New business market does a ‘Lazarus act’ in Q1 2012
In the first quarter of 2012, new business activity in Sydney and Melbourne has seen the biggest jump in 15 years, according to The Agency Register.
Big account moves such as Woolworths, Optus, CommBank and Vodafone have seen the value of clients changing agencies reach almost $1bn – the largest spike since The Agency Register began measuring the market 15 years ago.
The increase follows a ‘scary’ period towards the end of last year, when the value of the new business market crashed to a three-year low.
However, the number of account moves – and the number of opportunities to win new business – has fallen by 20% between March this year and last.
“In a good year, you’ll see around $1.2bn in accounts move – we’ve seen not far off this amount move in just one quarter. The market has done a Lazarus act,” said Peter McDonald, MD of The Agency Register. “However, much of this new business is a result of reviews that have dragged on from last year.”
Just seven account moves – Big W, CommBank, ING Direct, OfficeWorks, Optus, Vodafone and Woolworths – accounted for 75% of the value of the new business market.
Overall, the value of creative business rose by 111% to $516m.
In media, the movement of ANZ, the Federal Government, Optus and General Motors saw the value of media decisions jump by almost 400% to $416m.
The most successful new business-winning ad agency has been Droga5, which picked up ING Direct and Woolworths supermarkets, softening the blow of losing key Foster’s brands to Clemenger BBDO.
Ogilvy benefited from a global alignment that saw it take Vodafone from Host in Sydney, but lose Officeworks to AJF Partnership in Melbourne.
UM has topped the pile in media, winning the Federal Government campaign business, ING Direct and NBN.
PHD secured its best win yet by claiming ANZ. AdCorp won the non-campaign portion of Federal Government while Starcom offset the pain of losing General Motors to Aegis by winning Optus, Novartis and True Value Solar.
Advertisers opting to change their agencies were mainly in retail (30%), followed by IT and technology (23%) and financial services (23%).
Seventy per cent of new business activity took place in Sydney.
“To follow will be a cooling down period,” McDonald added. “As we get later into the fiscal year, there will be less time for advertisers to shop around, and the new business market will slow down.”