Future Of New Business
Be more like Kevin McCloud When It Comes to Pitching For New Business
The AAR Group CEO makes new business predictions that will "encourage some and disappoint others"
07 March 2023
If you type the word pitch into Campaign’s search bar there were 633 articles on the subject in 2022 and by 10 February 2023, a further 57 had already been written. A straight line extrapolation would suggest there will be around 680 articles on the subject by the end of the year (statisticians will no doubt say it’s not as straightforward as this, but you get the overall point).
The industry’s interest in pitching has been a constant and understandably so. It’s an obvious source of momentum and delivers appearance of success for agencies, it’s newsworthy for journalists and commentators, it is by far the most popular (in volume if not enjoyment) method of CMOs reviewing their agency arrangements and it was the foundation on which AAR was established.
A legal high for agencies
For agencies, there are three sources of growth; new business, organic and acquisition. Of the three it’s recognised that new business, usually won through a competitive pitch, is what can galvanise an agency to show up at its best, stir the emotions and deliver a feel-good factor that, for those who have enjoyed it, is nothing short of addictive.
In past times, if you worked in an agency, the chance to get involved in a new business pitch was the opportunity to work with the best strategic and creative brains, and for the emerging agency talent, a fast-track to success. If you’re not convinced check out the early careers of Karen Blackett OBE, Helen Calcraft, Adrian Coleman, Johnny Hornby, Annette King, James Murphy or Nicola Mendelsohn CBE on LinkedIn. They were all heavily invested in their respective agencies new business activities and to this day maintain an over-indexed focus on new business for their respective companies.
But is there a hint of too much rose and nostalgia in the spectacles through which we are looking? What of the individual pressure and personal sacrifice, continually working late nights and weekends, unchallenged agency financial investment and less than environmentally aware pitch practices, remember all that (single use) poly board, in what was at the time considered to be good pitch practice?
The launch of the Pitch Positive Pledge in 2022, championed by Julian Douglas, outgoing President of the IPA and Andrew Lowdon former Director of Agency Services at ISBA has been an initiative welcomed across much of the industry. While it’s not the first attempt to improve the overall pitch experience, it has definitely caught the mood of the industry in a way that previous efforts have not quite managed, and we hope the solid foundations on which the pledge has been built prove to have a long-lasting positive effect for the benefit brands and agencies alike.
Alongside all the good intentions and improved practices around pitching there’s also been some unhelpful, and often unsupported, claims that “the traditional pitch is dead” without much of an explanation around how they plan to do things differently, or how on earth they’ll help CMOs and their procurement colleagues to navigate a confusing and ever-changing agency landscape.
In reality, a traditional pitch will probably involve a few key stages: an element of marketplace exploration, identification of candidate agencies, competitive challenge, commercial negotiation and appointment. Each element will give agencies an opportunity to demonstrate their capability using examples drawn from current or former clients, with thinking and execution applied to the prospective brand’s challenge for which they are pitching. On the face of it there is nothing wrong with this as an approach.
The problem is where the proportionality of the ask is not commensurate with the opportunity and size of the prize.
Sometimes a “traditional pitch” can be just the right approach when managed well and meets the dual requirement of the CMOs team needing the right level of assurance and insurance, with an agency’s opportunity to shine, all without boiling the ocean.
But this is not the only evaluation method open to brands when evaluating the market, and we have been working hard at AAR over the last few years to develop new ways for CMOs and their teams to meet, evaluate and partner with agencies.
These could be strategy-only pitches, workshop-style pitches, agency safaris and more recently our Rapid Response pitches designed to empower clients to make a quick decision with confidence and select an agency in a matter of days.
Then there are the lower income or project opportunities that should not be asking for any original thinking and CMOs should judge an agency’s capabilities based on what it has delivered for existing clients. This evidence together with a check for chemistry between the two prospective teams should be enough upon which to make an informed and confident decision.
What of the role that CMOs and colleagues in Procurement play?
It would be naïve to expect brands not to review their agency arrangements from time to time.
The reasons are numerous; because they have to (Government, TfL), company governance, there’s a new requirement that incumbent agencies cannot service, dissatisfaction with incumbent agency performance, to save money or to take a different direction (which often coincides with a change in leadership or CMO).
