According to the third annual JFDI New Business Barometer, the definitive guide to new business trends in the UK advertising and marketing agency world conducted by Opinium Research, it appears that medium sized agencies are now in the sweet spot for new business success in 2019.
In the previous year (2017), medium sized agencies (50-150 employees) found themselves squeezed between the well-resourced large agencies (150+) and the energised smaller agencies that were taking the lion’s share of new business opportunities. However, in 2018 the medium agencies reacted quickly to the squeeze, took actions to improve their new business operations and are now benefiting from this change in strategy.
The JFDI Barometer found they are also benefiting from changes in the market that is affecting both the way clients are purchasing services and what they are looking for from their agencies.
The key trends in the JFDI 2018 Barometer found medium sized agencies:
- New business targets dropped by £385k over the year to £1.75m, reflecting a more realistic approach to new business targets
- In 2019 the main focus will be creating more new business opportunities/ filling the pipeline and building upon the 5.8 new business opportunities a month pursued in 2018 (up from 2.5 per month in 2017)
- Became less effective (38% down from 47%) in converting these opportunities to pitches leading to an average of 2.5 pitches per month with a high 49% win rate, of which 73% were valued over £500k
- Pursued higher value opportunities with 73% of new business opportunities now over £1m compared to 42% in the previous year
- Increased spending by 10% to £91k on agency marketing which is 2.5 x less than the big agencies spend which secure higher value pitch wins
- Use client referrals and lead generation agencies as their main prospecting tools
- Overwhelmingly (91%) have an agreed written marketing plan agreed with senior management, an increase of 10% in the past year
In further analysis, the research found that medium sized agencies are struggling to compete with the smaller and larger agencies to demonstrate their relevant expertise / capabilities which is given as the main reason they lose pitches.
The Barometer covers small, medium and large agencies, and provides an in-depth benchmark of their new business performance for new business managers and business leaders. In summary it found:
- Small agencies are fighting for advantage, with little resource, in an increasingly competitive market and from rejuvenated medium sized agencies
- Medium sized agencies grew-up in 2018 and their investment and focus on new business prospecting is delivering results
- Larger agencies are accelerating the benefits of working within larger networks but may face headwinds with clients buying ‘what you can do for me’ rather than the brand.
This article provides a brief summary of the JFDI 2019 New Business Barometer comprehensive analysis of the UK advertising and marketing and agency world. If you would like further information about the Barometer, please contact email@example.com.
The IPM Learning team has announced an exclusive, Member-only partnership with JFDI for 2019. IPM Members receive a 15% discount against a selection of JFDI’s commercially-focused half-day sessions. Click below to find out more about the next workshop ‘Feeding the New Business Pipeline.’