There are many ways to recover from an economic downturn Depending on which media agency is used and the business of its clients, this can impact how much you get. However, agencies have learned many important lessons from their clients over the past few years.
Agencies have had to adapt and become partners in their client’s business because of the global pandemic as well as recent slumps within media and advertising.
Ocean Media CEO Jay Langan stated that his agency was affected by the downturns of “most of industry”, primarily due to the pandemic which has accelerated many digital and retail change and simultaneous corrections.
Brands that excel aren’t waiting for the best don’t wait.
Jay Langan is Ocean Media’s CEO
Langan stated that clients are likely to reduce their spending during difficult times, while still evaluating how it affects their businesses. Ocean Media has been more focused on scenario planning with different budget levels, and closely monitoring the performance.
Langan stated that you need to be ready for rapid growth when there is an economic recovery. This can differ across categories. Langan stated that brands who excel aren’t waiting for the economy to get better. They optimize media mix on the basis of performance and adjust messaging to maximize their chances for a turnaround.
Langan described how Covid saw a severe hit to the travel industry. Priceline, an Ocean Media client, cut its spending. Rakuten and Etsy saw an increase in business due to the low media rates.
Agencies are optimistic about the impact of ad spend on their business in the coming year. Digiday research shows that 12% of agency executives believe that ad spend for clients will increase significantly in 2023, and 47% think it will slightly increase over 2022. A survey found that 32% agreed strongly with Digiday research about feeling optimistic about their companies’ prospects in 2023.
AI can be used to improve efficiency
Others agencies are focusing on efficiency both internally and externally. Boathouse Palo Alto president Peter Prodromou stated that his company has made investments in performance AI over the past several years. Boathouse’s AI narrative capabilities supports client campaign strategies and channels engagement. This dashboard analyzes data from thousands of sources using natural language and machine-learning AI. It can be used to identify sentiments and hashtags, themes, passions and more.
“Engaging in the future, especially with performance AI…” [there is] Prodromou stated to Digiday that efficiency is more important than changing consumer expectations. They’ll need to incorporate more technology in their marketing…and into their businesses to make it better.
Covid has also seen a shift in client expectations, Prodromou said, noting that Covid is able to source talent from around the world, which makes it easier for clients to meet their location needs.
Prodromou stated that the business model was changed to allow us to be able to access talent rather than being constrained physically by our cities. Prodromou said that 25% to 30% of our workforce comes from other cities than the core office. This to me, is a huge growth opportunity… Clients, due to the pandemic aren’t concerned about your being there in the same way they once were.
He said that companies continue to send out RFPs in the same manner as before, but it is less important to physically be present to close deals and pitch. Prodromou said that this flexibility was “a great thing.”
Changes in KPIs or brand fundamentals
Agencies and brands realized that they had to prioritize metrics that were lost in the wake of the pandemic. Amy Lanzi (COO, Publicis Commerce) previously stated that there has been a shift in KPIs from return on advertising spend to new-to brand and lifetime value for customers. Publicis continues to collect data about multi-touch attributes to help test attribution.
[If clients are] We must be ready to share the slumps with those who are going through them.
Evan Levy is president of Fitzco, an indie agency
It’s about understanding “total sales” and how your client would like to discuss it. Lanzi stated that this is not about ROIs. But I’d say there was a noticeable tempo shift from our clients in the past month, especially around the metric new-to-brand.
Fitzco’s president Evan Levy agreed with the assertion that companies are returning to their core competencies, such as brand building and differentiation, after some fell during Covid, when high-performance media was introduced. Levy said that agencies can also use slumps to review what was done when they were less busy. This could be fine-tuning tech, or reviewing postponed projects.
Levy stated to Digiday, “Then you need to create your own magic.” This kind of thing goes back to client partnership doubling. Is there a business problem that you are aware of but have not yet been presented to the agency? How could you do some spec work?
Levy’s focus has been on the smooth management of the business. However, the agency has benefited from the vast client base, 30% which is in the health sector and others not so affected by the economic downturn. The agency helped clients to make smart investments in times of recession a year ago. This has been a great partnership.
Levy stated that “the best agencies have resisted the headwinds we’ve faced and will face in the future,” “So if [clients are] We must be ready to support them through any slump. That requires the agility that is required by this agency.
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