A New Reality for RFP Cycles

Fewer, smaller deals and 50% shorter lead times create new challenges for publishers. 

When we released our  2022 Media & Ad Sales Trend Report, we suggested that media companies might continue to face challenges amid economic uncertainty and tighter budgets. We’re not oracles, but our comments are proving prescient. Since we work with hundreds of media companies of all sizes, we have a unique vantage point on the industry, and our latest data reveals some concerning trends. Specifically, deal volumes and order sizes are down, while lead times for the average RFP have been cut in half. 

We will discuss these findings in depth in our forthcoming 2023 Media & Ad Sales Trend Report. Submit your email here to receive your copy when it’s released.

Fewer deals 

After an already subdued end to 2022, deal volumes continued to decrease in Q1 at an average rate of 3% year over year, with activity picking up only modestly in Q2. This was true for most publishers, representing fewer at-bats and opportunities to win business and grow revenue. Large publishers (those with $100M+ in annual revenue) fared the worst, with a 5% decline in deal volume. 

The only group of publishers with an increase in deal volume in 1H were small publishers (those with less than $25M in annual revenue), and this was likely due to their smaller base. 

Smaller deals, especially for large publishers

Gone are the days of flashy megadeals, and instead, closed-won deal sizes have been declining year over year. This trend continued in 1H 2023. Almost all publishers saw a decline in deal sizes, though none so dramatically as the major players, which saw budget reductions of 7%-20%. Despite a broad portfolio and scaled audiences, their deal sizes aren’t growing. 

Mid-sized companies ($25M-$50M in annual revenue) saw a 16% decline in deal size in Q1, followed by a 12% decline in Q2. Ad budgets are expected to increase in the back half of 2023, and given the correspondence between revenue growth and deal volume, we hope to see deal sizes expand in Q3 and Q4. 

Shorter lead times

As deals and volume shrink, cycle times have accelerated. Shorter lead times and smaller RFP windows are evidence of last-minute budget approvals and ad buying, bargain shopping, and a general skittishness likely caused by economic anxiety. 

In Q1, lead times shrank by 20% on average from RFP submission to go-live date. In Q2, the numbers got really interesting, with sales cycle times declining by 50% on average compared to Q1, from 30 days to just 15. This change was largely consistent regardless of company size. 

This acceleration raises many questions that publishers should be addressing internally with Sales teams to identify strategies that will serve buyers and sellers alike. Why are buyers waiting until the last minute? How can Sales teams move more quickly to answer last-minute RFPs? Strategizing around these new norms can help teams act fast when the times call for it. 

This momentum can create issues with visibility and headaches for revenue leaders and Ad Ops teams, which are tasked with activating campaigns quickly. (Tools like Proposal-IQ may become necessary to address the shorter response windows.)

Staying agile 

Competitiveness starts with knowing the landscape. The first step to devising a winning strategy is to understand market trends, challenges, and opportunities.

With pressures mounting to quickly respond to RFPs, rapidly close and activate deals, reach peak performance and maximize delivery, the obvious solution for most publishers is to lean into tech solutions that can increase efficiency. Automated workflows, reporting, proposal generation, and performance management can be the difference between just getting the job done and growing in an uncertain market. 

For more detailed perspectives on what’s happening in the media industry—and projections for what’s ahead— download the 2023 Media & Ad Sales Trend Report!