The agency new business boom! How briefs, pitches and client behaviour has changed in 2021

The new business landscape is wonderfully active as we start to recover from 2020. Agency appointments are up 12% on last year, as reported here by AAR’s Martin Jones. Where there isn’t a major uplift, the type of briefs are shifting as client marketers are re-assessing their marketing ecosystems. For digital agencies, there’s been a greater demand for transformation briefs than comms. So what’s driving these new client behaviours and the rise in pitches?

1. A breakdown in the client agency relationship

When a brand calls a pitch, a breakdown of an existing relationship is almost always a factor in that decision, whether that’s what the client says or not. However, we’ve noticed that it’s not a relationship breakdown causing the dissatisfaction, but rather the re-emergence of new business opportunities. Last year, many agencies reported that they had received their highest ever client satisfaction scores. As the level of pitching had dramatically fallen, agencies shifted their focus to retaining and growing existing accounts. These agencies were over-servicing and providing additional support to their existing clients by showcasing capabilities that weren’t visible to the client before.

When new business opportunities came flooding in early this year, these over-servicing levels can’t always be maintained. This has some CMO’s either asking their agencies partners how they can provide a greater depth of service or driving the demand for seeing what other opportunities are available to them through the pitch process.

Interestingly, we have also noticed a recent shift from some media buying agencies choosing not to pitch as they can’t keep up with the heightened demand. Clients need to consider when is the right time to pitch – check out Paul Phillip’s recent article on this subject.

2. Pent-up demand drives agency pitching

Pitching wasn’t an option for many brands last year and, while many extended contracts with their incumbent agencies, now post-lockdown excitement has got pitching fever going again.

In the first half of 2021, there’s been a 400% increase in brand owners with big budgets reviewing their agency arrangements, worth over £20 million. These include household names such as DFS, ASDA and Just Eat Takeaway.

For those businesses that still aren’t comfortable with running a full-scale pitch, we’ve seen a rise in ‘window-shopping’ exercises like discovery safaris. Some agencies have experienced a ‘try-before-you-buy’ approach where brands are using project-based work to experience different agency cultures and capabilities.

In areas such as PR and influencer marketing, agencies have seen opportunities for organic growth where brands are looking for integrated delivery and strategy rather than a collection of multiple specialist agencies.

3. The move from performance marketing to brand building

It’s not just veteran brands that are jumping on the pitch wagon. There’s been a noted influx of businesses striving to become brands. Often these businesses are predominately performance-marketing led and many are start-ups/scale-ups without much previous brand work. Airbnb’s recent decision to slash their performance marketing investment demonstrates this trend towards more brand-led marketing – a move that is already reaping results.

While an exciting opportunity, these traditionally performance-led businesses pose new challenges to agencies. Without pitching experience, some agencies have found that these accounts need more support and guidance than established brands. Also, the start-up culture of these accounts often means they have streamlined teams that work iteratively, which has led to some agencies having to re-evaluate their ways of working.

This has opened a discussion about how agencies work with scale-up brands, especially when it comes to remuneration. These accounts may have a smaller budget and a faster timescale, making the work non-profitable for some agencies using a traditional input fee system.

It’s hugely encouraging to see such buoyancy in new business opportunities across the board, and it will be fascinating to see how this continues through H2 2021, as well as the new trends emerging after the biggest disruptor our industry has ever experienced.

We’ll keep our fingers on the pulse and continue to share our observations as we head into Autumn.