Change has always been a constant in the marketing communications world. But as the business world faces up to many unprecedented challenges, what will change look like for marketers and their agencies, asks Mark McCann, managing director of Oliver.
With the world going into recession, budgets continue to contract and value for money remains top of the list for CMO’s and CFO’s. Clients are rethinking where their focus should sit, and it is clearly evident there is a growing emphasis on digital, social, e-commerce and good data. Agencies need to recognise this change if they are going to be best placed to excel in this rapidly changing environment. Agility and the ability to react will be key and could well be the defining difference in those agencies who survive this period of change and those who do not.
The New Normal
Covid-19 and ‘the new normal’ has only accelerated what was already a changing environment where clients were – and are – looking for their agencies to deliver on flexibility and cost. The pressure is on, to move faster and deliver within tighter timelines, and the agency’s ability to adapt will be key.
Across the bigger global agency groups, even before Covid-19, many were reporting little or no growth for lots of reasons; the traditional agency model was showing cracks, competition increased with many management consultancies starting to offer similar services, and of course the growth of in-housing was proving that things could be done faster and with greater agility.
Covid-19 forced a lot of clients to look at how they were doing business. Once the initial shock of the virus and all that it meant was realised, and once operational challenges were overcome around remote working, cost efficiencies became a focus. Clients began to question if there was a better way, and what could be done differently?
PepsiCo is reported to have announced at its Q2 results the development of its in-house agency capabilities during the lockdown, for two reasons: it speeds up working and saves money. Everyone is under pressure to move faster.
“So, we can actually get [the] same or more value for less money, which is obviously a terrific outcome for the company,” Hugh Johnson, Chief Financial Officer of PepsiCo, told investors – a comment that will of course be noted in other boardrooms.
The Key Trends
So, looking at the last six months, what are the trends?
Firstly, the last six months has seen huge disruption in the way people live and work, how clients now operate and crucially how client-agency relationships are evolving.
Clients want everything faster, cheaper, and now, particularly with many working remotely, they have more complex needs. Account management should be about navigating this new reality from wherever we are. As business owners we need to embrace the role of connecting clients and the agency team, and developing new ways to deliver at speed, all within this newly changed environment.
Most importantly, we have had to provide creative solutions to these new and tough challenges our clients are facing and this has been key in strengthening many client-agency relationships.
Secondly, brands, brand managers and – in turn – agencies, will have to be agile and constantly reviewing how government restrictions affect the consumer, consumer confidence and behaviours. The old way of doing things and the traditional ways of talking to the consumer has changed. There has been a shift in behaviour with more focus on value and essential living, health, and a caring environment. There has been a shift in the behaviours of ‘the loyal customer,’ along with the shift to digital and omnichannel media. Those agencies, and in turn, brands who recognise this, will succeed in bringing the customer with them on this journey.
Finally, digital, e-commerce, and SEO has now a heightened importance in the role of communicating with the consumer. Expertise and proficiency in these technologies will be essential for agencies, to meet the demands of the client.
Is there a positive to come from all this? Absolutely.
It is the chance to evolve and adapt to these changes. And we should grab it with both hands.
I honestly believe that each and every day we need to constantly challenge ourselves and our teams, and hold ourselves accountable on every level – from how we find and recruit talented people, to managing our accounts; to how we create teams to mange briefs and surpass expectations for our valued clients.
Mark McCann is managing director of Oliver Ireland.