JFDI, the UK’s leading specialist new business agency, has published its fourth annual new business barometer, the largest survey of new business professionals in UK agencies. The survey covers 16 disciplines within the Marketing Communications sector and covers actual new business performance in 2019 with forecasts on projected activity in 2020.
The JFDI Barometer is a joint venture with award-winning strategic insight agency Opinium Research and covers small, medium and large agencies. It provides an in-depth benchmark of new business performance for new business directors and agency leaders.
The key findings:
Average new business revenue target for the next 12 months: large agency fell 4% to £6.096M; medium agency rose 31% to £2.320M; and small agency rose 25% to £1.320M
Average marketing spend: large agency marketing spend was down 17% to £187,000; medium agency spend was up 24% to £113,000; small agency spend was up 30% to £56,000
Prospecting strategies used by all agencies: 76% management network connections (2% up on 2018); 42% asking clients for referrals (10% up on 2018); 39% formed alliances and partnerships (7% up on 2018)
Most distinctive prospecting strategy: medium agencies were 16% more likely to use management network connections (89%); large agencies were to 62% more likely to form alliances and partnerships (63%); and small agencies were 31% more likely to ask clients for referrals (55%). There has been a big shift in smaller agencies using intermediaries (51%), more than doubling from the levels seen in 2018
New business priorities: large agencies were more likely to focus on filling the new business pipeline (69%, up 30%); medium agencies were more likely to focus on converting pitches (34%, up 20%); and small agencies were more likely to focus on growing existing client business (18%, up 10%)
Average number of opportunities pursued: 39 for large agencies, down 37%; 31 for medium agencies, down 56%; and 24 for small agencies, up 14%
Average total value of opportunities pursued: £7.135M for large agencies, down 23%; £4.367M for medium agencies, up 15%; and £1.631M for small agencies, up 31%
Average value per opportunity pursued: £182,471 for large agencies, up 23%; £141,321 for medium agencies, up 160%; and £69,397 for small agencies, up 14%
Pitch conversion rates: large agencies converted 46% of opportunities to pitch stage and converted 47% of these pitches to wins; medium agencies converted 44% of opportunities to pitch stage and converted 36% of these pitches to wins; small agencies converted 35% of opportunities to pitch stage and converted 42% of these pitches to wins
Average total value of pitches lost: £994k for smaller agencies (vs. £637k won); £2.939k for medium agencies (vs. 1,428k won); £4.590k for large agencies vs. (£4,590k won).
Reasons for losing pitches: 38% were rarely given detailed reasons; 33% had been told the budget was withdrawn; for 21% that the remuneration terms were not acceptable
Mark Clark, Managing Director of JFDI, said: ‘The uncertainty for all businesses over the last 12 months is to be expected and evident within the agency sector. Regardless of size, all agencies are looking for ways to get smarter about how they go about new business. They are focusing their prospecting strategies, investing more in marketing-led engagement and targeting higher-value opportunities. But despite these sharpening up of best practise, they are all are still leaving millions of pounds on the table un-won. Those agencies that convert more than they lose still have a competitive advantage in terms of the cost of new business. And therein lies the opportunity for 2020.”
Josh Glendinning, Associate Director at Opinium, said: “Marketing and communications have changed massively over the past 20 years, and our barometer really underscores how much of an impact this uncertainty is having on generating new business. Where previously the industry was marked by clearly defined and consistent roles and budgets, there is no real confusion. Agencies that were previously in distinct disciplines are often fighting over the same budgets and new business professionals are having to become a lot more commercially savvy in pursuing opportunities. And it is all the more difficult for agencies to adapt to these changing demands when two in five are not given detailed feedback on pitches and proposals.”
The JFDI 2019 New Business Barometer provides a comprehensive analysis of the UK advertising and marketing and agency world. If you would like further information about the Barometer, please contact mark@jfdi.uk.com.
