Why the new business beauty contest is bullshit
Agencyland’s relentless focus on new business and pitching is increasingly hurting both clients and agencies alike, argues Nic Christensen.
If there’s one question I get from agency bosses, more than any other, it is this: “Any new gossip on what’s pitching?”
After two and half years at Mumbrella, and close to four years as a media/marketing writer, you get accustomed to the fact that agency heads – be they media or creative – always have one eye on potential new business.
But what worries me is the growing pressure on agencies to deliver a big, fat, fresh new piece of meat, (aka a major client), every couple of months.
Well said, Nic. If new business is a beauty contest, what would you call the endless award ceremonies and rankings then?!?!!?
Hi Jackson,
No doubt awards and rankings contribute to the beauty contest (acknowledges Mumbrella’s awards are part of this) but I’d argue one of the challenges is that much of the performance, in these, is judged on new business.
Cheers
Nic – Mumbrella
Re: your question : “.. when can we agree that the collective race for new business has become unsustainable?”
everyone in agencyland already agrees with that Nic, but i dont hear you suggest an alternative.
if you have an idea on growing profits, rather than just stating the bleeding obvious, we’re all ears.
As you correctly mention, our global targets are to grow x% revenue and profit every year, same as all our competitors. No business accepts profit declines or sales declines. People get sacked for that. There is a limit to what revenue can be generated from existing business – so the only solution to grow profits every year is to win new business every year. I don’t see the shame in trying to grow our business every year, nor is there any other option quite frankly.
With clients reducing spend, taking certain things in-house, new smaller agencies entering the market, not to mention the role of procurement consultants happily driving down profitability of agencies, its clear not everyone in the market can grow.
Some will win, some will lose and either shut up shop or be folded into other agencies.
Eventually the number of agencies that the market can naturally bear, will stabilise to whatever number the market demands.
This is not a “race to the bottom”.. this is business, this is life.
Yawn.
Hi Hjt,
The honest answer is no I don’t have a solution but to be honest neither does anyone else (at least who I talk to).
I have a platform and so today I’ve used it but this is a problem I keep seeing and hearing about so I wanted to raise it.
I’m loath to use the “race to the bottom” cliche because we’re already there – my challenge is what do we do to make the situation sustainable again?
Otherwise the next big downturn in the economy then there are going to be a lot of people from agencyland out of work. Or maybe that is the solution – agency economic Darwinism?
Cheers
Nic- Mumbrella
Nic, maybe the answer sits in longer term client agency contracts. Across my career I have witnessed the adverse effect of pitching, on the current clients within the agency and the agency staff. Six mths to pitch, six months to transition the client, endless time becoming experts in new categories, then low and behold time to re pitch! Client Agency partnerships built the correct way can last for many many successful years !
@Nic – that’s a much better question, but i didn’t see it anywhere in your article.
“what do we do to make the situation sustainable again?”
this would be a great thought piece as we all know the problems, but we rarely have a platform to discuss them.
critically we need input from clients, and media vendors, not just agencies.
some of my suggestions, for discussion:
* build and launch industry wide automated media booking platform linking all 3 major TV networks, fairfax, news, google, facebook, and all media agencies who want to participate. Eliminates media queries/pricing errors, reconciliation effort on both sides, provides full audit records, provides transparent view of inventory, and resources on all sides can be taken out to be reinvested in other areas to better service clients or simply make agencies more sustainable
* Media agencies merge with creatives and go full-service again. Put the toothpaste back in the tube. Clients are sick of managing multiple agencies as well as manage their brands.. efficiencies on both sides to be gained here
I’m sure there are many better brains than mine who can think of more ideas.
But, deep inside, I sort of believe in “agency economic Darwinism” as you put it.. not everyone can survive, and not everyone will
New Business? Ignore it at your peril. Established business? No such thing, most of what might be considered established is potentially under attack.
Remember “Thinks…thanks to Horlicks”? Or “Thinks….thanks to Lifebuoy”?
What about “When your child loses a tooth, that tooth is gone forever.”
Advertising is hard work, even when all is running smoothly, which isn’t all that often.
However, the real work is always during one or more of the three P stages: Procuring, Poaching and/or Pitching.
90% of all agency/ client relationships are one phone call away from ending so for long that stays the same new business and pitches are here to stay.