The US agency sector will lay off about 52,000 jobs over the next two years as media spend declines 23%, Forrester predicts. Agencies are projected to cut 35,167 jobs in 2020 and 16,578 in 2021.
The global picture is even starker, with the big six agency holding companies poised to eliminate an additional 49,695 global positions by 2021.
“It’s a dismal forecast,” said Jay Pattisall, analyst at Forrester and author of the report. “Layoffs are inevitable and already underway.”
To date, all of the major holding companies have announced layoffs, furloughs and voluntary pay cuts. This activity will only continue as large swaths of the economy remain shut down and categories such as travel and retail are dark.
“This set of circumstances is unprecedented,” Pattisall said. “The contraction of spending is across the board, and agencies as a service provider take the biggest hit.”
Advertising agencies, which have struggled to adopt technology and are experiencing a long-term financial decline, will be the hardest hit by layoffs.
Advertising agencies already account for more than 50% of layoffs across the sector, and they are currently laying off 15% of staff on average, compared to 7% at digital and media agencies. Digital and media agencies offer more relevant services to clients looking to embrace digital transformation and communications.
“Economically, [advertising agencies] have been the most challenged in the United States,” Pattisall said. “Advertising has become a more programmatic and data-driven offering, and [advertising] agencies have been slower on the uptake of that technology.”
As agencies shed jobs, some will inevitably close, especially those that skew toward pressured categories or traditional services. Smaller agencies are more likely to close than larger ones with more resources or cash in the bank, but public companies are held to greater scrutiny for cost-cutting and creating shareholder value.
“The impact should be pretty even across the two,” Pattisall said. “But it’s likely that you see publicly owned companies taking action earlier because of the economic pressures.”
As agencies are forced to reduce headcount, there’s “tremendous opportunity” to reshape their talent pool, Pattisall said. Agencies that embrace automation and hire talent with multidisciplinary expertise, as opposed to channel-specific knowledge, are better positioned.
“Ultimately, it will be less specialization and more of a multiskilled workforce that includes new systems and tools,” he said.
Agencies must also accept technology and automation as a fundamental part of their workflow. While digital and media agencies have been adopting automation, machine learning and AI for years, advertising agencies need to catch up.
Creative agencies, traditionally resistant to technology, have an opportunity to use automation to surface insights that inspire ideas, help teams collaborate and scale production. And media agencies can lean even further into AI and machine learning to inform audience segmentation, channel selection, budget allocation and measurement.
“I see all agency capabilities being assisted by automaton to one degree or another, from finance to HR, all the way through to strategy, creative and production,” Pattisall said.
Cuts to the agency workforce could inspire CMOs to bring more work in house, either to cut costs in the short term or as a result of agency talent drain. There will be more opportunities for brands to hire in-house talent or freelancers who have been laid off from agencies.
But eventually, companies will have to decide whether a long-term investment in an in-house team is worthwhile. And if it’s not, marketers have to play a role in reshaping agency structures and compensation models so they can survive in a new reality.
“CMOs that cut these corners may find themselves continuing to suffer from the impact of the shortening tenure inside the C-suite,” Pattisall said.
How in the world can you expect to stand out; how will anyone find you? If you’re an ad agency or any of its derivatives, you’ve been told for years there are 29,999 more agencies in the US competing with you, wanting to be found. So what’s the secret for breaking through the clutter to connect with ideal clients?
Follow this… Not too many years ago in the mid-nineties, most agencies were content to prospect within a limited-mile radius of their office. Biz Dev consisted of direct mail, modest early-stage email and telephone outreach. And most competitors were also within that radius, but certainly nothing like 30,000! From the client’s perspective, other than Yellow Pages and Redbook, there was a crying need for a place or service they could use to search and find perfect-fit agency candidates. In 1997, to answer that need we introduced AgencyFinder.com, one place clients could visit to find and explore a database of extensive agency data contributed by our many good-friend agencies themselves. Substantial Internet traffic found us and for quite some time the “world was our oyster.”
We delivered no-cost algorithm agency search coupled with HI (human intelligence) consultant-assisted guidance. That was good for the industry because agency websites were themselves at an infant stage. Maybe you don’t remember, but agency websites were often wanting! Then after quite a spell, AgencyFinder copycat directories began to surface. Disappointingly directories embraced the “Google Model” – the more an agency paid the more prominent their display. Not really fair to agency or client. Close but “no cigar” in what they delivered, but they chipped away at our traffic anyway. And agencies were beginning to learn. SEO and SEM; keywords, social media – all to vector searching clients directly to their websites. And that’s where things are today. Slowly but without mercy, those 30,000 agencies each introduced websites all decked out in their best SEO, shouting “I’m here!” But what is here? Is it equivalent to searching a database of 4,500 prominent agencies committed to new business who drew upon more than 500 data fields, 7 essays, case histories and website access to factually and visibly define their firms, or is it the relatively shallow agency website data Google will use to find candidates? For local search Goggle is powerful, but most clients are well beyond locations as their primary stipulant.
