Advertisers are grappling with a new reality for 2020, leading to a cut in budgets and delay in any major marketing decisions. It’s having a knock-on effect to agencies and many are now rethinking their approach to new business and the clients they’re open to working with.
Ebiquity recently surveyed the outlook of 44 major global advertisers with a combined media spend of over $15bn. Almost all were rethinking budgets for the year, with 80% planning to cut spend altogether. The consultancy’s managing director for continental Europe, Laetitia Zinetti, said that while it’s not expecting a major “uptick” in brands reviewing their agencies for the next couple of quarters – though there have been a handful – it suspects there will be considerably more in Q3 and potentially a surge in 2021.
As the crisis evolves, marketers will increasingly need to ensure efficiency, especially from a cost perspective. Given the time and investment required to run an agency selection process, we expect that some brands may opt instead to revisit their existing relationship and establish a revised contract. While brands aren’t formally starting pitches yet, we have received two pitch RFPs for global brands who want to use the current period to prepare the process and write the brief. They plan to put out the RFP once the situation has stabilised.”
Ebiquity urged advertisers considering a pitch in the coming months to find solutions that work for all parties. If they can, the first port of call should be to review the current set up and realign any current agency relationships. If they still press ahead, it should not be with the aim of making short-term savings.
We are in unprecedented times, with a significant crisis on our hands. Behaviour has never mattered more, and while changing agencies may bring cost savings, the market perception will likely be quite negative.
Ultimately running a pitch requires a lot of engagement and organisation. But, it needs to be run differently [in the current situation], with even clearer communication, guidelines, expectations, and roles and responsibilities and coordination”.
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First featured on 07/04/2020.