New business market 2019
Figures collated from AAR’s newbizmoves database have revealed that the total number of appointments made in 2019 showed an overall decrease of 12.2% versus 2018. This compared with a decrease of 0.5% in 2018 versus 2017.
It should be noted that the figures only cover appointments and, consequently, any pitches that took place in 2019 where an appointment has been put off until this year have not been included in the final figures.
By the end of the third quarter, the hope and expectation was that the new business market would end up at similar levels to the previous year. However, for various reasons, the final quarter of the year turned out to be quieter than might have been anticipated, leading to an overall year on year shortfall.
The comparative health of the specific communications disciplines in 2019 (versus 2018) in terms of volume of appointments was as follows:
2019 vs 2018
The number of advertising appointments reported decreased by 7.2% compared with 2018. This volume decrease was, however, not directly mirrored in value terms with eleven brands with media budgets in excess of £20 million making appointments (B&Q, Barclays, BT, Dreams, GoCompare, Ladbrokes Coral, NatWest, TSB, Virgin Media, Wickes and William Hill), compared with nine in 2018. Of the eleven brands appointing in 2019, only seven held open competitive reviews while the remaining four (BT, NatWest TSB and Wickes) appointed either from within their own existing roster or without a pitch through a prior relationship.
Media agency wins were down by 10.7% versus 2018 but did include a number of major UK and global brands including Ebay, Ferrero Rocher, JustEat, L’Oreal, Stars Group, Three, TSB, Vodafone and William Hill.
In terms of the types of brands that appointed agencies, both the advertising and media new business communities gained through new brands coming into the market for the first time including Bloom & Wild, Cazoo, Good Hemp, Karma Cola, Klarna, Pip & Nut and PitPat.
The volume of CRM/Performance appointments increased by 21.2% compared with 2018; a trend that was also reflected in the quality of the opportunities for agencies with major brands including Comparethemarket, Dixons Carphone, HSBC, Lloyds, Macmillan, Three and Toyota all appointing new partners.
Stand-alone digital appointments continued to decline (down 29.3% year on year) although the focus of these reviews continues to evolve. Digital comms pitches remained a rarity, but there was a rise in the number of brands looking to appoint a specialist social agency.
Integrated agency appointments (involving three or more disciplines) were down by almost 44% year on year. The majority of the reviews were modest in terms of budget, the exceptions being the Open University integrated tender and a number of Government framework pitches.
Commenting on the report, Victoria Fox, CEO of AAR said: “The shape of the new business market is what is most interesting, with the biggest drop in ‘Integrated’ pitches and the biggest rise in CRM/Performance pitches. In our view, this is the new ‘integration’ with brand owners looking holistically at their data driven marketing and breaking down these silos as they put the customer firmly into the driving seat. This focus on customer centricity is also seeing more capabilities being bought in-house and accounted for the substantial drop in digital pitches year on year.
In terms of 2020, despite the downturn in the final quarter of 2019, we anticipate that new business will not decrease as marketers have no choice but to keep up with changing customer demands. How the shape of new business activity develops is fascinating. Brand owners will need to continue adding capabilities to their marketing mix (by in-housing and adding external partners to their rosters) as this is not seen as a nice to have but, instead, a necessity to keep up in an increasingly competitive market.”