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Agencies Face Tougher New Business Environment

Lack of assignment clarity makes it hard to break through to prospects

December 14, 2016

New business development is often a difficult task for ad agencies. In addition to the day-to-day upkeep required for current clients, agencies must also constantly perform the challenging work of searching out new opportunities and partners. According to research, the process doesn't appear to be getting any easier.

US Ad Agency Professionals Who Believe It Is Harder to Obtain New Business This Year, by Reason, Oct 2016 (% of respondents)

In an October 2016 survey of ad agency professionals by business development group RSW/US, 43% of respondents said that obtaining new business had gotten either “harder” or “a lot harder” this year. Among those who suggested it was more difficult to obtain new business, 63% said it was because it was harder to break through to prospects, while another 46% said there were simply fewer opportunities.

RSW/US is not the first organization to highlight these ongoing struggles. Take for example an April 2016 survey by Joanne Davis Consulting, which noted that communication issues between clients and agencies during new business negotiations are often a key pain point. Nearly 50% of agency professionals surveyed mentioned lack of assignment clarity from clients as the most challenging aspect of the new business process.

Areas Which Agencies Find to Be Most Challenging During the New Business Process According to US Ad Agency Professionals, by Level of Challenge, April 2016 (% of respondents)

Despite the various obstacles posed by new business pitches, agencies do report some successful methods for finding new work. Referrals were one popular approach, with nearly three-quarters of respondents in RSW/US’ survey mentioning the tactic. Business generated from work with existing clients was the second most popular tactic.

—Jeremy Kressmann

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