One in 5 accounts – including General Motors, Carlsberg, Coty, EDF, Unilever and Home Depot – were retained over the last 12 months, compared to an historical average of 1 in 7. Is this a blip, or the start of a trend?

Of course, there were more pitches worldwide than ever in 2009 – about 30% more than normal – and there was certainly an element of “pencil-sharpening” going on by some brand owners, who were actually quite happy with their agencies, but were under pressure to reduce costs. But it wasn’t necessary for them to go to market to achieve this result.

Now in 2010, it seems inevitable that the number of pitches will start to come down. For one thing, there are more global media agency contracts than ever, and it is clear that these are less likely to be unpicked than local or regional arrangements.

Contracts are becoming less portable these days, as the role of the media agency has evolved from being a buyer of spots and spaces to being more fully integrated and “plugged in” to the digital sales funnel. There are genuine issues around the ownership of data, which need to be carefully considered by clients before considering a switch.

I believe we are turning a corner, where agency performance is no longer judged on its ability to cut costs, but to build genuine value and sales. The best performers will be the clients with the strongest and most productive agency relationships. 2010 might give everyone in the industry a chance to catch their breath. Perhaps both clients and agencies will use the opportunity to draw up more progressive contracts.

Andy Pearch April 2010.

This piece appeared as an ‘Industry View’ in M&M’s re-launch edition, April 2010 (page 7).

To view the article click here.

Posted Tuesday 27th April 2010