AAR New Business Pulse: Q1 2018
Figures from AAR’s latest New Business Pulse have revealed that the total number of completed new business reviews in the first quarter of 2018 showed a decrease of 38.3% over the first quarter of 2017.
It should, however, be noted that the data only includes appointments that were made in that period, and does not include ongoing reviews.
The true state of the new business market, is therefore only likely to become apparent as the year progresses.
In terms of specific disciplines, in Q1 2018 the changes were as follows:
Q1 2018 vs Q1 2017
As can be seen, all disciplines were down in the number of appointments made in the first quarter of the year versus 2017, with the exception of digital which remained at the same level.
In terms of the ways that clients/brands were making appointments, there was very little difference compared with the first quarter of 2017. Almost two thirds (60.7%) opted for “open” reviews (i.e. considering all potential agencies via a competitive pitch), whilst 20.6% awarded their business without a “comparative” review taking place and 18.7% using their existing agency “rosters” to award briefs.
Advertising appointments decreased by 36.8% compared with Q1 of 2017. There was also a decrease in the number of £20 million plus advertising clients (two) who selected a new agency (Camelot and Harveys/Bensons for Beds) versus four in the same period in 2017. There were, however, a number of high profile brands (Asda, Betfair, Betway, Moneysupermarket, and Oak Furnitureland) that announced pitches, although had yet to make an appointment by the end of the first quarter.
Integrated agency appointments (involving three or more disciplines) were down significantly year on year (47.6%) but where they did take place, often involved group appointments.
Media agency wins were also down (40.7%) versus the first quarter of 2017, with the number of major UK brands making appointments down on 2017 although, as with the advertising discipline, a number including Specsavers and Costa still remained mid-pitch at the end of March.
Commenting on the figures, Kerry Glazer, CEO of AAR said: “Whilst on the face of it, the first quarter figures look somewhat worrying, it must be remembered that they are being compared with an incredibly busy first quarter of 2017. Equally, as the Pulse report only covers reviews that have been completed, it is too early to make any overall forecasts, as a large number of reviews have yet to make appointments. Consequently, it will not be until the end of the first half of the year that we will start to get an indication of the true nature of the new business market, although from our own experience and pipeline, we remain cautiously optimistic.”