Despite the ongoing advertising downturn, the majority of UK agencies managed to increase or sustain their investment in marketing and new business during 2002.
A survey of over 150 agencies across advertising, PR, direct marketing, digital and media disciplines shows that advertising agencies had the largest number of staff dedicated to new business and marketing, with 40% employing more than three staff and 70% employing at least two.
This number rose when only the top 20 agencies were considered, with 50% having more than three staff dedicated to seeking out new business. 89% of media agencies were found to employ two to three or more people in their new business and marketing efforts.
The second annual survey from the AAR found that over 40% of PR agencies employ more than three people in this area, followed by digital agencies with 35% employing three or more dedicated marketing and new business staff.
In financial terms, a poor year for new business in 2001 prompted a mixed response from media agencies in 2002. Just over half allocated the same budget as 2001, whilst 32% managed to increase their expenditure. Amongst the top 20 advertising agencies 80% maintained their new business budget year on year.
According to the AAR, advertising agencies were the greatest investors in marketing and new business, with over 30% allocating more than £200,000 per year. It was only amongst the top 20 agencies that budgets in excess of £500,000 were spent on marketing and new business.
The majority of media agencies allocated budgets in the range of £50,000 to £200,000. PR agencies were the least prone to new investment, with almost two thirds spending less than 50% in this area.
Commenting on the survey, Paul Phillips, director of advertising and media services at the AAR said: “Most media agencies have recognised the value of marketing in their new business efforts, but differentiation and stand-out is proving difficult to achieve. Future new business success will be about agencies ability to demonstrate the benefits of how they work with clients (and indeed other agencies) as much as their promise of what discounts they can deliver.”
The survey comes just days after the IPA’s Bellwether Report dampened hopes for a recovery, with one in four media ad companies revising their budgets downwards during the final quarter of 2003 (see IPA Bellwether Report: Down But Not Out).
