“The AOR is over,” consultancy R3 declares in its ranking of agency new business wins for 2022, pointing out that while there was an 11% increase in the number of global pitches, overall those pitches brought in 35% less revenue compared to the year prior.
'The AOR is over'—new business pitches up but revenue from them fell in 2022
In the U.S., both creative and media pitches decreased in value by more than 40% last year, according to R3's annual report. With revenue declining for “traditional” agency services and clients increasingly choosing to award projects rather than name long-term partners, R3 said that shops are actively seeking new revenue sources.
“The race is heating up to diversify services beyond traditional creative and media,” Greg Paull, principal, and co-founder of R3, said in the report. “The future is in e-commerce, data and performance marketing, and agencies need to sell more advanced solutions to clients. The biggest moves in 2022 have all been focused on the ability to serve the convergence of media, commerce, entertainment, and shopping.”
Publicis Groupe led all other holding companies globally with 2,249 wins and $804 million in increased revenue as a result of new business, according to R3's ranking. Second was WPP, which racked up 1,786 wins that amounted to a $425.1 million increase in revenue, according to R3.
The decline of the AOR was also referenced by Publicis CEO-Chairman Arthur Sadoun when the holding company released earnings last week. “There are fewer creative pitches every day because clients prefer to add partners or reduce partners on a project basis than completely and radically changing agencies in most cases,” he said.
Paull said initiatives like Publicis' “Power of One” and Havas' “Villages,” which bring resources from multiple agencies in the network to bear for a client, “resonated” with marketers last year. “The biggest advertisers are consolidating their marketing with [agency] holding [company] groups that present a clear strategy for integration. Publicis Groupe has also leaned into its Sapient and Epsilon acquisitions to fuel expanded consulting and data solutions,” he added.
On the media side, Publicis’ Starcom led the pack globally by generating $165 million in new business revenue in 2022. This was 60% higher than its holding company sibling agency Zenith, which was ranked second, followed by Dentsu’s Carat at third and Omnicom’s PHD at fourth.
Globally, Havas led all creative agencies with $156 million in new business revenue across 363 wins, according to the R3 report. Some key wins for Havas last year included picking up AOR duties for Harman Global, and winning a U.S. project for Pfizer.
WPP's Ogilvy came in second with $109.9 million in new business revenue across 489 total wins. Third was sibling VMLY&R, which generated $105.3 million in new business revenue; fourth was Publicis' Leo Burnett, which posted $99.4 million in new business revenue, according to the R3 rankings.
In the U.S., Interpublic Group of Cos. agency R/GA led the pack in terms of new business, according to the report, with $59.4 million in revenue across 53 wins, followed by Publicis' Leo Burnett and WPP's VMLY&R. Independent shops OKRP, Barkley and Zambezi took up the next three spots.
R3 said this is the first time that trio of indies has been a part of its top 10 creative agency ranking, “surpassing more established multinational agencies with longer heritage.” And Paull expects more to follow.
“Looking beyond the top three agencies on the creative leader board, the rise of new guard independent agencies in the U.S. suggests that CMOs are looking for bold ideas that maximize value,” Paull wrote.