Little did we all know what this year had in store for us, but just five months in and we have a whole new way of life unfolding as we come to terms with ‘social distancing‘ in our daily lives. And if that weren’t enough, we’ve got ‘Murder Hornets‘ that sound like something out of a si-fi horror movie showing up in North America, Plagues of locusts showing up in India and Africa, and a US President threatening to shut down social media channels. (Actually that last one is perhaps the most normal of the lot given how crazy the world has become…)
And if you’re in marketing right now, chances are things aren’t easy, pleasant or predictable for you or your teams either. But just in case you think it’ll get easier any time soon, it probably won’t as this is likely to be our new normal for some considerable time to come.
Depending on which numbers you choose to believe, WARC projects an 8.1% / $50 billion decrease in advertising spend for 2020, although Canada is forecast to fare slightly better than the global average with a decrease of about 1.9%. And while forecasts are for 4.9% growth in 2021, there’s a whole lot of seriously choppy waters for marketers to navigate between now and then.
If we accept that we’re all stuck with this as our new normal, marketers who have spent the last weeks and months making plans around how to move forward or how to pivot their businesses, will likely have to make even tougher choices moving forward. And if you think what’s happened in the last three months has been difficult, I believe what’s to come could be even more challenging.
Unfortunately this isn’t just about advertising spend. It’s about reshaping the fundamentals of businesses, where and how people work and culling marketing resources to – once again – ‘do more with less‘. And agency rosters, resources and fees are likely no exception.
At a time when marketers almost certainly need their agencies more than ever, CMOs and heads of marketing will be asked to do everything from ‘pare back’ to ‘cut completely’. But as bleak as all this may sound, there are some measured steps marketers can take to proactively manage their agency relationships and sensibly marshal resources to move forward:
- Marketers who have previously made decisions to change agencies and seek new agency relationships, need to take the bull by the horns and move forward. Stalling during this monumental shift in our economy would otherwise only serve to make the stall worse. We have already learned valuable lessons in hands-free search that arguably provide stronger chemistry evaluation and stronger connections than those undertaken in face-to-face environments.
- Marketers who are looking for, or have been to mandated to find savings with their agencies need to do so diligently rather than cutting indiscriminately just to achieve a number. Failure to cut thoughtfully will otherwise exacerbate performance, output and / or resourcing problems at a time when agencies are facing as much pressure as their clients. In worst case scenarios, this could even push their agency into insolvency. Cost benchmarking exercises, scope of work management and contract renegotiation can all help mitigate and manage costs thoughtfully.
- If you’re facing agency relationship challenges – or if you’re an agency facing client challenges – a formal agency relationship evaluation will identify pain-points, and a good one will help resolve them. There’s never been a more urgent need to confront issues that are impeding client / agency marketing performance – and get them out of the way – than now. And if they can’t be resolved, how can either tackle the challenges that lie ahead?
- For marketers with multiple agencies, there are opportunities for roster management to drive creative performance improvement. This typically involves defining and evaluating current agency capabilities, scoping marketer requirements, realistic budget allocation, roster design and integrated performance evaluation. Whether you have three or thirty agency partners, all will have to work more creatively and more efficiently to drive value for the clients they serve.
Yes, Covid-19 and worldwide lockdowns have affected everyone personally and professionally, but as bad as it’s been up to now, we’re not returning to ‘business as usual’ any time soon. So if you’ve been making plans and wondering when would be the right time to act on managing your agency relationships – the time is now. Because ‘soon‘ may be too late.
Stephan Argent is Founder and Principal at Listenmore Inc offering confidential advisory to marketers looking for truly independent insight and advice they can’t find anywhere else. Read more like this on our blog Marketing Unscrewed / follow me @StephanArgent
Photo: Hamish Irvine