New business is still in doldrums

New-business opportunities available to UK advertising and media agencies are down by almost a quarter on last year, according to new research from the AAR.

The report, which measures total new-business activity for the first six months of this year, reveals that there are 22.4 per cent fewer reviews involving UK agencies this year. It also shows that the figure for UK-only new-business reviews is down by 24.3 per cent.

The AAR research, compiled by its managing director and head of advertising, Martin Jones, also points to a qualitative decline in new-business opportunities. Only 17 of the top 100 advertisers (according to Nielsen Media Research data) have reviewed part or all of their business in the first six months of this year. This compares with 23 last year.

The IPA president, Stephen Woodford, commented: "I think everyone knows it's quieter at the moment. It certainly feels that way. But, when there's a recession, clients are much more cautious. The things that usually herald reviews, such as product launches and brand repositioning, are curtailed during recessionary times. When clients feel uncertain about the future, they're less likely to change agencies."

The research claims that fewer clients are willing to move their business without a review. Only 28 per cent of clients did so, compared with 38 per cent last year.

The report also revealed that, on average, pitchlists have grown by 0.4 agencies per review on last year.

However, this figure is complicated by the lack of transparency on the part of reviewing clients. Only 57 per cent of companies reviewing provided details of the number of agencies involved in their reviews.

Woodford added: "You have to work bloody hard to get on to a shortlist these days. It's almost as though you have to do a pitch to get on to a pitch-list. Clients are taking things such as tender documents and research increasingly seriously and, because the climate is tough, agencies are willing to be part of five or six-strong shortlists."