A surge in creative reviews has resulted in a 36 per cent increase in global new business activity in the first half of 2018, according to a new report by independent consulting firm R3. According to R3 creative new business revenue increased from $691m in H1 2017 to $1,084m in the first half of this year.
The firm tracked 3,401 agency new business wins from over 700 agencies globally to date (up three three per cent over the first half of 2017). R3 Principal Greg Paull says: “2018 has been a big year for creative wins globally – which are up 57 per cent with some big alignments from Nestle, P&G and others. Clients are moving larger pieces of business than they did in 2017.”
This uptick in creative wins has largely been driven by the US, where revenue is up 88 per cent YoY. In the US Saatchi & Saatchi is leading the way with its appointment as lead agency on P&G’s Fabric Care North America business in March.
The results for media agencies are broadly similar with roughly the same amount of reviews (up 0.3 per cent) but new business revenue increasing from $437m in H1 2017 to £448m this year. Paul says: “For global media, the trend we’re seeing is very similar to last year. However it’s been an active year for media reviews in the US market, where media new business revenue is up 70 per cent of H1 2017.”
Interpublic’s Initiative has been the strongest media agency performer, presumably one of the factors behind IPG’s market-defying recent growth figures.
Elsewhere among the holding companies WPP maintained its position at the top in terms of both new business revenue and overall number of wins although these fell compared to last year. On the creative front, two WPP agencies – Ogilvy and JWT – were in the top five creative agencies in terms of new business revenue. On the media side, MediaCom was in the fourth place spot on the top media agency table, with $37.5m in new business revenue in H1 of 2018.
Publics Groupe saw large jump in revenue, from $131m to $329m, while its number of wins held relatively steady. Their success was largely driven by strong performances from Publicis Worldwide – which won Mercedes-Benz’s global creative business back in January – and Saatchi & Saatchi which won Campbell Soup’s global business as well as P&G Fabric Care. On the media side its Spark Foundry scored the second largest win of the year when they picked up the Mondelez North America account in February.
I’ve never quite understood the purpose or lessons from “new business wins” articles like this one. Are we to conclude that Saatchi & Saatchi US has gotten its mojo back? For every new business win, there is a business loss — that’s why clients are out looking. One agency is fired; another replaces it. Writing about wins is like reporting about business assets but ignoring liabilities. Let’s not forget that every time a relationship changes hands, there is less money involved. If new business revenue is up, you can be sure that it represents something less than the lost business revenue.
I remember a recent year in which WPP was the “holding company with the most new business wins.” It was also the holding company that did not grow. Ergo, it must have been the holding company with the most business losses. This part of the equation was never reported on.
The agency business is in serious strategic trouble. A high rate of new business wins means a high rate of business losses, because relationships are shorter and shorter. This is not good! Reporting only the “win” side of the equation seriously understates the reality of things.
Author: Madison Avenue Manslaughter