AAR New Business Pulse data shows overall appointments up by 46.1% in 2021 v 2020

In 2021, the new business and business development market returned to pre-pandemic levels, showing an overall increase of 46.1% in comparison to 2020.

It should be noted that the figures only cover appointments and, consequently, any pitches that took place in 2021 but where an appointment has been put off until this year have not been included in the final figures.

Commenting on the report Victoria Fox, CEO of AAR, said: “Whilst it is positive news that the new business market has returned to growth as lockdown has started to ease, it has to be viewed as a double-edged sword.

“On the plus side, a greater volume of opportunities coming fresh to market can be interpreted as a positive trend as it should increase the chances of new business success for agencies. There are, however, potential negatives brought by this increased volume of opportunities.

“The launch of the IPA/ISBA Positive Pitch Pledge has highlighted the stress and impact on mental well-being that can be caused by an increased volume of sometimes badly-run pitch processes. Agencies will need to be more selective on the number and quality of opportunities they progress in order to protect their employees, and the service levels they are able to deliver for their existing clients. In parallel, it will be important that everyone involved in the selection of agencies, including clients and intermediaries, ensures that the ask and pitch process is consistent with the potential size of the prize.”

The comparative health of the specific communications disciplines in 2021 (versus 2020) in terms of volume of appointments was as follows:

Source: AARnewbizmoves

In order to simplify the data, for the 2021 report (and going forward), we have merged the advertising and integrated categories as the lines between the two have become increasingly blurred in terms of definition.

It is, however worth highlighting that there were very few major genuinely integrated agency appointments at a local (UK) level outside the Government framework. Those appointments that were truly integrated in their requirements i.e. needed significant capabilities in key areas such as advertising, CRM, CX, PR etc. included IAG/BA, Center Parcs, E.on and WW (previously WeightWatchers).

Creative and Integrated agency appointments

The number of advertising/integrated appointments reported increased by 48.2% compared with 2020. However, the overall volume increase in the number of agency selections was not replicated in value terms with six brands with UK media budgets in excess of £20 million making appointments (Asda, BA, Betfair, DFS, MoneySuperMarket and Transport for London) compared with five in 2020.

It is perhaps unsurprising that many major brand owners have resisted the opportunity to review during the lockdown years and we wait to see if a return to normality leads to an increase in the number of “major” pitch opportunities for creative agencies.

In 2021, the new business market was significantly boosted by new entrants. Traditionally (aka pre lockdown), approximately 70% of appointments made by clients in the creative agency space involved the direct replacement of an existing agency relationship, with many pitch processes being brought about by “dissatisfaction” around service and attitude rather than capability.

The remaining 30% of creative agency appointments could historically be put down to a number of factors including the arrival of a new client, the requirement of a statutory supplier review even if the existing relationship was a positive one and, finally, a new requirement where there was no pre-existing agency relationship.

For several years, this meant that the creative agency new business market had either remained static or declined in terms of volume. 2021 did, however witness a seismic change in the dynamics of the creative agency new business market, with a staggering 47% of appointments since the beginning of 2021 having no incumbent agency.

These appointments principally fell into three categories:

1. Start-ups entering a market with established competitors who had been investing in brands over a number of years
2. Scale up businesses at various levels of development who had never invested in “brand” communications and had relied on a combination of performance marketing and word of mouth
3. Established brands who had stopped advertising over the years and/or taken their external communications in-house

Examples of start-up and scale up brands seeking their first appointment included Bumble, Busuu, Getir, Motorway and Waze, while those brands returning to market included the likes of Esure, Hofmeister, Sekonda and Thomas Cook.

Media agency appointments

Appointments of media agencies were back to pre-pandemic levels, witnessing a 44.1% year on year increase from 2020. Whilst a significant number of these were at a global or international level, including Unilever and Google, there were also a significant number of major UK “only” wins announced including the Government/CCS, Comparethemarket, Lloyds, Nestle, NatWest and Zoopla. As the year ended, a number of major global media pitches were still in play including Anheuser-Busch, Nike and VW, all of which were no doubt keeping UK new business teams fully engaged.

CRM/ CX/ Performance agency appointments

The volume of stand-alone CRM/ CX/ Performance appointments in 2021 saw a year on year increase of 65%, albeit from a relatively small base, but did include a number of major clients who preferred to continue to work with “specialist” agencies including KFC, VW, and Wickes and perhaps most significantly Sainsbury’s Argos.

Digital agency appointments

Stand-alone Digital appointments saw a 6% increase on 2020 levels, with digital comms pitches remaining a rarity, and the majority of opportunities for agencies being for digital innovation or strategy or a specialist social agency.

Looking forward

Our belief is that it is unlikely that the new business market will see the same levels of year on year growth in 2022 as we witnessed in 2021, but this will depend on whether we continue to see new entrants to markets, whether a return to normality triggers the appetite to review of high spending clients and whether existing brand owners start to look for more consolidation or feel the need to add more specialisms to their ecosystems.