Exploring the Insights from the 2023 New Business Barometer: Key Takeaways for UK Agencies
In a dynamic and ever-evolving industry, staying ahead of the curve is crucial for agencies seeking to thrive. The 2023 New Business Barometer, a collaborative effort between jfdi, the UK’s leading specialist new business consultancy, and Opinium, an award-winning strategic insight agency, offers a comprehensive analysis of the UK advertising and marketing landscape. The sixth annual survey, conducted among 205 new business professionals in UK agencies, sheds light on new business performance trends in 2022 and insightful projections for 2023.
Diverse Agency Landscape
The survey encompassed a range of agency sizes, with 16 disciplines across 205 small, medium, and large agencies within the Marketing Communications sector.
Ambitious Revenue Goals
Medium-sized agencies emerged as the most ambitious in terms of new business revenue targets, witnessing a significant 47% increase from 2021 to £3,143 million. In contrast, small agency targets faced a dip of 14% to £719,000, continuing a downward trend over three years. Large agencies experienced a slight 2% uptick from 2021 to £6,509 million in revenue targets.
Strategic Investment in Marketing
Interestingly, the study highlighted diverse investment trends in marketing across different agency sizes. Larger agencies demonstrated a 4% increase in marketing investment over two years, reaching £299,000 in 2022. Small agencies, on the other hand, saw an 11% decrease, settling at £56,000, while medium agencies escalated their investment by 33% from £107,000 in 2021 to £142,000.
Prospecting and Conversion Strategies
The survey delved into prospecting strategies, with marketing as a sales engagement tool claiming the top spot at 70%. Management network connections and alliances/partnerships were also at 50% and 39%, respectively. Notably, there was a 10-percentage point increase in agencies seeking client referrals, now standing at 39%.
Pursuit of Opportunities
Medium-sized agencies displayed a notable 15% increase in pursuing opportunities, reaching an average of 47. Large agencies saw a marginal 1% growth to 47, while small agencies remained steady at 26. However, the average value of actively pursued opportunities experienced fluctuations – a 35% drop to £88,703 for medium agencies, a 4% rise to £207,165 for large agencies, and no change at £45,727 for small agencies.
The Pitch Landscape
The investment in a pitch was found to average at £11,015, with small agencies spending £6,762, and large agencies investing £26,478. Surprisingly, this lower figure could indicate a lack of regular measurement and assessment of total pitch costs. Medium-sized agencies boasted the highest pitch conversion rates at 45%, while small agencies lagged slightly at 40%, followed by large agencies at 41%.
Client Chemistry and Success Factors
A strong client relationship emerged as the most common reason for winning a pitch, cited by 69% of respondents. This factor gained even more importance for medium (73%) and large agencies (81%). Other crucial factors included relevant expertise/capabilities (67%) and addressing the brief/commercial objectives better than competitors (56%).
Challenges in the Industry
The study also revealed challenges faced by agencies across the spectrum. Pricing projects for profitability became more complex for medium and large agencies. Additionally, agencies of all sizes struggled with resourcing and investing in new business opportunities.
In conclusion, the 2023 New Business Barometer presents a valuable snapshot of the UK agency landscape, offering insights into revenue targets, investment trends, prospecting strategies, pursuit of opportunities, and pitch dynamics. With the industry in constant flux, adapting to these insights and adopting strategic approaches will be pivotal in not just surviving, but thriving in the ever-evolving marketing communications sector.
For further details on the 2023 New Business Barometer, you can contact mark@jfdi.uk.com. The survey was conducted between October to December 2022 among 205 new business respondents in UK agencies of varying sizes.
And the 2024 Barometer launches next month!
About jfdi and Opinium
jfdi specializes in new business consultancy, exclusively working with agencies across the marketing services sectors. Their expertise lies in helping agencies win new business through training, consultancy, coaching, and providing senior new business consultants & prospectors in-house.
Opinium Research LLP is an award-winning strategic insight agency that empowers clients to make informed decisions by understanding people’s thoughts, feelings, and actions. Their methodologies deliver insights, strategic counsel, and recommendations that drive change and positive outcomes for their clients.