People talk about coming out “on the other side” of this crisis, but that’s an ambiguous destination that we may not recognize until we’ve already been there for some time. What if the other side is months out, years even? What do we do until then? When we get there, what will your agency look like?
It’s what we do now that will determine if and how we make it to the other side.
There was a brief pause to process the magnitude of the current situation. It passed. We are now moving forward on our altered trajectories towards “the other side.” The abruptly revised 2020 landscape has created new challenges and opportunities for everyone. Nobody is where they thought they would be at the start of the year. So, where does your agency fit in going forward?
Other than your day-to-day tasks (solidifying client relationships, managing cash flow, receivables, etc.), what are you doing to evolve your agency? Have you mapped out a plan? Now is the time to do so.
“Many clients need money-making ideas and they need them fast. This means you need to know your client's business inside and out and you need to know exactly how they make money. Understanding this will mean you will bring them ideas grounded in practicality and financial realities, rather than a bunch of pie-in-the-sky ideas that are impossible to execute.” –Ed Cotton, Strategy Consultant
I suspect you have revisited your clients’ marketing strategies and tactics and made adjustments based on the current environment. My challenge to you is this: take stock of your agency as it is right now. Be honest; was it built for the pre-coronavirus days? We have turned the corner and entered a new landscape, shouldn’t your agency look like it belongs here?
Questions to consider as you lead your agency forward:
- What do all of the new changes mean for your agency’s survival?
- What can you do to help your clients meet their customers’ needs now (and how can you clearly and consistently communicate that)?
- How can you demonstrate your value (emphasis on KPIs showing bottom-line results)?
- Some of what you did in 2019 is likely irrelevant or gone—where can you create new opportunities?
- Will your agency need to make pivots on its positioning, core capabilities, or target industries?
- Do you need to make changes to your agency’s digital presence to reflect the current environment?
- After quarantines and shelter-in-place end, will your team continue to work remotely?
- Is your website going to look the same? Do you need to make adjustments to graphics or copy?
- Will you have a smaller team?
- Is your team prepared to meet your clients’ needs in the new landscape (in terms of skill sets, infrastructure, and processes)?
- Will you offer different services?
- How will you need to adjust the filters on your lead qualification criteria?
- How can you compensate for lost events and awards opportunities?
- What can you do to retain current clients?
If you are like me, you’ve been consumed with fighting fires for clients since this crisis became real for Americans. It’s always been tempting for agencies to neglect their own work while tending to clients, but it comes at a higher cost now. Now is the time to ensure your agency will see the other side of this crisis, whenever that may be.
When will we come out on the other side of this?
We may hope for a V-shaped recovery, but the odds are it will look more like a U-shape, meaning we can expect to drag bottom for a while before things look up. No one knows when we will arrive at “the new normal,” but it doesn’t seem we will return to the way things were. There is no way to sugarcoat the projected economic impact on the advertising industry.
Firstly, there is no true point of comparison; what we are experiencing is unprecedented. Secondly, as Lara O’Reilly observed in Digiday, “The ad industry will almost certainly lag behind any economic recovery. It took four years after the last financial crisis for ad spending to return to 2007 levels, according to McKinsey. And this crisis is set to be far more disruptive.”
Here’s what Avi Dan of Avidan Strategies said about it in Campaign:
“During the 2008 recession, we saw advertising decline by 13%. The slowdown that lasted 3 years. This time, the coming recession will prove to be much more severe, both in terms of the ad spend deterioration, and the duration. In 2008 ad agencies had entered the recession from a position of strength. In contrast, this timing could not have been worse...I do think we’ll see a lot of small agencies closing their doors due to plummeting cash flow, especially if the trend toward 120 days payment by clients continues.”
Granted, none of this sounds very reassuring, but keep in mind that challenging circumstances are nothing new for agencies. No matter what, agencies find ways to create opportunities and generate revenue for their clients and themselves.
What does the future look like?
Here are some observations and educated guesses about what the future holds for agencies:
- Brands will continue to “date” agencies without getting married. That means more ongoing project-based relationships and fragmented ownership of marketing activities across a variety of agencies rather than one lead AOR.
- While some large corporations will continue to work with the “lumbering giants” of the ad industry, most brands will be looking for an easier path to connect with their consumers. They will value easy relationships and prioritize ease of use.
- Nimble agencies will rise (I know...every agency *claims* to be nimble and agile). These qualities will be must-haves moving forward and those who claim it but can’t demonstrate it will be lost in the dust.
- Clients will care even more about agency qualities like transparency, efficiency, and demonstrated value.
- Increased competition from freelancers and agencies. Due to layoffs and furloughs, more freelancers will be available for work. Additionally, freelance networks might appear to be attractive alternatives to agencies. New agencies will be created by laid-off workers. Those with strong client relationships will try to bring them along—and some will be successful, leading to further agency attrition.
- The enduring trend of brands asking agencies to do more for less (and less) will continue with no relief on the horizon.
It may seem like everything has changed, but in certain respects, perhaps not so much. These are all familiar themes that agencies have already had on their radar, and many have already made adjustments for—if you have, congratulations on your head start.
Agencies may be up against their biggest challenge yet. My best advice is to do the work to get your agency ready for the new landscape and stay proactive about creating opportunities. The stage is set for disruption. I expect some of you will create new ways for your agency to make money that upsets the entire playing field. I can’t wait to see the outcome.
Here’s a quote I saw from Stephanie Nadi Olson, Founder and CEO of We Are Rosie, which exemplifies the opportunistic thinking agencies need to have right now:
“When we come out of this global pause, the old normal won't make sense anymore. We have a huge opportunity to embrace the pause and think long-term about what makes sense for the workforce and for business...It's a jump ball right now and any agency –big or small, boutique or full service – can use this pause as a chance to listen and adjust to create a future that serves the highest good of the talent and their clients. The winners will be the leaders and organizations who openly and authentically acknowledge, own, and offer up new structures to fit our brave new world. My hint: lead with the people in mind.” — Stephanie Nadi Olson (in Campaign)
- Don’t Devalue Your Agency, Even In Times of Crisis
- New Business In the Time of Coronavirus
- How to Survive in a Project-Based Agency Landscape