So what to do… well, what goes around comes around. Direct mail is again shouting “look at me!” Agencies advise clients to target; so agencies should target as well. Email these days is destined to the giant junk mail folder in the Cloud. Clever DM can be a pleasant and compelling surprise. That coupled with professional telephone outreach to ask – “what did you think of what I sent?” can begin a meaningful business relationship. But don’t forget to check out or overlook AgencyFinder.com and those few like us that still offer the precision and free service that’s always been our forte’. If you’re an agency needing targeted client introductions Enroll Now. If you’re a client needing “perfect-fit” agencies, Search Now!
In last week’s notes, I talked about all of the ways agencies are using this strange moment in time as the impetus to create something new or give something old a fresh twist. The ingenuity that you are demonstrating is just one of the reasons why I think your agency is about to bloom in some very cool new ways.
I think we are entering the age of the small to mid-sized agency. Here’s why I think you are poised for explosive growth and new opportunity:
Clients need scrappy marketing tactics and strategies that can be tested, tweaked, and re-deployed without months of navel-gazing.
Clients want an agency that isn’t stuck in a single strategy set or offers every client the same solution.
Clients want to be and feel important to their agency — they don’t want to be the small fish in the big pond.
Clients want access to senior-level people who have expertise in their industry, with their audience, or solving their particular problem.
Clients are demanding transparency and efficiency with their budgets (so fewer layers and admin costs).
Clients want an agency partner that runs a lean, mean shop so they are not paying for excess overhead or frills.
Clients need an agency that is willing to get their hands dirty and really learn about the client’s business and customers.
Clients are hungry for an agency that is willing to learn something new, take a risk, and fight a little harder to help the client’s cash register ring.
And that, my friends, is you. Just like people want to shop local, clients want relationships that feel a little deeper, a little more valued, and want to partner with someone that they believe truly has their back.
So often I see you trying to disguise your size by not proudly owning it. Now it is time for you to shout that you are the perfect size to play a major role in your client’s success.
Keep demonstrating your innovative spirit. Celebrate the relationships you have with clients. Promote that you are ready to re-define the rules and get out there and win some new business!
This is your time!
Words of Wisdom from our friend Drew McLellan @ AMI
Stay with me, this might explain and offer a fix. Here at AgencyFinder.com we use our own mail server for Flash Reports and group email intended for our registered agency contacts. We don’t use services like MailChimp or ConstantContact because we don’t want their Opt Out feature to remove a critical agency contact. Even in our emails, an incorrect Opt Out request can end up taking the agency off-line. Read our Opt Out instructions below for details.
For years our incoming mail came in through Earthlink. They proved to have an aggressive filter that seldom grabbed anything we needed to see. Your agency should want to see all non-malicious email that arrives so you can pick and choose. After all, we’re both wanting to engage anyone looking to hire an agency. In our case, we’re also on the lookout for agencies wanting to enroll for new business.
Six months ago, we experienced a change. Email from my ISP Webmaster wasn’t getting through to me. When he asked why I hadn’t been answering, I went looking. Not in my computer’s Outlook Junk folder, but I did find his messages in the early upstream Earthlink web-mail folder. To make a very long story short, EarthLink had hired a new aggressive third-party service to screen and filter their incoming mail. And I was told in no uncertain terms that they couldn’t and wouldn’t do anything on our behalf. My Webmaster tells me all the carriers have tightened up considerably in response to bogus COVID-related traffic. And all that takes place well prior to whatever filters you have set locally, including your White Lists. So for incoming mail we switched to Gmail with good results.
But there’s more. In our recent group emails, we’re seeing evidence of increased blocking by Outlook. Bounced email example: “Outlook blocked access to the following potentially unsafe attachment.” All I did was use a semi-colon in the subject line. If you knew all this already, great. If not, hope it helped!
Note Example: To remove only yourself from AgencyFinder, Opt Out here. To remove your agency from any future invitations, you must be a C-Level Officer. Type REMOVE in the subject line and reply.
