New Business Market 2021

By Martin Jones and Rebecca Nunneley

Although we’ll have to wait until later this month to collate full data on the new business market in 2021, we wanted to share a few observations on what we’ve witnessed in the last twelve months with you now, in this edition of Pulse.

❶ The overall new business market After a year of almost total lockdown, it shouldn’t have come as a major surprise to anyone that the new business market kicked back into action in 2021.

Many marketers had retrenched in 2020, worrying about their own families, their own businesses and customers rather than their external agency relationships. ‘If it ain’t broke, don’t try and fix it’ was probably the viewpoint of most brand owners in 2020; particularly when they knew that they probably wouldn’t get the opportunity to press the flesh with any new prospective agency partners. However, as the chimes of Big Ben (if there were any!) closed off the year, it felt as though there was a renewed momentum in the new business market, and January seemed awash with announcements of agency reviews.

Whilst this volume never abated in the world of media (see point two), it did calm down somewhat in other disciplines, particularly creative, and we are predicting that by the time that we compile the final figures for 2021, the overall new business market (for any discipline) will have seen a 47% year on year increase and be back to (if not slightly up on) 2019 levels. So please keep your ears and eyes open for our annual new business Pulse report, which will be published later this month.

❷ The explosion in number of media reviews You would have to be living on a different planet (or at least not working in a media agency) to have missed the huge number of ▸

media pitches and appointments that were announced in 2021.

Coming out of total lockdown in 2020, and a huge period of economic uncertainty in the run up to the US election, it is perhaps unsurprising that brands and advertisers started to see light at the end of the tunnel in 2021; putting their heads above the parapets through reviewing (and often consolidating) their media agency arrangements, which is invariably the most expensive line in their annual communications budget.

Initial data would suggest that there was a 50% increase in the number of media reviews and appointments in 2021 versus 2020 across national, international and global requirements. These included many of the big tech brands such as Google and Facebook/ Meta, global advertisers such as AnheuserBusch, Coca-Cola and Unilever, together with major UK advertisers Comparethemarket, Lloyds Banking Group and Zoopla Property Group.

This avalanche of media reviews resulted in many media agencies being more selective than ever about which opportunities they accepted, and which they (often reluctantly) walked away from.

Which pitches you accept is clearly a judgment call (and a mixture of experience and instinct) but it is definitely the case that those media agencies that were more selective – and didn’t over extend themselves – were more likely to be successful than those that took a decision to play a percentage game and go for anything that moved. ❸ The number of appointments where there was no incumbent agency Historically, the majority of creative reviews and appointments have occurred because of a breakdown in an existing relationship. In the last twelve months, the market has almost been turned on its head with 47% of appointments being “new” where there was no existing AOR relationship in place. These fresh appointments principally fell into two categories:

Scale ups

These tended to be start-up businesses who had previously relied on performance marketing or word of mouth to increase purchases or engagement but were now at the stage where they needed to “become a brand”. Examples of such businesses included Beavertown, Decathlon, Getir, M&M Direct, Motorway, MyTutor and Waze.

Existing brands

These could be brands who had previously worked with an agency, where the relationship was dormant, and they now felt the need to ”re-engage” with consumers. Examples of these would be Gu and Hofmeister.

There were also examples of brands who were coming to the UK for the first time, including QSR heavyweights Taco Bell and Wendy’s.

It is likely that both trends will continue in 2022, leading to a reinvigorated marketplace, once “normality” returns.

❹ The surprising lack of major creative reviews Whilst the total “pitching” market saw a major volume increase, there were comparatively

few “major” creative reviews in 2021. Since January ‘21, there have been eight creative appointments made by brands and businesses who were investing more than £20 million in their “traditional” advertising comms in the UK market. This was marginally up on 2020, when there was a total of six such appointments; equating to a 25% year on year increase against a market uplift that is likely to be in the late forty per cents.

These were Asda, BA, Betfair, DFS, JustEat, MoneySuperMarket, TfL and Virgin (Holidays and Airline).

Some of these reviews were statutory in nature, whilst others were often precipitated by a change in client CEO or, in the case of JustEat, the merger of two businesses. ❺ Traditional sectors are the most likely to review With virtually every sector of industry either disrupting themselves or being disrupted, there were no great surprises in the sectors that had called reviews or made new appointments in the last twelve months, with the top ten opportunities for agencies (in terms of volume) coming from: • Finance • Retail (both online and bricks & mortar) • Travel • Food • Motoring • Charities • Alcoholic Drinks • B2B • Non-Alcoholic beverages • Entertainment

❻ New business crystal ball gazing The extent to which the volume of pitches in 2021 was simply a result of the comparative inertia of 2020 is difficult to call.

We are sure that there will continue to be new entrants to individual markets that will be looking to appoint new agencies whilst many other brand owners with existing relationships will be looking to consolidate rather than add to their agency ecosystem. The new business market is definitely not going anywhere, but it will be fascinating to see what shape it takes.

How “normal” 2022 will prove to be is currently an unanswerable question but hopefully most, if not all, of it will be spent in the real rather than virtual world. ■