intermediary Oystercatchers, and can lead to a higher quality review process for both agency and client. “It’s a really good thing, to evaluate whether to pitch for something at the beginning of the process because agencies and new business teams are lean.
“I would always encourage agencies to say 'no' to things. It's actually a really good thing. And for the clients, it means the agencies that are pitching for their business will give it their all,” she explains.
That process would usually take into account staff – their attitude towards a client and potential impact on morale, as well as the depth of an agency’s bench. But those frameworks rarely lead to “black or white” judgments, she says – and decisions mostly come down to a balance, between an agency’s capacity for new work and the commercial suitability of a client to its own business plans.
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“It’s not good or bad or right or wrong. It’s about, at that moment in time, looking forward with our five-to-10-year plan, is this business that we want and are able to go after and service? Agencies certainly are putting more into questioning that, and rightly so,” she adds.
Though over 500 agencies have signed a declaration not to work with fossil fuel producers, no holding company subsidiary has made a similar vow. The media agency CEO tells The Drum that discussions over pricing, margins and potential growth all come before ethical considerations. “Alcohol, gambling, fossil fuel extraction – all that stuff comes later,” they say. “We will work with 99% of clients.”
The concerns of agency workers, though, are taken into account. “That would definitely factor in if we thought that client had a contentious issue.” That’s because staff dissatisfaction can cause a major concern for agency leaders down the line.
“We had it a couple of times,” the exec says. “People had big problems. We were asked to pitch something by a global team and I couldn’t find a team to work on it. I was never going to push anyone to do something they didn’t want to do… eventually, we cobbled something together, but it was a big problem.
“People said ‘no’. And I would say ‘no’ too if it was my choice.” They suggest that opting out of a controversial pitch can, as well as guarding an agency’s soul, become a positive for staff. “You can use it as an internal morale-boosting thing – that we said ‘no’ to this because we don’t think it’s right, that we’re sticking by our values.”
Although likely to have featured in discussions around Shell’s account, sustainability concerns don’t typically get the same priority, says the media agency boss. “It’s not a reason not to pitch someone. It only becomes an issue when there’s fossil fuel extraction. The minute you start applying [sustainability concerns] to everyone, you very quickly turn into George Monbiot.”
The Shell sell
Agencies don’t make these decisions in a vacuum. Clients often will make efforts to beautify themselves in order to seem as suitable as possible and attract the best agencies.
“We always encourage that briefing to be open, informative, and get different people from all parts of the business in to talk,” says Huber. “Brands that take the time to really engage the pitching agencies will find that they get better pitches, better relationships.”
In Shell’s case, that will mean emphasizing its clean energy investments and the role the company plays in transitioning the world’s energy supply away from fossil fuels. The agency boss sums up the argument: “They might be doing bad things for the environment now, but we can see a plan we believe in and they share the same approach to net zero. If they do, and we genuinely believe that’s legit. Why would we not want to work with them?”
That sell will be hard to square with Shell’s recent decision not to curtail new oil and gas investment, though. And a tightening regulatory environment around greenwashing (Fifa’s recent carbon neutral fine, for example, or the ASA’s current dragnet against polluters fibbing by omission) could limit the strength of that argument.
Will sustainability trump business concerns?
Set against the specter of staff rebellions and tarnished sustainability pledges is the balance sheet. Despite the growth of CX and data revenue streams, holding company revenues are borne on the shoulders of their media agencies. In the first quarter of 2023, for example, GroupM accounted for 36% of WPP’s net revenues, pulling organic growth for its total global agencies business up to 6.1%. If you exclude GroupM from those calculations, growth was only 0.7%.
The ability to be “choosy”, as our media CEO source puts it, is only granted if the rest of the business is doing brilliantly. “Do we need to just win everything, because we’re way behind, or are we doing well enough to be choosy? Sometimes you’re not allowed. There are times when you’ll just have to pitch for it.”
With an account so large and so controversial as Shell, the decision to pitch will have been taken right at the top. The agency boss says such decisions quickly turn purely financial. “At a global level, certainly that often happens. All the work we’ve done to qualify whether it’s real or not just goes out of the window, because someone’s desperate for a win. That’s what I reckon would happen with Shell. That’s what it comes down to.”