Ad Agencies Struggled with New Business in 2023-So What’s Next?

Ad agencies struggled with new business in 2023, so what’s next if your firm is in this boat, what steps can you take to remedy the situation?

Welcome to the first in our blog series around our latest report: RSW/US 2023 Ad Agency New Business Report. 

You may have seen the Adweek piece featuring it: Small and Midsize Agencies Find Landing New Business Increasingly Difficult 

While it paints a somewhat bleak 2023 so far from a business development standpoint, pursuing “new” new business, we’re already seeing some optimistic signs leading into Q4 and 2024. 

So now is the time to make a plan-our report should light a fire under you and your team-take a step back and look at the reasons why you’re not bringing in new business at the rate you need to, especially what you can control or improve. 

First a few of the key stats from our report:

58% of agencies said it’s been harder or a lot harder to obtain new business this year so far, continuing a now 3 year trend: in 2021, 28% of agencies found it challenging to acquire new business and this number jumped to 43% in 2022, indicating a noticeable upward trend.

And 38% of ad agencies reported a decrease in new business opportunities overall, a significant jump from 26% in 2022.

Ad agencies struggled with new business in 2023-Why?

Let’s look at a few reasons:

1. Economic Uncertainty: Economic factors play a pivotal role in client decision-making. Uncertain economic conditions lead businesses to tighten their budgets, and unfortunately, in 2023 it seems many marketers let the economy spook them more than it should have.
2. Larger Agencies Playing Down: Per our Adweek piece:
   

   It should be a good thing for smaller shops, but McKnight Jr. fears large shops are still monopolizing opportunities. Rather than accept disruption, small agencies believe that more large shops should be unwilling to accept the smaller projects. Simply put, the big agencies are “playing down,” a survey respondent wrote in

3. Increased Competition: The advertising landscape is more competitive than ever, with new agencies entering the market and established players diversifying their services.
4. No process in place for business development: A recurring theme, and not new to this year, yet, it remains as tough as ever for small and mid-sized firms to create and stick to a process.

The Way Forward

The current scenario seems challenging, and is, but business development always has been.

Ad agencies should view these hurdles as opportunities.

Here are some big-picture strategies agencies should consider heading into 2024: 

1. Who’s driving the train: Someone in the agency needs to own the decision on business development.  The core team can and should be involved, but ultimately you must get to a place where decisions can be made and executed upon, however it’s ultimately handled. (And we’ll get into that in future posts.)
2. Nail down positioning and prospect targeting: I am very aware that this is easier said than done, but if you don’t have this locked down, the effort will flounder.  
3. Establish a presence with content: Especially with AI tools to help this process, there’s no excuse not to be minimally posting on LinkedIn 2-3 times a week to show your expertise.
4. Just DO It-Ah the old cliché, but it is 100% true.  You can iterate it to death, but you have to simply start.

The challenges faced by agencies in obtaining new business in 2023 highlight the need for proactive measures, and we’ll delve deeper into those measures in this series in the weeks to come.

Part 2 in this series: Why Is It Harder To Obtain New Business?

Part 3 in this series:4 Mistakes Ad Agencies Should Avoid When Hiring An Internal New Business Director

Part 4 in this series:Business Development-More Reactive Than Proactive

Part 5 in this series: Most Effective Tools At Generating New Business

Part 6 in this series: The New Business Dragon-AI and Business Development