While some industries thrived over the past year, many more were devastated by the pandemic. As a result, global advertising revenues declined by 9% in 2020, according to Zenith.
When work dwindles and new business dissolves, the market becomes more competitive. As a result, agencies struggle to protect their value while keeping their doors open.
To not only survive but also maintain their values, standards of work and reputation in times of hardship and on the other side, agencies have to decide what’s worth compromising — and what’s not.
Worth the compromise
1. Roles and responsibilities: Agencies working with reduced or limited budgets should address their team structures. Can more get done, more efficiently, with fewer people on a project?
At many agencies, there’s a gray area between roles: project managers vs. account managers, designers vs. art directors, strategists vs. creative directors. Agencies can avoid duplicating efforts by better defining these roles.
This doesn’t mean reducing staff. It’s about strategically staffing projects with fewer people, which allow agencies to take on more projects and fosters new skills in existing teams.
2. Process: When budgets are reduced, it can be almost reactionary to set more rigid processes. But that dynamic is transactional and out of line with a true client partnership.
Agencies find out what a client truly needs through early stage strategy or creative development. Agencies can work with clients closely during the scoping phase to align on a process before the project begins.
While clients often prefer a robust discovery process, we know there are shortcuts to get to the same place. What educated assumptions can we make? What’s the scrappiest way to execute? Which stakeholders really need to be involved? Simplifying upfront can save time and budget.
3. Budgets: Values aren’t worth compromising, but budgets can be. Rather than lowering prices, refine scopes. There are often ways to get where needed quicker and less expensively.
Flexible payment terms can strengthen a relationship after a downturn passes. While offering in-kind services isn’t possible for every project, evaluating the cost/benefit can lead to more future business with current partners. Small gestures of help in times of need can further solidify trust in the long haul.
Not Worth Compromising
1. Mission: Mission-driven agencies need to hold true to that north star, especially during tough times. As soon as agencies start making compromises, they sacrifice themselves and potential future business.
The choice is between stability and limited growth to protect your ethos, or sacrificing your mission for immediate growth. What’s the point of a mission if it doesn’t guide you through tough times?
2. Values: Agencies that prioritize their values will likely find their way out of hard times. This may mean turning down work that doesn’t align with those values. If an agency’s only focus is on paying the bills now, it could jeopardize success in the future.
During times of great upheaval, morale and culture are important for agencies to protect. New business should be considered for its long-term viability, rather than as income “for now.” Survival mode needs to be balanced with a vision for the future.
3. Price: Lowering prices lowers worth. Rather than drop the cost, change the approach to getting work done. Long-term, your agency’s value will be spared.
Even during good times, agencies are forced to make short-term decisions for income while hedging a long-term strategy to stay true to who they are. But sometimes, it’s a better long-term strategy to focus on stability over immediate profits so the business health survives well past any temporary challenges.
Shane Wolfsmith is the Managing Director at Grady Britton.