Oleg Laptev via Unsplash
While 2024 was fairly normal in the frequency of pitches - account movements, a focus on media and a rise in contract work made for a dynamic year, according to consultants.
What pitch doctors saw is what they see each year, a mix of large high-profile national and international pitches, blended with the non-headline grabbing accounts.
While pitches slightly skewed to media, overall the market saw equally valuable creative and media opportunities.
Media, to December in 2024, saw 104 accounts go to pitch worth $873.9 million USD (est. $1.350 billion AUD), according to exclusive data supplied by COMvergence.
The year is perhaps more interesting for the things that didn’t happen - the dogs that didn’t bark, TrinityP3 managing director Nathan Hodges told AdNews.
“There was no marked slowdown in pitch activity over the year, which at the start of the year - like every year - lots of people were worried about. And there was no marked burst in activity, which many also predicted,” Hodges said.
One holdco CEO told AdNews if there was one theme of 2024 it would be historic client account moves.
So it was also a bad year to be an incumbent.
Specifically, the consolidation of Toyota’s creative account into Saatchi and Saatchi, at the expense of Dentsu, was one of the standout movements this year, the consultants agreed.
This consolidation is a reflection of a major client embracing a focussed creative partner alliance, said Enth Degree partner Peter Coffey.
Especially creatively it’s not been a great year for incumbency. Tumbleturn managing partner Jen Davidson said many incumbent agencies declining to be involved.
“A large account moving is always disruptive and often seems to be followed by a flurry of key people moves. I suspect the recruitment firms are preparing for a big 2025,” Davidson told AdNews.
Some significant moves of really large media and creative accounts that have been with incumbents for many many years includes:
- Amazon’s $108M (AUD) media account from Initiative to GroupM.
- Nestle’s $55 (AUD) media moving from UM to Mindshare.
- Specsavers’ $48M (AUD) media from Initiative to EssenceMediacom.
- Hyundai’s $46.5M (AUD) media from Hearts & Science to Innocean.
- Defence Force Recruitment’s $60M (AUD) creative from VML to TBWA.
- ANZ Bank’s creative account moved from Special to Leo Burnett.
- Suncorp’s lead creative account moved from Ogilvy to Publicis Groupe.
- Westpac’s creative account has moved from DDB.
Enth Degree and Tumbleturn’s pitch work also skewed slightly toward media this year, but this is just the way the cards fell.
“Our observation is that the number of creative and media pitches in market were comparable to previous years,” Coffey said.
“We have though seen more clients pursue creative menu or project-based models with their creative partners.”
Slightly more media pitches may reflect the shifting sands of media investment to agencies with strong performance credentials that can seamlessly integrate with offline media, Davidson said.
“From a media point of view the performance of Group M needs to be acknowledged in what has been a breakout new business year for Group M CEO Aimee Buchanan who welcomed a flurry of high profile and sizeable clients,” Davidson said.
Some other large media wins, according to COMvergence, includes:
- Volkswagen AG for $106.5 (AUD) retained by Omnicom’s PHD in a global pitch.
- Australian Federal Government worth $208.9M (AUD) retained by UM.
- Spotlight Retail Group worth $84M (AUD) won by independent Nunn Media.
- Queensland government worth $73.8M (AUD) won by EssenceMediacom.
- Online Educational Services worth $33.2M (AUD) won by independent Half Dome.
The rise of marketers looking for roster-wide solutions was another emerging trend.
For example, Australia's third biggest advertiser McDonald's announced they are looking to appoint an additional creative agency through a competitive pitch.
While the main agency-of-record account will continue to be held by DDB Sydney which was appointed 55 years ago, recruiting for an additional creative agency partner from its existing global agency roster is interesting.
“Even when we get appointed as agency of record we only get briefed on contract/project work”, an independent agency CEO told AdNews.
Marketers are not merely swapping one agency for another and expecting change, Hodges said.
“We’ve spent a lot more time this year sitting with marketing teams and looking at everything they do, across every agency, and then meeting the market with a broader brief in mind,” Hodges said.
“Project work is always a proportion of the pitches in any given year. If there’s a trend, it’s running against bad practice by marketers with project briefs, who get outed in the trade press when they ask long lists of agencies to pitch extensively for small rewards.”
2025 outlook: What agencies can expect next year
With a relatively heated year, consultants expect to see a similar pace for next year with some major reviews planned for early in the new year.
The new business review process will continue to be hotly contested as organic growth opportunities slow, Davidson said.
“Increasingly, we are seeing an appetite for agency consolidation and a return to ‘integrated’ thinking and operating models,” Davidson said.
But political and economic uncertainty might continue next year, which may influence marketers to opt out of new agency agreements.
Coffey suspects that the pitch market will be disrupted as a result of the recent US election and the pending Australian federal election.
“While for many companies this won’t be a distraction, potential changes in fiscal policy, international trade arrangements, environmental policies etc., may just well see marketers’ priorities shift. After all, advertising is just one cog in the marketer’s role,” Coffey said.
“There may also be less of a focus from agencies and marketers on championing social and environmental issues in light of the American public’s overwhelming response to Donald Trump.”
Coffey also predicts transparency to be a continuing trend, specifically from a media perspective, as marketers continue to question fee structures and agency relationships.
“When we hear from leading members of the media industry that ‘client propensity to reward transparency has definitely waned’, we suspect clients will increase focus on the lack of transparency in media trading. This is particularly true of agencies who are acting as both seller and buyer,” Coffey said.
“While the opacity of programmatic has been well documented, we are now seeing ‘principal based media deals’, where media inventory is effectively bought by a holding company for an undisclosed amount, and then resold to clients at an increased cost.
"It is difficult for the client to measure the ‘saving’ against standard agreed media costs. Claims are generally in the vicinity of 10%, however, the mark up for the agency is unknown. We suspect it is a significant earner for the agency. Why else would you build a business stream around it?
“At what point does the agency switch from being a buyer to a seller? If you don’t know that, then trust is in question.”
One buzzing category predicted to boom next year is automotive, particularly with lots of Chinese electric vehicles coming into the Australian market next year.
“In our experience, the newest automotive market players are less focused on brand building and much more on getting to critical mass as rapidly as possible,” Hodges said.
“So agency skill sets, where they are required, are much more acquisition and shorter-term focused. This end of the automotive market feels more like tier-two telco - plenty of work to be done, but you need to be nimble and performance-driven.”
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