Agencies are also focusing more on media as creative becomes a less lucrative part of the business for holding companies. Last week, the CEOs of Interpublic Group of Cos. and Publicis Groupe both cited cuts in “traditional advertising” in reporting results for the second quarter of the year.
IPG’s Integrated Advertising & Creativity Solutions segment, which includes agency networks such as McCann Worldgroup, MullenLowe Group and FCB, saw a 3.8% decrease in organic revenue for the quarter. Even Publicis, which outperformed Omnicom and IPG in the second quarter, reported revenue growth for its creative businesses in the low single digits.
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Consultancy R3 has tracked 117 creative reviews in the U.S. this year, down sharply from 153 at this time in 2022. On the media side, there have been 44 reviews, down from 51 last year.
But while the number of reviews is down, the budgets for those pitches have been greater. The average billing in a creative review is $19 million this year compared to $11 million last year, according to Greg Paull, R3’s co-founder and principal. On the media side, the average billing is $46 million, up from $36 million last year.
That doesn’t mean, however, that revenue from those accounts is up. In February, R3 reported that global pitches brought in 35% less revenue compared to the year prior.
Melissa Lea, founder and director of Muster Consulting, said she noticed a “little uptick” in creative reviews this year compared to last year. Meanwhile, Maggie Jennings, the chief growth officer of Tombras, said big creative opportunities “slowed a bit but [are] picking back up” to the point that it’s becoming one of the busier years she's seen.
A lot depends on the agency. Mischief @ No Fixed Address has “taken on 14 new brands since August last year—none of which have come from the traditional pitch process,” said Oliver McAteer, partner and head of development at the agency.
He added: “That’s not to say we do not pitch. We just like to keep the runway clear for opportunities we feel are right. We’re not all things to all people. And we like that.”
McAteer said that the agency turns down around 95% of all approaches it receives—which exceeded 200 this past year.