Economic stability leads to rise in agency pitches

The AAR's research shows increased client confidence, but media reviews decrease.

The number of agency pitches is rising dramatically as the feel-good factor returns to Britain's advertisers.

Rising optimism about the long-term stability of the economy has resulted in 205 reviews involving 158 agencies taking place during the first six months of 2005, according to new research by the AAR. This represents an increase of 29.1 per cent on the same period last year.

The findings also suggest that not only are the number of pitches increasing, but also the value of the business being reviewed is rising. Nineteen clients with adspends of more than £10 million announced reviews or appointments in the first six months of the year, compared with 11 during the same period in 2004 - a rise of 72 per cent.

Of the pitches that took place, 66.6 per cent were open contests and 16.7 per cent were between roster agencies; 16.7 per cent of appointments were made without a pitch.

The AAR's research shows that financial services clients are calling the most reviews, followed by retailers and those involved in motoring.

The activity reflects what the AAR claims is the intense competition in these sectors.

Martin Jones, the AAR's director of advertising, cited growing personal confidence among marketers as a major reason for the upswing in activity. Another was what he called the equivalent of the "seven-year itch" - clients preparing to look elsewhere for their advertising, having stuck with their incumbent agencies throughout the long period of reduced growth.

"Clients' requirements of agencies are also changing and they demand a more integrated approach," Jones added. "At the same time, the market has opened up, with a number of new agencies building reputations and attracting attention."

However, AAR executives were puzzled by an 18 per cent decrease in the number of media reviews. "It doesn't stack up, because media agencies seem to be busy," Jones said. "It could be that a lot of small media reviews have been replaced by fewer numbers of bigger ones."

The number of pitches is expected to increase further in the run-up to Christmas, provided client confidence is not damaged either by a threatened global oil crisis or further terrorist bombings in the UK.