How about it; do you find the pre-COVID commercials showing life as it was a sometimes irritating, annoying reminder we can’t live that way today? Spots showing large gatherings at backyard barbeques; youngsters sitting close on the beach for a beer and bonfire, we’re not there yet. Some brands do show masks and distancing, even voicing the need to take it slow. But most have not.
Understandably no brand wants to bear the messaging burden alone, so how about… would it make sense for the 4A’s, ANA, and the many other agency associations to come together to create PSA’s to address the situation? With positive, upbeat messaging guiding people to a clear path. There’s been nothing like that yet. Corporate and agency cash reserves and personal savings only go so far. Everyone has a stake in that game and it needs to be played. You can play your part beginning here.
The word on the agency street is that most want and need new clients now, not tomorrow. But how realistic is that? That expressed urgency has everything to do with orders to sequester-in-place issued for the COVID-19 fiasco and then the ensuing riots in protest of the killing of George Floyd. Just as some states were beginning to allow phased openings, the country-wide riots frightened many people who in-turn chose not to travel for work to city-center properties or to begin shopping in ernest. The result – a continuing drag on the prospect of renewed commerce and positive agency cash-flow.
After months of deep cash-flow reductions, many agencies, even those who managed to snare some of the government’s stimulus monies, were down to spending for absolute necessities, and that didn’t initially include spending for future business development. So what’s an agency to do? Some rather lucky shops may have been cultivating opportunities during the past months and now feel comfortable working to close that business. For them that’s great. But the majority found themselves stuck in limbo; choosing not to reach out to prospects and at that same time, prospects were also “hunkered down” and constrained their research and outreach faced with an uncertain future.
OK, time to get moving! Consider these options and sequence for deployment. Options are sorted by timing and costs. Not considered are items and inventory already owned by agency. Nor is talent or training of agency individuals.
This BUSINESS DEVELOPMENT information is for AgencyFinder Certified Agencies, Agency New Business Executives and agency subscribers. We communicate to opt-in registered member agencies using e-mail. The contents of this Flash Report is the opinion of the writer and is not meant to be an infallible source of fact.
CONTENTS – Your Business Development Tools for 2020 Success – Lots to Digest
Catch an Unsuspecting Worm
If Your Website Has a Team Tab You Should Be There
Agency New Business Secrets Every Rainmaker Should Know
How to Generate Valuable Leads in Today’s Media Explosion
Cold Calling Works! But Ice Cold Calling Doesn’t!
Three Remarkable Alternatives to Spec Creative
Who is Going to Answer That Phone?
What Can We Do For You?
Upgrade Your Plan
CATCH AN UNSUSPECTING WORM
You’ve certainly heard it said – the Early Bird gets one. Everyone (clients and agencies) spend much of January planning what they will do starting February and that planning creeps into February. There’s still time – beat the crowd and pounce on unsuspecting advertisers with your focused and assertive outreach. Use e-mail, social, video, USPS and even telephone. In your phone outreach, don’t be dainty. When connected to the proper authority, suggest politely but boldly – “I thought you might be interested in a second opinion! Would it make sense for us to meet?”
IF YOUR WEBSITE HAS A TEAM TAB YOU SHOULD BE THERE
Most agency websites, in recognition of the fact that chemistry is a critical element in agency selection, see the wisdom in an agency “Team” tab. There you’ll find the smiling faces (photo or illustration) of the key players – at least that’s how they are presented. For a first-time visitor, they may care about your management, but if they want to reach out to hire an agency, they want the new business contact. If that’s you and you aren’t posted yet, show this to your boss and ask it be done. It needs your photo and a pleasing bio!
AGENCY NEW BUSINESS SECRETS EVERY RAINMAKER SHOULD KNOW
Every agency new business consultant has them; virtually anyone who’s taken a crack at agency new business development will claim to have some. There aren’t many real secrets, but there are some simple tips worth noting and worth doing.
In the “outreach” category, you need a computer, telephone with headset, and contact management software (ACT, Salesforce, etc.) That platform will give you a place to create prospect and client databases, plus it allows you to “auto-dial” anyone in the database and record your discussion notes “on-the-fly.” It’s absolutely THE most efficient way to manage business relationships. Anything less is cheating yourself and your agency.
In the prospect “first meeting location” category, if you were never in the audience for our presentation, you need to experience “The Agency Tour as a New Business Tool.” That presentation by our sister-company Sales Marketing Institute, Ltd. was being made to select agency gatherings back when AgencyFinder was born and still is. Telephone me and I’ll walk you through it.
