Pitch spend reaches £500,000

Almost half of the leading advertising agencies are investing more than £500,000 a year in new business and marketing, according to statistics from the AAR.

Forty per cent of the top 20 spend more than £500,000, compared with 17 per cent of all ad agencies.

All of the top 20 ad agencies invest more than £100,000 in new business, according to research carried out across 300 agencies. The spend figures include pitch and other marketing costs, but not senior management time.

Digital agencies are closing the gap on ad agencies in terms of new-business investment, with more than 8 per cent spending more than £500,000.

In contrast, not one agency in the media, direct marketing and PR sectors spent more than £500,000.

Digital agencies also have the largest new-business teams, with 47 per cent employing business development and marketing teams of three or more. This compares with 27 per cent in media agencies, and 24 per cent in ad agencies.

Heads of new businesses reaching board level was also highest among digital agencies, with 78 per cent sitting on the board. This compares with 55 per cent at media agencies, and 40 per cent at advertising and direct agencies.

Digital and direct agencies are the largest users of "cold calling" companies to assist with new business.

Less than 25 per cent of media and ad agencies use this form of outside help.

Martin Jones, the managing director of the AAR, said: "Unsurprisingly, advertising agencies lead the field in terms of investment in business development and marketing, but the gap is closing with digital agencies increasingly investing in this area."


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