The Drum Network recently held a session in partnership with JFDI to review the findings of its latest New Business Barometer 2018 report. Joined by a group of The Drum Network members, the afternoon event looked at results from the annual survey and raised questions surrounding agency resource, strategy, new business opportunities and challenges.
The survey, now in its third year, received responses from 84 agencies to create a tool that serves and supports agency leaders, while also considering what agency practices worked and which strategic approaches deliver tangible gains.
JFDI’s managing director, Camilla Honey, hosted the session and following were the top takeaway from the discussion.
The role of marketing in new business:
The New Business Barometer survey revealed that generally-speaking there isn’t one sole role dedicated to leading new business. Larger agencies were more likely (74%) to have a specific new business director in place, while CEOs of smaller agencies often assumed this position (67%). However, in medium-sized agencies, marketing directors were increasingly transitioning into the role of new business leaders, jumping from 5% in 2017 to 27% this year. This suggests that marketing budgets are being more specifically allocated.
By and large, agencies of all sizes are preparing written marketing plans with small (67%), medium (91%) and large (78%) organisations using them as a base to predict their future prospects. Investments around agency marketing is also increasing, particularly from large agencies which invested £225,0000 towards this in 2018, almost £60,000 more than the year before. Agencies of all sizes were spending an average increase of 76%, suggesting that new business is a sector that’s increasingly worth investing in.
Using marketing to fill the pipeline is also becoming more important among small and medium-sized agencies. Changes around GDPR mean that agencies are reconsidering methods around raising their profiles, attracting clients and remaining relevant. They’re looking for investments, like marketing, that could lead to higher conversion rates.
Seizing the available opportunities:
High value opportunities were available for medium and large-sized agencies throughout 2018, however there wasn’t much space to convert these opportunities into pitches, despite it being an improvement on availability from the year before.
Although agencies of all sizes were winning pitches worth £500k or more, up from 2017, the survey revealed that often the work would be delayed or not activated, meaning that agencies couldn’t go ahead with it. Honey questioned whether agencies need to go for more pitches, considering that more work is project-based. The biggest reason for losing a pitch was because budgets were withdrawn (31%), although sometimes they were even dropped without any explanation whatsoever (24%).
Small agencies have less resource and smaller teams so they are hit harder and suffer most when they lose their investment in a pitch. Whereas medium-sized agencies can use lead gen agencies to bump up their opportunities and large agencies can lean on their networks for support.
Medium agencies come out on top
Last year, medium agencies felt the squeeze, however the tide has turned in favour of medium-sized agencies, those with an average workforce of between 51 to 150. The value in the opportunities they’re pursuing has increased from 42% in 2017 to 73%.
New business opportunities have also dramatically increased in the last 12 months for medium-sized agencies, making them much more desirable than small or large agencies. While the conversion rate for medium-sized agencies from opportunities to pitches was down by 11% when compared with last year, higher pitch opportunities had presented themselves. Of the pitches won by medium-sized agencies, the total value came in at over 500k, making it worth the time, effort and investment.
From the report results, Honey summarised that clients prefer to look at medium-sized agencies, favouring them over the bigger agency networks.