Macroeconomic headwinds stalled agency reviews during the first half of last year, but the gridlock appeared to burst only a few months later, as marketers such as General Mills, Kraft Heinz and Kimberly-Clark named new shops to their rosters.  

Nearly five months into 2024, creative and media agencies appear poised for another busy year. But while reviews are humming along, the nature of them has changed. There are fewer full-service reviews and performance marketing reviews are slowing, and industry insiders reporting pockets of activity in the social, influencer and business-to-business spaces. Pitches seem to be up overall, but the value of them to agencies is down as clients more sharply negotiate their compensation.

Social vaults to the forefront

Most of the agency executives and consultants who spoke with Ad Age noted a rise in social new business opportunities. Oliver McAteer, partner and head of development at Mischief@NoFixedAddress, said brands are approaching the agency to support social strategy, as well as social campaigns designed to create cultural buzz, such as Chili’s wedding catering contest.

Increased demand for these types of services comes as clients throw their weight behind social and influencer marketing in pursuit of Gen Z audiences.

Also read: Inside the state of influencer marketing agencies

“Marketers are starting to realize that their mainstream agency may not be set up to do social and influencer work,” said Greg Paull, principal of consultancy R3. “We’re running three social reviews right now, and we’re finding the influencer- and social-first agencies have a very different take on the whole approach. It’s been pretty refreshing.”

Some specialist agencies have already notched big wins in 2024. In February, Haleon chose Brandtech Group’s Collectively as its principal influencer marketing agency in the U.S. Haleon also considered creative agencies and public relations shops while conducting its review, U.S. Chief Marketing Officer Katie Williams told Ad Age.

There’s still creative and media work out there, too. PwC, Lowe’s and T-Mobile have named new lead agencies this year, while General Motors, Gap, eBay and General Mills are in the process of reviewing accounts. Firehouse Subs just named its new agency lineup after concluding a review.

While there may not be as many massive, full-service reviews as in years past, a healthy mix of agency of record and project opportunities means agencies are keeping busy. “It has definitely picked up,” said Michelle Tang, global chief growth officer at Interpublic Group of Cos. McCann. “My pipeline this year is significantly larger than [it was] at this time last year.”

Tang declined to give specific account details. 

Gale CEO Brad Simms said the agency has seen expansion in its existing accounts over the past four months and more B2B marketing reviews. The agency has also picked up integrated AOR assignments for Athenahealth and Fogo de Chão this year, in addition to loyalty and CRM work for Chili’s and Papa Johns. 

A balancing act

Performance, which CMOs have prioritized in recent years due to pressure from the pandemic and economy, is still a vital part of the marketing equation. But many agency executives said that brands are looking to strike a better balance between upper and lower-funnel marketing to increase awareness and differentiate themselves from competitors. 

“Almost all of the brands coming to us right now have big, meaty brand assignments. They need to really redefine who they are,” said Lindsey McNabb Hover, chief marketing officer at BBH USA, while declining to name them. 

As marketers tweak their strategy, some consultants expect performance marketing agencies to sell or make acquisitions to round out their offerings. 

“There is an absolute business need for these performance shops to expand their offerings and enter new territory,” said Steve Boehler, founder of search consultancy Mercer Island Group. “And a lot of these high-flying performance shops have [private equity] money backing them, so there’ll be a natural inclination to grow quickly.”

Budgets lag behind

An increase in new business opportunities doesn’t necessarily mean bigger paydays. While some people noted an uptick in spending compared to 2023, multiple agency executives and consultants Ad Age spoke to mentioned increasingly smaller budgets. 

“Budgets are definitely down across the board because there’s so much pressure on marketing with the economy and inflation,” one chief growth officer said. “There’s so much pressure to make every single dollar work really hard.”

Global creative pitches in January and February of this year brought in 47.6% less revenue compared to the year-earlier period, R3 reported. On the media side, pitch revenue was down 56.3% year-over-year. Paull said it’s been a trend over recent years to have “more pitches for less money,” which has been a “real challenge” for creative shops.

Some companies, however, are taking steps to rectify the issue. Roth Ryan Hayes is helping five clients renegotiate agency contracts in lieu of a formal review, according to Matt Ryan, the search consultancy’s CEO. 

“[We] have an unusual influx of work from marketers who would like to keep their agencies but need to redress their compensation, maybe because scopes of work have changed so significantly or because they haven’t looked at what they’re paying them in so long,” said Ryan. “There’s five competitive reviews that are not going to happen.”

Cautious optimism

A bruising election rematch between President Joe Biden and former President Donald Trump may impact brands’ spending towards the end of the year, as marketers pause to consider economic and other implications of a new administration. 

“The [election] typically does put a little bit of a damper on things for a short period of time,” said Lisa Colantuono, president at consultancy AAR Partners. “It’s all a domino effect.”

Also read: 2024 US political ad spending expected to hit $12 billion

But many consultants and agency executives are bullish about the next few months. Simms said that brands have a “better handle” on how their business sits within the tumultuous economic environment and thus are more committed to marketing spend. 

“We still have a lot of uncertainties, but they’re uncertainties that are more certain than they were one year ago,” Simms said. “I think people feel a little bit better about that.”