04 Oct 2020
Figures collated from AAR’s aarnewbizmoves database have revealed that the total number of appointments made in the first three quarters of 2020 showed an overall decrease of 24.8% versus the same period in 2019. This compared with a decrease of 44.2% when considering the first six months of 2020 versus 2019.
Whilst comparative, it must be remembered that the figures only cover appointments and, with many reviews taking longer to sign off and wins taking longer to announce than normal, it will only be at the end of the year that we’ll see the full impact of COVID-19 on the new business market.
As it’s not always possible to ascertain the exact nature of the relationship, for comparative purposes the data concentrates on retained rather than one off, project-based appointments.
For benchmarking purposes, the comparative health of the specific communications disciplines in the first three quarters of 2020 (versus the same period in 2019) in terms of volume of appointments was as follows:
Q1-3 2020 v Q1-3 2019
|Digital (including social)
In the first nine months of 2020, the number of advertising appointments reported decreased by 34.4% compared with the same period in 2019.
This volume decrease has also been mirrored in value terms with only four brand owners with UK media budgets in excess of £20 million (Halifax, Three, Very and Walkers ) making appointments in the first nine months of this year versus eight (Barclays, BT, GoCompare, NatWest, Oak Furnitureland, Virgin Media, Wickes and William Hill) in the first three quarters of 2019.
However, as previously mentioned, many reviews (particularly those that started during lockdown) are currently taking longer to complete, and there are a number of significant reviews that still remain live, including Deliveroo, Hotels.com, TfL and TUI that are subsequently not included in the report.
Despite Lockdown, digital reviews held up reasonably well in the first three quarters of 2020, down 4.2% compared with 2019. For the purposes of the report, we have included specialist social media reviews within the digital total, and this area has been unsurprisingly buoyant in the first nine months of 2020.
The “Integrated” discipline was the only area of the market that showed a year on year increase, up 16.5% compared with the first nine months of 2019. Whilst the vast majority of these were relatively small budgets with clients looking for one agency to deliver a multidiscipline solution, part of the reason for the increase was the number of invariably integrated Government campaigns that were produced during Lockdown and backed by significant budgets.
Media agency wins (including SEO) were down by 22.9% versus the first nine months of 2019 but did include a number of major UK and global brands including BBC, Costa, Deliveroo, Diageo, Duracell, Emirates, Kraft Heinz, Vision Express and Zoopla.
The volume of CRM/Performance appointments decreased dramatically versus the first nine months of 2019 (down ninety percent) although a number of major reviews, including Lloyds and VW, still remain uncompleted.
Commenting on the report, Victoria Fox, CEO of AAR said: “Overall across the first three quarters of 2020 the number of new appointments is down almost a quarter compared to last year, which is not good news for the industry. However, we should take a small amount of encouragement from the fact that if you compare just Jan – June 2020 compared to Jan – June 2019, the decrease was comparatively more severe at 44% decrease in appointments.
This indicates the rate of decrease is slowing and what is clear as lockdown has progressed is that brand owners and marketer have started to move out of crisis mode and tackle longer term challenges including internal re-structures and what they need from agency partners.
As part of their internal re-evaluations they appear to be looking at three specific strategic areas:
In the short term, all three will be having an impact on the external pitching market, as these ‘horizontally directed’ projects need to be carried out before clients start to look for new or additional external agency support.
In previous years, we would normally have expected to see a burst of pitching activity in September leading to appointments before year end. For the reasons outlined previously, this spike has not materialised in any considerable way and therefore the 2020 new business market is very likely to remain significantly down year on year.”