Do not contact it a comeback: How agencies are navigating financial recovery with their clientele
Recovering from financial downturns varies considerably based on the kind of media agency and its clients’ business enterprise. But agencies and their clientele have discovered some essential practices in the final handful of years.
The international pandemic and current slumps in marketing and media sectors have forced agencies to concentrate on efficiencies and step up as partners for their clientele.
Jay Langan, CEO of Ocean Media, mentioned his agency has been impacted by downturns like “most of the sector,” largely the outcome of the pandemic accelerating a lot of digital and retail adjustments and concurrent corrections.
The brands that have a tendency to excel and come out stronger are not sitting back waiting for factors to boost.
Jay Langan, CEO of Ocean Media
Langan mentioned throughout these instances it is regular for clientele to pull back on spending although evaluating the influence to their business enterprise. Ocean Media has focused on much more situation preparing at distinctive price range levels and closely monitoring functionality.
“You want to be prepared to ramp speedily when the economy picks up, and this can differ across distinctive categories,” Langan mentioned. “The brands that have a tendency to excel and come out stronger are not sitting back waiting for factors to boost. They are optimizing media mix primarily based on functionality, adjusting messaging, and leveraging information to capitalize on the inevitable turnaround.”
For instance, throughout Covid the travel category was hit challenging and Ocean Media client Priceline reduce back on spending, Langan explained. Nevertheless, Etsy and Rakuten saw an uptick in their business enterprise by taking benefit of the reduced media prices.
For the upcoming year, agencies appear encouraged about ad spending delivering a lift to their firms. Primarily based on Digiday study, 12% of agency execs mentioned ad spending on behalf of clientele will considerably enhance in 2023 compared to final year, although 47% mentioned the spending will somewhat enhance compared to 2022. The survey also discovered 32% of agencies strongly agreed about getting optimistic about their company’s prospects for 2023.
Leveraging AI to enhance efficiencies
Other agencies have focused on enhancing efficiency internally and externally. Peter Prodromou, president of Boathouse Palo Alto, mentioned his organization has invested in “performance AI” more than the final numerous years. In January, Boathouse launched an AI narrative capability that supports clients’ campaign method and channel engagement. The dashboard makes use of organic language and machine mastering AI to analyze information from tens of thousands of sources, ranging from sentiment and hashtags to themes and passion.
“Going forward, especially with functionality AI… [there is] the need to have to be much more effective than the altering expectations of us as shoppers,” Prodromou told Digiday. “They’re going to have to deploy much more of that technologies into their marketing… and into their business enterprise in order to make it perform much better.”
Client expectations have also changed amid Covid, Prodromou noted, pointing to the capacity to supply international talent as contemporary-day perform life has created place needs much more versatile.
“We changed our business enterprise model in that sense, away from getting physically constrained by the cities that we’re in to getting capable to access talent,” Prodromou mentioned. “Like 25% or 30% of our workforce is from distinctive cities than exactly where our core offices are, and that to me is an massive development opportunity… clientele, for the reason that of the pandemic, are not caring about you getting at their front door in the way that they employed to be.”
For instance, he mentioned organizations nevertheless appear to be sending out RFPs the similar way as just before — but there is not as considerably an emphasis on obtaining to be physically present to pitch and close business enterprise. This flexibility is “a fantastic issue,” Prodromou added.
Altering KPIs and brand fundamentals
More than the final year, agencies and brands have discovered they need to have to reprioritize some metrics that took a backseat as the pandemic impacted firms. Amy Lanzi, COO of Publicis Commerce, previously talked about that the agency is seeing a shift not too long ago from return on ad invest to new-to-brand and lifetime worth of a client as KPIs. As commerce grows, Publicis is continuing to collect information on multi-touch attributes and exploring a new solution with Amazon’s ad tech group to test attribution.
[If clients are] going by means of a slump, we have to be ready to go by means of that slump with them.
Evan Levy, president of indie agency Fitzco
It is about going beyond ROIs to have an understanding of “total sales and nonetheless your client desires to speak about that,” Lanzi mentioned. “But I would say that in the final month, there has been a definite tempo modify from our clientele, especially about the metric of new-to-brand.”
Evan Levy, president of indie agency Fitzco, agreed that firms are going back to fundamentals, like brand developing and differentiation right after some of them slipped throughout Covid as the sector pushed toward higher-functionality media. Levy added that slumps are also an chance for agencies to examine what they place off when factors have been busier, which can be fine-tuning their tech or reviewing projects that have been postponed.
“Then you have to make your personal magic,” Levy told Digiday. “That sort of goes back to doubling down on client partnership. What’s the business enterprise challenge that you know exists but hasn’t been briefed into the agency just before? What is some spec perform that you could do?”
Levy has focused on managing the business enterprise in a fluid way, even though the agency has benefitted from its client base — 30% of which are in well being care, and other sectors not as impacted by the economy. A year ago, the agency also guided clientele on how to invest throughout a recession, which has helped in cementing close partnerships with them.
“The ideal agencies have steeled themselves against the headwinds that we’ve been facing and will continue to face,” Levy mentioned. “So if [clients are] going by means of a slump, we have to be ready to go by means of that slump with them — and that calls for just nimbleness that the agency is constructed for.”