And whatever the reason, who can blame them when there’s a whole industry that’s been developed to drive agencies growth ambitions. Investment in agency new business resource across money, time and talent continues to increase and the ancillary businesses that feed off this are numerous - cold callers, prospectors, pitch doctors, trainers and even hypnotists have all supported agencies in their quest for growth and pitch success.
But time and time again we see that the agencies that are most content with the balance between net new business and organic growth, are those who are most selective about what they will pitch for, turning down many opportunities that others would jump at.
The rise in importance of organic growth
As agencies continue to develop multiple capabilities across different elements of the comms spectrum, the opportunity (and commercial need) to offer more services to existing clients continues to increase. Every week, our AAR consultants are out meeting with agencies to be introduced to a new capability, division or service offering.
And no one would argue against a more joined up approach to communications across the customer journey.
During lockdown CMOs were particularly open to hearing form their agency partners about services and skills for which the agency had not originally been appointed but might be the difference between keeping the lights on or going dark.
And while the Covid years were unique, agency CFOs know better than most that growing the relationship with an existing client organically is commercially far more attractive than the thrill of the pitch, which only if won, can often take three years before reaching profit levels that are what are being demanded by HQ.
What does 2023 hold in store?
What’s certain at the start of any year is that there’s a new business budget to be delivered and other than for the lucky few, a pipeline that will need careful attention and nurturing if there’s any hope of delivering that budget.
With this in mind here are four predictions for the forthcoming year that will give encouragement to some and disappointment to others.
1. The manner in which new business opportunities come to market, are fought for won and lost will be much more similar than different to the way it’s currently done.
Pitching in our world is here to stay, if for no other reason than a better way hasn’t been identified or universally adopted. What changes may come will be incremental or inconsequential and there are too many CMOs, Procurement professionals and agencies alike that think not only is it a good approach, but that it delivers better work and ultimately better business performance.
At AAR we will continue to insist to our clients that any pitch process must be commensurate with the size of the prize, that timings are considerate and that agencies will have full access to all necessary information, all of which will deliver a better pitch experience for CMOs, their teams and agencies.
2. Whatever the volume of new opportunities, there won’t be enough to satisfy everyone
2022 saw an overall year on year -18 per cent reduction in new business opportunities according to AAR research, but the two year trend was +20 per cent.
But a glance at AAR’s annual research into which agencies are the best at new business suggests that there are only a handful of agencies that are able to feast on an excess of opportunities while the majority are competing for far fewer, and will therefore be even more reliant on organic growth (or acquisition) to meet their growth ambitions.
It is perhaps only in media where the volume of new business opportunities seems to be on a continual rise, driven by the global super-tanker brands on their own perpetual cycle of reviewing every few years together with a domestic market that is active for all the reasons stated earlier. For both global and domestic relationships, loyalty extends only as far as it’s commercially advantageous to remain so.
3. Respectful growth will be better all round
As previously stated, growth can be organic, through acquisition or through a pitch. Those agencies that plan their growth through all of these lenses, setting the dials on their GGE (growth graphic equaliser) in consideration of their people, the quality of business won, work delivered, talent attracted, revenue enjoyed, contribution to clients’ business made and awards won will enjoy longer term success by whatever metric they choose to measure it.
4. Agencies need to be more like Kevin McCloud
For those of us who have enjoyed Grand Designs over the years, the presenter Kevin McCloud, will from time to time, come across a couple whose expectations are completely out of kilter with their ambition.
More often than not there’s a reality gap (or chasm) between budget and desire, unrealistic timeframes or the subject of the show taking on project management duties alongside their own day job while living in a caravan with a partner who’s expecting.
And there’s always the scene where Kevin turns to camera and, as if sharing a secret with the audience, shakes his head, rolls his eyes and suggests that the subjects of the show are living in cloud cuckoo land, all delivered with a rye knowing been here a thousand times slightly sardonic smile.
Grand Designers sometimes pull off all three, but rarely, very very rarely.
So when triaging new business opportunities agencies should be more like Kevin, casting an even more critical eye over what they are being invited to pitch for. If it’s a bit too Grand Designs and not enough Covid Nightingale Hospital (clear brief, realistic expectation, budget and timescale) then agencies should walk away, step back, just say no. Whatever short term disappointment you suffer will be replaced by the smug sense of satisfaction when the horror pitch stories from others start to surface.
Victoria Fox is CEO at AAR Group