Pitched battles

This week, most of my focus has been on how agencies are bringing in new business – and the impact upon their staff.

A new survey from MediaSense found that 86% of media agencies said pitching was “excessively time- and cost-exhaustive”.

• Over half said it was having a big impact on staff mental health
• 64% said it eroded agency culture

Those stats don’t seem promising to me, but most of the agency sources I spoke to this week said they rung true with their experience.

The problem is, there’s not a lot agencies can do about it. “When you have an over-supplied market like the agency world, clients call the shots,” Paul Hammersley , managing partner at Harbour Collective told me. “Unfortunately the pandemic and the downturn have definitely made it worse. There are more people chasing more stuff.”

While the execs I spoke to said that pitching was having a big impact on their business and staff, none said it should be done away with. Without it, one warned me, smaller shops would likely be shut out of the selection process and the industry would be less competitive – leading to worse outcomes for clients and advertising at large.

Kim Peatling of Havas Media Network told me the best thing agencies could do to soften the blow was to be prepared to walk.

“We put our people first when selecting which pitches we go for and which we don’t. If we don’t tick all of the boxes, then we walk away.”

Though the UK’s avoided recession for now, Germany hasn’t, and slower spending among US tech companies has significantly wounded several big agency groups – for example, R/GA, Stagwell and S4 Capital (the company that owns Media.Monks).

Therefore diversification is the name of the game. More clients outside the tech world means you’re less vulnerable when they all stop spending at the same time – the same rule goes for every sector, from automotive to fashion. Course, it’s not easy to broaden your base, especially if you’re carrying a reputation for work within one sector only. At the start of this week, I collected a bunch of comments from agency execs across the globe on this subject.

Geoff Renaud , one of the founders behind US agency Invisible North , told me his business had had to broaden its client base when spending in Web3 projects began to slow down last year:

“Web3 clients and large tech companies propelled our 250% growth in 2022. Both sectors had marketing budgets severely impacted and we were in a bit of a panic in Q4 22 as we looked forward to 2023. Fortunately, we were able to abstract some of the best elements of the work that we did for these clients and transpose our learnings to recession-proof clients including PepsiCo and Bacardi.”

Similarly, James Kirkham , now boss at UK agency Iconic, told me how his earlier business Holler had weaned itself off one mega-client:

“We were working for Channel 4, (E4, 4Music, More 4, Big Brother) but despite the output, revenues were dominated by one client and this was dangerous. So we took this thinking into food and beverages, which led us to work on Innocent Drinks and Red Bull. As an agency, you need to find the common thread which works equally from broadcasting, beer to badminton.”

You might be thinking that this is old news – thus it ever was, and all that. But at the moment, agency businesses across the board are hungrier than usual for new business. So they're likelier to be gunning for new work, and the impact on staff is likely to be even worse.

Elsewhere on The Drum...

My colleague Sam Anderson spoke to some junior marketers about how the cost of living crisis had affected them. We're really interested in this topic - so get in touch if you think there's something we should know about.

I interviewed Rosie Bardales, the new CCO of Wunderman Thompson in New York, as she prepared to move back to the US from Paris. She's hoping some of the stuff she's learned in Europe will help put more of a shine on the network's NY outfit.

And today, Jon Williams of The Liberty Guild wrote for us, asking why more creatives don't run creative businesses.

Have a great weekend folks.