Carat Tops COMvergence’s Media Agency Global New Business Ranking for First Half of 2019

Client retention rates continue to fall overall

illustration of a person sitting at a desk atop a large stack of coins with "Carat" written above it; another person sits at a desk across the way with a smaller stack of coins below it with "COMvergence" written above
Carat topped the list for agencies with a new business value of $2 billion, including retentions.
Getty Images, Carat, COMvergence

Last week, data consultancy COMvergence published its “New Business Barometer for H1 2019” report for media agencies, which found that Carat topped the list for agencies with a new business value of $2 billion, including retentions.

COMvergence attributed Carat’s placement in large part due to P&G’s consolidation of its North America media business, which saw Carat gaining a larger share of the account.

OMD took the runner-up position with incremental new business billings of $709 million, with Mindshare taking the No. 3 spot at $610 million.

COMvergence tracked 1,186 media account moves and retentions across 41 countries, representing $11.4 billion in new business and retentions for the study.

Retention rates fell slightly over the course of the first half of the year, from 26% in 2018 to 25%, marking the third consecutive year in which they’ve declined. Last year they fell from 31% in 2017 to 26%.

For media agency groups, Dentsu Aegis Network took the top spot, with net new business revenue of over $2.26 billion.

GroupM followed at nearly $1.62 billion, including over $1.15 billion in retentions including Allergan, which halted a transition to Publicis Groupe’s SparkFoundry to send the account to Mindshare, and L’Oréal, as well as $1.7 billion in new client wins, offset by over $1.2 billion in losses. IPG Mediabrands and Havas Media Group followed at $416 million and $372 million, respectively. Publicis Media and Omnicom Media Group suffered net losses of $174 million and $740 million, respectively.

Carat also led for new business performance in the U.S., at nearly $1.87 billion from five new business wins and two retentions, less two losses.

Mindshare and OMD reversed the second and third positions, with Mindshare’s total coming in at $303 million and OMD coming in at $283 million. OMD totaled $573 million in new client wins, but was held back by a pair of client losses totaling $290 million. Mindshare had just one win, but it was worth $333 million, while its sole client loss represented just $30 million.

Martin Retail Group and Horizon Media rounded out the top 5 with $238 million and $229 million, respectively.

Unsurprisingly, Dentsu Aegis Network also led U.S. new business growth for agency networks, with a total of $1.862 billion, with losses only slightly eating into Carat’s gains. WPP’s GroupM took the runner-up spot at $372 million, thanks largely to the Allergan retention. IPG Mediabrands followed at $222 million, on the strength of new business wins such as Nintendo, TGI Friday’s and Energizer.

Publicis Media and Omnicom Media Group suffered significant losses for the first half of the year. For Publicis Media, $571 million were partially offset by $304 million in new client wins, for a net negative of $267 million. Omnicom Media Group suffered client losses of over $2 billion, offset by new business wins totaling $58 million and retentions of $360 million.

Of the 85 accounts analyzed by COMvergence in the U.S., 35 either moved their media in-house, to independent agencies, or to agency networks outside the major holding companies. These moves accounted for about $800 million in revenue, or around 15% of what COMvergence analyzed.

The largest independent media agency, Horizon Media, added $320 million in new business over the first half of the year. It began its run by winning media for Petco back in January, later adding eHarmony, Hard Rock Café, iRobot, Kroger and Lyft. Empower picked up media accounts for GNC and PetSmart, while 1-800 Contacts consolidated its media account with R2C Group.

Among the largest clients moving all or portions of their media in-house were ADT, P&G’s Secret and Walmart, which combined accounted for about $150 million.

COMvergence found that media retentions continue to decline in the U.S., with only five of the 85 accounts examined retained (nearly 6%), representing about $743 million, or 14%. Of those five, four related to divisions of the P&G account, with Hearts & Science retaining the skincare and baby care categories and Carat retaining family care and grooming. Last year there were five retentions out of a total of 66 accounts analyzed (about 7.5%), while in 2017 there were 16 retentions out of 94 accounts analyzed, or about 17%.

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