AAR New Business Pulse data shows overall appointments down by almost a third in H1 2022 versus H1 2021

18 Jul 2022

Having shown a bounce back in 2021 when compared to the previous twelve months, the number of agency appointments made in the first six months of 2022 showed an overall decrease of 31% compared with the first half of 2021. 

There were, however, significant differences by discipline with some sectors of the agency new business marketplace holding up better than others. 

Discipline 

% Difference 

H1 2022 vs H1 2021 

Total

(31)

Advertising/ Integrated

(42)

CRM/ CX/ Performance

(42)

Digital

(38)

Media

3

Source: AARnewbizmoves 

It should be noted that the figures only cover appointments and, consequently, any reviews that were started in the first six months or, in some cases, before but were not completed are excluded from these interim figures. 

Advertising/ Integrated appointments 

Not only was there a significant decrease in the volume of Advertising/ Integrated appointments (down 42% year on year), but there were notably fewer high value reviews of over £20 million UK media spend with only the Cabinet Office, Virgin Media/O2 and Dreams reviewing. This compared with six large value reviews in the first half of 2021. In addition, two of the three solely involved existing roster or framework agencies.  

Media appointments 

The volume of Media agency appointments was more robust, marginally up on the first six months of 2021, with some significant UK national and global brand owners including ABInBev, Amazon, Danone and Sky making appointments or reappointments. 

In contrast, other disciplines such as CRM and Digital “pitches” were less prevalent, with pitches often being avoided by awarding additional work to existing agencies. 

One of the reasons why Media pitching has remained relatively buoyant is the ever-present global super-tanker reviews that are on a three- or four-year cycle. Each year, brands coming to the end of their contracts pull into the pitch harbour to undertake their agency reviews. 

Creative pitching  

In contrast, the new business/pitch market, particularly in the “creative” space, is driven by four key factors: 

  1. General optimism about the future - economically, politically, and personally 
  2. Dissatisfaction with existing agency relationships 
  3. New entrants (start-ups/scale ups) to the market 
  4. A belief that there is “something better out there” 

In 2021, there were a significant number of new entrants - 47% of the pitching market - and some degree of optimism that the end of the COVID-19 pandemic was in sight, leading to the first overall rise in the new business market in five years. 

By contrast, the first half of 2022 has seen a triple whammy for agencies when it comes to new business opportunities through a combination of extreme uncertainty on a national and global scale, a lack of new entrants and existing agencies ensuring that they over-service their ongoing agency relationships. 

Looking ahead to the second half of the year Victoria Fox, CEO at AAR, said: 

“It would appear that the “COVID bounce” enjoyed by many businesses has now settled, and the macro-economic tectonic plates have shifted sufficiently to put uncertainty as the primary filter through which investment decisions are being made. As we all know, with uncertainty comes indecision.  

“What do we think this means for new business opportunities in H2? Some brands will postpone or cancel their intention to go to market, choosing to stand by their current agency partners. Others will see this as an opportunity to look for what they consider to be better partners or a better deal, or possibly both. And with fewer opportunities the battle to win will intensify. 

“So, let’s all bear in mind the Pitch Positive Pledge as we steel ourselves for what looks like being a more threadbare new business market than most agencies will have hoped for.” 

About The Author

MJ #1

Martin Jones

Lead Consultant, Build

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