Medium-sized agencies struggling with new business opportunities
Medium-sized creative agencies are at a competitive disadvantage in securing new business opportunities.
That's the headline finding from research carried out by agency consultancy JFDI in its annual New Business Barometer. The study found agencies with 51-150 employees found it difficult to locate new business opportunities when competing against both smaller and larger organisations. The respondents were sampled across 16 core sectors including tech, design and branding.
Mark Clark, managing director at JFDI, said: “There is a deficiency of reliable data within the new business field and agencies often have to rely on word of mouth or assumption when making these major business decisions.”
“The nature of competition is changing as the lines between sectors become increasingly blurred. We see the rise of management consultants and the mighty tech companies exercising considerable influence over the routes to market.”
Bigger brands swamping the competition
Larger agencies were found to have an advantage due to a larger workforce concentrated on identifying lucrative opportunities. Larger firms also had a higher pitch conversion rate of 47% compared to 40% for medium-sized agencies and 38% for small firms.
The ability to specialise similarly gave smaller agencies a competitive edge and its size showed itself to be a positive asset in consuming opportunities and adapting quickly. Small agencies worked harder to gain opportunities but are currently swiping business wins that should be in easy reach of medium agencies.
The research discovered medium-sized agencies were caught between two stools and felt they had to choose between acting as either a small or large business.
Medium-sized agencies are often in a period of growth with demands on management and resources, meaning potential opportunities are missed. This is despite 68% of medium businesses in the survey reporting they have a new business director employed within the company to target new opportunities.