Advertising Agency Statistics

Goals

To understand how much the average business pitch costs a branding/advertising agency, how long the average pitch process lasts, and how long the average client-agency relationship tenure is.

Early Findings

  • Agency-of-record appointments usually last three to five years. "One study found the average length of agency-client relationships to be 3.2 years."
  • The average length of the 40 best client-agency relationships is 22 years.
  • In 2019, digital advertising was estimated to account for roughly 54% of all U.S. ad spend.
  • "Agencies tend to spend 25-40% of their time on a project, but clients usually devote only 5-10% of their time on it."
  • "Nearly 40% of agencies exceed their budgets because of scope creep."
  • "The digital marketing agency world is a highly fragmented marketplace. It is estimated that over 70% of the marketplace is made up of firms that generate less than $1.5M per year."

Pitches

  • "53% of clients evaluate at least 7 agencies for preliminary review."
  • "The average closing rate of agency new business pitches is 43%. "
  • "Best-in-class agencies close 85% of new business pitches and are 6 times more active in pitching than the rest. "
  • "66% of agencies neither have a plan nor follow a methodology for winning new business pitches. "
  • "47% of ad agency professionals are dissatisfied with how their agency handles new business pitches."
  • 32% of global agency professionals said they pitched between 1 and 4 times per year, while 27% pitched between 10 and 25 per year.

Summary

  • For the initial hour, we tried identifying as much of the requested information as possible. We were able to identify some insights on client-agency tenure and more general statistics on agency business pitches. We tried identifying statistics specific for 2019, however, information on this appeared limited, so the research was expanded to include statistics from studies in 2018.
  • Information or statistics on the average spend on a new business pitch and the average length of time the process lasts did not appear available in a public search. However, we tried including related insights which might also be helpful.
  • We also found some insights on agency pitches and client-agency breakups, which might also be of interest.
  • Feel free to add or select an option below.

Proposed next steps:

You need to be the project owner to select a next step.
As an alternate research path, we suggest research that provides 2-3 insights on advertising agency pitches. Where available, we can identify insights on what brands value in an agency pitch or the costs involved in advertising pitches. We will aim to describe and explain the insights, using hard data, analysis, and/or examples, as appropriate.
Another research path we propose is to identify 3-5 examples of client-agency breakups in the advertising/marketing industry. We can identify the companies involved in the client-agency breakups, give a brief description or overview of what happened, and the impact on spend or cost to any of the parties involved (if available).