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BIMA Member News: AAR's New Business Market Review 2007
Article Date: 3rd Mar 2008
THE NEW BUSINESS MARKET IN 2007
Background
The report has been compiled using data from www.newbizmoves.co.uk, AAR’s database that tracks new business reviews and wins in the areas of advertising, digital, direct marketing and media. Taken from the trade press and our knowledge of the marketplace it contains details of accounts that move, agencies pitching, winners and value where known.
Overall Market for New Business
The overall new business market in 2007 was reasonably similar to 2006 with one or two notable exceptions; digital and direct marketing.
In terms of particular disciplines the results were as follows:
Advertising – 2.5%
Levels of reviews in advertising remained very similar to 2006. There were 308 reviews involving UK based agencies in 2007 compared with 316 in 2006.
This includes everything from the largest global appointment to the smallest regional pitch.
Unsurprisingly, the most significant account moves in terms of billings were global or international including Dell, Citibank, Wrigleys, Nokia and Visa.
There were however 13 £20 million plus UK only accounts that reviewed including 3, Asda, ITV, Toyota and Waitrose. This compared with 11 in 2006.
The middle ground of £10 million plus local clients has remained relatively quiet with a few exceptions including Birds Eye, C&J Clark’s , Eurostar, IKEA, Nintendo, The Post Office, and Times Media.
Digital + 30.1%
Following a quieter 2006, last year saw a 30.1% increase in the number of reviews. There were 95 reviews reported in 2007 versus 73 in 2006.
Whilst there may well be other reviews that have not been reported, our conclusion is that this growth is indicative of the marketplace.
It is very difficult to gauge total spend levels, but some of the most significant clients reviewing included BskyB, Microsoft, Royal Mail together with a number of Unilever brands.
In 2008 we are planning to break digital reviews down into different sectors e.g. full service, creative and media where known, to give a greater understanding of how the market breaks down.
Direct Marketing – 40.7%
Direct marketing saw a significant drop in the number of reviews reported. In 2007 there were 67 account moves reported compared with 113 in 2006. This represented a decrease of 40.7%.
However, a number of significant clients reviewed their direct marketing accounts in 2007 including British Gas, BSkyB, Land Rover, Lloyds TSB and Orange.
Integrated – 5.0%
The number of reviews that were described as “Integrated” remained very similar to that in 2006. There were 57 reviews reported in 2007 compared with 60 the previous year.
However, as in previous years, the vast majority of these were small accounts where the client was looking to appoint one single agency for all their requirements.
Media + 1.5%
Full service media reviews (i.e. planning and buying combined) remained broadly similar to the previous year. There were 138 media reviews reported, compared to 136 in 2006, an increase of 1.5%.
Again, these ranged from large, global reviews to small local briefs.
As with the advertising reviews, the largest reviews were global and included Johnson & Johnson, Mattel, Philips, Samsung and Visa.
In 2007, there were 8 UK only media pitches that were valued at over £20 million. These included BBC, BGL Group, Coca-Cola, HMV, MFI and Premier Foods. This compared with 7 in 2006.
Media Buying +66.6%
Stand alone Media Buying reviews remained very small in number with only 5 reported in 2007 compared with 3 the previous year.
Media Planning/Communications Planning -3.2%
In 2008 we are planning to divide Media Panning and Communications Planning into different categories, but for the purposes of the 2007 report we have put the two together.
There were 30 reviews in 2007, which involved either media planning or communications planning being separated from full service reviews. This compared with 31 in 2006.
The largest of these was for BT, together with a number of COI pitches.
Reviews by sector
Financial Services clients reviewed their agencies more than any other in 2007, representing 9.0% of all account moves. This was followed by Government (both local and national) with 8.3%, Travel at 8.0%, Retail with 6.6% and Food at 5.8%.
The most significant difference compared with 2006 was the decrease in retail reviews which represented the largest sector in 2006 with 10% of all reviews but which fell to fourth place in 2007 with 6.6%.<
