New data from independent consultancy R3 Worldwide showed that, unsurprisingly, 2020 was a tough year for new business efforts on the global front. New business activity tumbled 5.8% last year, with the creative market as a whole dropping 12.6% versus the year-ago period.
“It’s probably the first year ever there’s been such a decline,” said R3 cofounder and principal Greg Paull. “There’s typically growth in new business activity.”
Paull noted that COVID’s depressing effect on the numbers, as on everything else, cannot be overstated. “Obviously COVID has played a part in it,” he continued. “I think people may have expected a bigger decline than that.”
The one area where the large decline in new business wasn’t seen was in pharma. While sectors like hospitality and travel cut marketing budgets significantly, pharma remained among the top spenders. Other sectors that increased budgets during the pandemic included gaming and certain other parts of the tech business.
“Pharma’s one of the few categories we’ve seen through the downturn that’s still quite buoyant and dynamic from a marketing perspective,” Paull said. He noted that this was due in part to vaccine activity and drug launches that had been scheduled prior to the pandemic, but characterized pharma as a “captive market.”
Overall, however, the new business activity shortfall prompted “a very tough time” for agencies in general. “A lot of agencies have declined significantly in head count or revenue,” Paull explained, noting that he remained optimistic for 2021 and beyond. “At the end of the day it’s all about creativity and content, and the search for great ideas is continuing. The industry should be on a rebound in 2021.”
Which isn’t to say that it will arrive without additional pressure. “For creative, I think the challenge now is marketers are constantly under pressure to find faster ideas sooner, and they’re looking for more and more project work than ever before,” Paull added. “Clients are looking for far more dynamic content from agencies in a far more project-based mindset.”