The relationship between brands and agencies is ever changing. Throw in a pandemic, seismic disruptions in marketing strategy, plus urgent digital transformation plans, and that partnership becomes even more complex, adding both stress and opportunities for agencies as they prioritize their own success while still meeting and exceeding client demands.
How has the pandemic affected marketing and advertising agencies?
In 2020, agencies saw declines in revenues and struggled to close new business deals, while many in the US received Paycheck Protection Program (PPP) funding. Still, some agencies saw the tumultuous nature of pandemic as an opportunity to guide clients through a crisis. Furthermore, the pandemic has accelerated digital transformation for major brands, and agencies were and remain ready and waiting to assist in that journey.
Why do brands regularly audit their agency roster?
A big brand putting its agency business out for review is standard practice. It ensures the brand is getting the best work from its partners and keeps the ecosystem competitive. It also allows the brand to design a model that reflects the current state of marketing and advertising and its business priorities.
What is the state of in-housing?
The initial threat of brands in-housing isn’t as strong to agencies as it once was. Still, there are brands that bring commoditized capabilities in-house, and some even build their own shops if it’s a core differentiator or value proposition. Agencies are not threatened and see it as another way to guide and support clients as they build their team, skills, and operating model.
How can agencies best serve their clients in 2021 and beyond?
Agencies should focus on updating and evaluating their offerings to bring fresh and innovative ideas to the table, especially as clients change their needs. They should also understand their role when engaged in multi-agency brand ecosystem and be clear on how to deliver success. Lastly, agencies should be evaluating their operating model for a balance of depth and breadth with agility and scale.
WHAT’S IN THIS REPORT? This report covers the pandemic’s impact on the agency landscape, reviews other challenges agencies face like roster audits and in-housing, and highlights priority areas for future growth.
KEY STAT: Agency executives worldwide are focused on improving multiple areas of their business for success in the future, including new business strategy (60%), productivity and efficiency (54%), profitability (54%), and attracting and retaining the right talent (47%).
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