2016 Will Be a Bonanza for New Media Agency Business

Three Reasons Why 2016 Will Be Just As Busy as This Year

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There is so much new media agency business around this summer that everyone and his dog thinks this is a once-in-a-lifetime moment. I beg to differ.

You probably don't want to hear this if you work on an agency's new-business team. If you've forgotten what a weekend feels like and you're forgetting the names of your significant others, then it's unlikely to be welcome news.

Here are three reasons why 2016 could be just as busy as 2015 on the media agency pitch front:

1. Competitor response to reviews

We've seen this pattern before. A big blue-chip client opens up a review. The company secures additional media value (defined as talent and technology as well as paid media pricing). That gives it competitive advantage over its competitors, which then decide they too need a better deal to level the playing field. Reviews, like London buses, tend to come in threes.

Traditionally, this pattern occurs in one sector at a time, spreading the new-business load. But this summer we have major players looking for new agencies in every sector, from automotive to packaged goods, health care to beauty.

The competitor response will be as much of a major event in 2016 as the initial round of reviews have been in 2015. These companies will have started to see the impact of their new agency deals by early next year and will be eager to take action (if they aren't already aligning their marketing and procurement goals to prepare for their reviews).

Our database of past and ongoing reviews shows that a year after Mars reviewed its global media, the accounts for Heinz in Europe and the global accounts for General Mills and Mondelez are up for grabs.

In the financial sector it's the same. Last year, MasterCard launched a review of its global media; this year, Visa is looking for a new agency.

In the drinks business, last year Pernod Ricard reviewed its U.S. media; this year, Diageo is looking at North America and Bacardi is reviewing its global media. Last year, AB InBev reviewed in Europe and the U.S.; this year, Corona and Heineken are conducting global reviews.

2. Securing resources for digital, data and content

The second reason why we expect many of the second-, third- and fourth-placed brands in each category to consider opening up reviews next year is that the challenges they face are no different from those the category leaders are trying to address. Every single marketing organization in the world is looking to deal with the same issues: They want to secure the right agency resources and expertise to address the challenges of digital, data and content.

Just as in 2015, many of these "next-tier" reviews will be driven by strategic reappraisal of media agency resource requirements, concerns over transparency, and desire to implement new procurement standards across the marketing roster. None of these factors are exclusive to the category leaders. In fact, the trickle-down effect could run into 2017 as every media-savvy brand works through the same process.

In addition, many advertisers are still operating with outdated agency contracts and will need to review their media agency scope of work in light of the new communications environment. Some will do this behind closed doors with existing partners, but many will seek to open up reviews to better assess the value that exists across the market.

3. Factoring in the three-year contract cycle

The final reason for 2016 being another busy 12 months is that the normal round of reviews still need to be factored in. In our tracking of the global media pitch market, we see many companies still operating on a three-year cycle, so the base level of media pitches will still be keeping agencies busy.

We have clearly moved on from the era when brands and agencies worked together for decades. While there are a few such partnerships that do exist, the traditional approach today is to head for the open market.

That means that if a brand has a contract cycle coming to an end, its business is more likely to hit the trade press and attract the interest of competing agency new-business teams.

The bottom line is that 2015 is not a blip -- it's a trend. The media agency pitch market will be very busy for at least 18 months.

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