Quarter of ad agencies invest in new business

A quarter of advertising agencies have upped their spend on new business and marketing to draw in new accounts.

A survey from the AAR showed that 40 per cent of agencies employed three staff dedicated to new business. Half of the top 20 agencies had more than three working exclusively in that capacity.

The survey comes almost a year after several agencies laid off their new-business directors. It reflects increased competition in the sector, according to the AAR's owner, Martin Jones.

"It would appear that as the market has become more competitive because of the number of agencies, they are having to increase their commitment to new business. The most significant factor has been that agencies are increasing their headcounts as strategic input into new business when targeting clients becomes more important than glossy mailers," he said.

The AAR sent questionnaires to 150 agencies across advertising, direct marketing, media, digital and PR to find out the number of people working specifically in new business. It also asked if their principal role was full- or part-time and the overall budgets allocated to new business.

Three-quarters of all the ad agencies questioned said the role of new-business director was full-time, but only one-fifth of the top 20 agencies said this was the case.

Digital and direct marketing agencies said that more of their new-business staff were full-time. But media agencies had reduced their headcount in new business, with 15 per cent of them employing fewer new-business staff in 2002 than the previous year, although one in three actually increased their headcount in these areas.

Consequently, advertising agencies were the biggest investors in new business, with 30 per cent ploughing more than £200,000 each year into new business, not including salaries and time costs, while two of the top 20 agencies spent more than £500,000 on business acquisition.

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