Media pitches in China decline in 2023: Ebiquity

Ebiquity newest research indicates that media pitches in China saw an 11% decline in 2023 year-on-year. However, a substantial recovery is anticipated in 2024 where a 20% to 30% surge in media pitches are projected.

Among agencies, Publicis Media Group and Zenith Media stay on top, securing new business net values of RMB2, 173 (US$300 million) and RMB1,533 (US$212 million), respectively. Omnicom Media Group's Hearts & Science followed closely, achieving a new business net value of RMB1.3 billion (US$183 million).

Carlsberg (Carat took over the business from Initiative), Junlebao (H-Line Ogilvy clinched the contract from iProspect), and Jaguar Land Rover (Hearts & Science from OMG triumphed over iProspect and Mindshare) lead the ranking of the top three new wins, with values reaching RMB740 million (US$102 million), RMB630 million (US$87 million), and RMB600 million (US$83 million) respectively.

When it comes to new business net value (excluding retention), Publicis Media rose to the top with RMB 2,173 million (US$300 million), marking a 10% rise the previous year. GroupM followed with RMB1,127 million (US$155.7 million), securing a substantial growth of 67%. OMG landed in the third spot with RMB681 million (US$94.1 million), marking a significant decrease of 71%.

Stewart Li, Ebiquity China’s managing director, attributed the reduction in pitch billing in 2023 to a shift in media budgets towards sales-driving channels like social KOL and ecommerce. However, given the usual two to three-year contract cycle, Li expects a resurgence in pitch activity in 2024.

In the first quarter of 2024, six media pitches were concluded, with a total billing of RMB3,291 million (US$454.5 million). PHD is a star performer so far. The agency renewed its contract with SAIC Volkswagen, including brands like Volkswagen, Skoda, and Audi, with a total billing of RMB2,933 million (US$405.1 million). Additionally, the agency snatched the China UnionPay business from Wavemaker, with a billing of RMB260 million (US$35.9 million).

Other key findings include:

• 80% of pitches in 2023 were locally led, reflecting a robust domestic focus
• The overall number of pitches decreased from 122 to 108.
• The top 10 pitches saw a decrease of 32% in average billing, plummeting from RMB1,540 million (US$212.7 million) in 2022 to RMB1,040 million (US$143.6 million) in 2023.
• The largest retained pitch was by Wavemaker, which secured Huawei’s buying business worth RMB2,100 million (US$290 million). The agency also renewed its contracts with Perfetti, Prada Group, and China UnionPay, accumulating a total billing of RMB1,100 million (US$151.9 million). 
• In 2023, there was a noticeable drop in both the total value and the number of renewals by incumbent agencies. The total volume of renewals experienced a decline of 32% compared to the previous year, while renewal cases dropped 20%.
• Several agencies witnessed declines in their new business net value. For instance, Initiative faced a deficit of RMB967 million (US$133.6 million), and iProspect marked a fall of RMB771 million (US$106.5 million). PHD also experienced a decrease of RMB633 million (US$87.4 million).