Andy Budd has done a thought provoking post covering the advantages and disadvantages of creative pitches to potential clients and whether they should be chargeable. Certainly in the current market it is expected that creative pitches should include examples of work potential ideas and the cost should be consumed by the agency.
Creative pitches cost the industry an average of £38,000 per year which for a small agency is undeniably a large cost to swallow. Unfortunately the client expects these and, unless you are fortunate to gain work on based on reputation and resume alone then, it is unavoidable. While these costs are inevitably absorbed and reflected in the price of each project I do think it is a necessity and perhaps budgets should be allocated to take these into account. It is a form of advertising and promotion, albeit concentrated on one client, so perhaps this should be properly accounted for and by doing this refine the process to make it as economic as possible?