AAR 2024 New Business Figures

The headlines

The latest data from AAR’s pitch tracking tool, www.aarnewbizmoves.co.uk, shows an increase in new business activity of 19% in 2024. This is the first upturn in overall new business since the start of 2022. 

On the surface, this is great news for the market, particularly for agencies who found existing clients to be cutting budgets, delaying projects, or cancelling campaigns altogether, and so net new business opportunities became more important than ever for sustaining growth.

A closer look at the figures by sector, reveals a more detailed and nuanced picture behind the headlines.

Advertising & Integrated

There were far fewer scale opportunities in 2024 with five domestic brands billing £20m or more, versus 15 in 2023.

In contrast, the number of smaller scale opportunities (a lot of these project-based) grew significantly in 2024, which begins to explain the uplift for creative and integrated agencies.

The big challenge for agencies was knowing whether to pursue opportunities that they considered to be sub-optimal (type of work, commercially insignificant, culturally misaligned), or hold their nerve and wait for something better to come along.

Another major challenge is that a pitch for a £2.5m retained client and a £250k project should not require the same level of investment by agencies (people, time, resources, money) but too often it can do.

Innovation and continued education around the different ways to select an agency partner becomes even more important in a world where we are moving towards fewer retainers and more project-based relationships.

Media

If you work in a media agency, you’ll always be busy with new business, and 2024 was no different, with an uplift of 38%.

There was a healthy mix of super-tanker global brands including Amazon, Ebay, L’Oréal, Unilever, and scale domestic opportunities including Freemans, Halfords, Oak Furnitureland and Very Group.

One notable trend is the rise in pitches for Search expertise, with most brands not having an incumbent agency—likely because Search was managed in-house. Specialist Search agencies seem to be winning most of these briefs, while larger agencies, despite having skilled Search teams, possibly haven’t fully exploited this growing area of new business opportunity.

Social

New business opportunities in Social grew double digits, we think in part due to the increased investment (and share of investment) brands are making in social, and therefore wanting to make sure they have the right expertise.

Most reviews reported were for brands that either did not have an incumbent agency managing their social comms requirements, or they were part of an existing agency’s remit, or it had been an in-house capability that’s being outsourced to agencies.

This scale of growth in social new business opportunities won’t continue growing at this rate forever, but as agencies look for new revenue opportunities this is a sensible an area to place their efforts.

CRM/CX

The volume of CRM/CX opportunities continued to decline in 2024, but at a slower rate of decline than in 2023 vs. 2022.

However, the scale of the brands that went to market in 2024 was attractive and all appointed agencies with dedicated CRM/CX capabilities.

The trend that will concern agencies is that there are fewer and fewer net new business opportunities for which agencies can compete, meaning growth will have to come organically from existing clients or through acquisition.

Digital

Most digital agency reviews revealed there was no incumbent, indicating these are either new requirements or previously managed in-house.

Another trend is the growing focus on D2C e-commerce, with brands increasingly prepared to split their digital requirements to appoint agencies with the specialist capabilities required.

The shape of pitch

Of all reported pitches in 2023, 64% were open with no restrictions on which agencies could be considered and 6% were roster pitches, open only to those agencies on a business’s roster of recognised agency partners.

30% of appointments did not involve a full pitch programme but were made following a lighter touch approach and degree of due diligence, which is an increase from 27% in 2023, and 23% in 2022.

Six out of ten pitches in 2024 still followed the traditional process including some or all elements of an RFI, chemistry meetings, RFPs, tissue sessions, technical deep dives, and final presentations, sometimes even including creative research.

While this approach can occasionally be justified, it’s worth questioning whether such a demanding process is always necessary and if there’s a better, more considerate way to choose agency partners.

Sectors

1. Food
2. Travel, Tourism & Holidays
3. Retail
4. Financial Services
5. Alcohol