New business activity plummets to ‘scary’ three-year low
The movement of accounts in Australia’s biggest advertising markets has crashed to its lowest point since 2009.
After flatlining for most of the year, a decline in the value of new business activity began in Sydney and Melbourne in April, accelerated in June and by August had reached a three-year low.
Between August 2009 and August this year, the new business market lost 21% of its value, dropping from $846.5m to $667.8m, according to figures from The Agency Register.
The value of account moves in Sydney & Melbourne: moving annual total ($) to August
A good time for all those agencies and creative businesses that rely on project based work to be able to define their unique point of difference (many forget to do or don’t know what that actually is).
I guess agencies have reduced prices to retain clients.
Perhaps another way of looking at this, is that some clients have realised that when marketing budgets are under even greater scrutiny than ever, that the costs of calling & running a pitch may outweigh the benefits, particularly when so many agencies (creative & media) are finding it harder to differentiate their offering.
It actually maybe a smarter business decision in the current economic climate to stay with your current supplier(s) and fix any issues, than have to run the gauntlet of holding a pitch & then bring a new team up to speed. Before you know it, that’s half the year gone already. In this digital era that’s a very long time to spend changing suppliers or partners.
Just a thought….
Since it costs less to keep a client than win a new one I would have thought that lower new business activity was not scary but reassuring. Less redundancies, less money blown on pitches, better quality of life for staff. Perhaps scary for pitch consultants and headhunters but they are adjuncts to the business with few staff.