Agency Lessons from Recessions

As I’ve commented before here, there are plenty of opinions, articles and webinars on how marketers should go about weathering the coming economic recession. Many of these come from agencies, trade bodies, media owners, academics and marketing consultants; most peddle the line that the smartest plan is to keep spending at a time when the competition slows or stops, thus raising share-of-voice.

There is a flaw in this argument – if everyone follows the advice then SoV remains as is, whilst the industry enjoys a boom period which we all know isn’t going to happen.

The advice therefore only works on the assumption that most won’t follow it.

One thing that’s missing is any discussion around lessons the organisations dispensing the advice can themselves draw from previous experiences.

I have been around long enough to have worked through recessions going back to the 1970’s. I haven’t seen one anything like the one that’s coming at us. This one is unique for reasons I’ve tried to explain here.

One common factor though is that the agency sector seems to learn little; maybe this time will be different, it’s just that I doubt it.

We are very quick to offer advice to others but, like the cobbler whose children went without shoes we are less good when it comes to our own industry.

For instance, it is often argued that brands need to communicate their relevance even in these difficult times. There are plenty of examples of this around at the moment – some good, some cringe-worthy.

Are agencies communicating the relevance of their services? Are they stepping up to offer businesses general advice and guidance along the lines of, say, an Ebiquity or the management consultancies?

Charles Talbot, a digital sales head by background has started a useful service called Viral Knowledge (not sure about the name, mind you) which aims to pull together lists of relevant webinars. Earlier this week he had listed 60 such events from March 18th to May 19th, under the broad topic of digital marketing.

Three of the 60 were from agencies – two from Ogilvy and one from Dentsu Aegis.

I’m sure Charles wouldn’t claim that his list is definitive, nor are webinars the only means to communicate of course, (and it’s quite probable that agencies are busy running sessions for their clients), but it is a little odd that individual agencies are not more vocal (kudos, by the way to the IPA for all that they’re doing to promote advertising as an industry during this crisis).

This would be a good time to remind the business community of why your particular agency is well-placed to help them. Raise your own share-of-voice in other words whilst your competitors are silent.

In past recessions agency staff numbers dropped considerably, hardly surprising given that reducing headcount is one of the few levers agencies have to reduce costs.

Once the situation improves, the numbers inevitably creep back up again, often as a result of agencies adding new services. This may not be the best approach.

In bad times (and good..) the focus has to be on excellent delivery of those services of greatest client value. This may mean dumping in-house offerings that are done better elsewhere by specialists. It may also mean taking a long hard look at senior people not directly attached to the meeting of client needs.

This can and will be painful but it would make a lot more sense than the knee-jerk reaction which is to lose junior, often very talented people on some misplaced ‘last in, first out’ principle.

There will rarely be a better time to discuss with clients what they might expect from their agencies, both now (given the circumstances) and into the future, and to use this framework to open-up a conversation on business terms.

Agencies can have these current and future expectations conversations themselves although it is often more revealing to use an external, objective organisation. There are plenty who offer this service (including, to be transparent, BJ&A).

Agencies of all shapes and sizes are quick to advise their clients on how best to navigate their way through the present and future crisis.

Hopefully this generation will prove more adept than their predecessors at plotting their own way through.

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