Marketing Briefing: Marketers, agencies report it’s ‘the perfect storm’ as new business pitches slow
Marketers are pumping the brakes on new business pitches, according to agency execs and search consultants who said pitches have slowed in recent months, with marketers in a state of pitch paralysis. They said that the ongoing economic uncertainty, midterm elections and the Russia-Ukraine war have marketers unable to read the market and uncertain what to do next.
The second and third quarters of this year were slower than usual for pitches, according to agency execs, who said there’s a sense of pullback across the board from marketers this year. There’s also an overall sense of indecision among marketers now, according to search consultants, who added that marketers typically are ready to run pitches when they seek search consultants, but now will seek consults only to put off pitches or run pitches only to take weeks or months to make a decision.
“Clients are just very uncertain,” said Ann Billock, partner at search consultancy Ark Advisors, adding that clients are taking longer than usual to make decisions on pitches, needing more input from more members of the C-suite. “Pitches are expensive but new business is the pipeline for increased earnings. It’s a tough time for agencies. Hopefully this is a period where they are working on shoring up the clients they do have.”
This pullback on pitches isn’t just anecdotal. Lisa Colantuono, president of search consultancy AAR Partners, said that 15 pitch opportunities came through her desk in the first three months of the year, versus just seven in the second half of the year. Per data from search consultancy R3, there have been 50% fewer pitches in the US this year and 22% fewer pitches globally.
“Every marketer is being challenged with unique issues in 2022 from inflation to supply chain to a decline in e-commerce growth post Covid,” noted Greg Paull, co-founder and principal of R3. “As a result, there’s been far less new business activities as budgets remain under stress. We would anticipate an uptick in 2023, but this year looks to be one of the lightest on record for reviews.”
Agency execs said there’s some panic and unease among agencies, given the lack of new business pitches. Some expect that there will be hiring freezes or, for those based in the U.K., fixed contracts for those who are hired as hiring is more permanent in the U.K.
Colantuono also noted that the clients who are running pitches have held off on signing agreements, and that there’s a sense they are doing so to see if they can get more for less out of agencies by holding off a bit longer.
“It’s more than the perfect storm right now,” she said.
3 Questions with Gabriel Krajicek, CEO of startup financial institution Kasasa
What’s Kasasa’s current marketing strategy?
[It’s] a lot of trying to bridge grassroots things into social media and PR so that we can take very small budgets, lots of decentralized budgets and lots of little bitty community buys all across the country, and aggregate them into something that feels bigger than each individual one would alone. We can’t afford to go run a big national TV campaign and expect to get the ROI on that.
Do increasingly expensive CPMs and a crowded digital advertising space impact your strategy at all?
With a limited marketing budget, the earned media side is always super attractive, super exciting for us. It’s a more attractive way to try to stretch a small marketing budget than trying to duke it out against Credit Karma, SoFi and Chime on who’s got the best algorithm for buying words to show up.
As talk of an economic downturn continues, does that impact Kasasa’s marketing strategy?
It doesn’t change what we’re going to spend. It changes what products we would focus on. This is both at a consumer level and [financial institution] level. In a recession, each individual [financial institution] is going to have different ways that impacts them. Normally, for a bank or credit union in a recession, what ends up happening is…they don’t they aren’t able to [get] enough loans, and they get too [many] deposits. They have a balance sheet that’s heavy on deposits, but they don’t have any loan flow and then unbalanced and it makes it makes it hard for them to make money. What we can do is we have products that drive big balances and we have products that drive lower balances that are more transactional. — Kimeko McCoy
By the numbers
As the possibility of economic uncertainty looms, advertisers are holding their dollars a little closer and scrutinizing ad spend a little harder. In fact, more than half of e-commerce advertisers across the globe are excluding less profitable products from their pay-per-click campaigns, according to new research from DataFeed Watch, a data company. See below for more insights:
- 64.74% of e-commerce marketers implement a product exclusion strategy as a way of controlling how the campaign budget is being spent.
- In nearly 91% of cases, advertisers opt for removing products below a specified price threshold.
- 26.49% of all products advertised across paid channels globally are on sale. — Kimeko McCoy
Quote of the week
“A lot of brands seem to be shifting to a more full funnel [approach] a.k.a. ‘We care about branding right now.’ With a deeper recession coming in 2023…the brands that do well and survive are those that build the brand and keep advertising. Brands who focus on branding in a recession coming out ahead of a recession when it is over.”
— Duane Brown, founder of performance marketing shop Take Some Risk, on the shift some previously performance marketing-focused brands have made recently.
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