In all your dealings with a prospect – know your agency, know your people, know what your agency has done and for whom, know what your agency can do and how, be punctual, be honest, be forthright, be sincerely enthusiastic, be inspirational. Don’t be “all that”, don’t be a bore, don’t hog the floor, don’t steal thunder from others.
Ask until you understand; then ask again. Restate what the prospect said, and look for confirmation. Don’t offer solutions until you’ve heard the problem. Don’t speculate (in their business category), but do speculate using fictitious examples to demonstrate how you think and how your agency does things. Be careful what you say about anyone to anyone. Assume that any two people of the opposite sex, today even same sex that work together, are much closer than it appears. Deal or no deal! Marketing, advertising and public relations are passionate processes. Find and pick passionate marketing partners; then have fun!
HOW TO GENERATE VALUABLE LEADS IN TODAY’S MEDIA EXPLOSION
When new business is your agency assignment, you’re faced with an awesome array of media and method choices to connect with prospects. You can choose between push and pull. Push using targeted email complete with drip marketing, or Pull with your agency website as content king. There’s merit to both but I suggest it’s time to look back at what was working pre-media explosion.
Back in the day, when promoting agency business development training, we practiced what we preached – we armed ourselves with computers, a database of agency prospects, contact management software (ACT), send-me-something mailers, a headset and a whoopee cushion.
First we mailed manageable groups of teasing dimensional mailers. Then we started dialing for dollars. Nothing scripted, but I can assure you, the first few sentences were ingrained after a few calls; anything to start a pleasant, meaningful conversation. Then a simple question – what do you think of what I sent? We were looking for agencies that needed new clients, were prepared to work to earn new clients, and were willing (even back then) to invest $ in themselves.
Some calls were painful and some agency receptionists were their own worst enemies. Then again, some were absolute delights. Funny, but we could never predict who was coming next, but I can say that if we stopped because we were told no, or someone hung up on us, that was it for the day! So we learned to press on. Our earlier research had revealed about 35% of the client or advertiser universe was willing to talk to a new agency about a possible relationship. We assumed those figures applied to agencies as well, so we knew to press on. We also operated on the ten percent premise; that one out of ten in the database would find our offers interesting. So here’s the world’s best, most famous new business “cure” (updated for today’s many media alternatives) and probably no secret to you; you just needed to be reminded. Create and mail something (clever/topical dimensional mail via USPS), then pick up the phone and call prospects. Many will say no but somewhere between one and three may say yes. Remember, if you’ve had nine “No’s”, your next one is a Yes! Press On! Take control in this sea of options.
COLD CALLING WORKS! BUT ICE COLD CALLING DOESN’T
There’s been a significant sea-change to acknowledge and accept what now works in pro-active new business development. As we mentioned in “Secrets”, it wasn’t long ago that hundreds if not thousands of “Rainmakers” (how many recall that expression?) were busy sending clever dimensional direct mail packages. The content of those mailers posed a relevant question on a related topic with mention that the sender would call the week following. Those adept callers were gifted in the art of extemporaneous conversation and able to carry on to a follow-up conversation and ultimately to the powerful closing line – “Would it make sense for us to get together and meet?” This as we taught it to agencies from Seattle to New York to London, that’s a COLD CALL and it works!
Cold Calls work, day in and day out. Problem is, most agency folks either haven’t been trained properly or don’t have the personality to pull it off. Solution? Train people with the right personality. In contrast, without using the mailers, pull up your prospect list and dial the phone. Called party answers and you struggle to get traction. What do you say? THAT’S an ICE-COLD CALL – and few if any can pull that off. And be advised, those who suggest Cold Calling doesn’t work possibly want to make calls for you (big bucks at that), or they have some fancy e-mail program to sell. If you need help and some suggestions on that topic, let me know.
THREE REMARKABLE ALTERNATIVES TO SPEC CREATIVE
Here at AgencyFinder, we advise advertisers not to request or encourage “spec creative” in their final presentations. Yet one ad agency’s “spec creative” is another ad agency’s “demonstration.” But in general, spec creative to most means a sample ad or ad campaign that purports to represent an agency’s best thoughts for delivering “positive needle-movement” for the client conducting an advertising agency search and review. In the next breath, there seems to be agreement that a client deserves to see, in one way, shape or form, that an agency “gets it!” by demonstrating they will be able to deliver those positive results if hired and compensated to do so. Here are some alternatives we suggest:
The Backward Glance – have the client reflect back (1-2 years) to a specific situation that occurred with their brand (marketing challenge) where they have evidence of actual results. In their Presentation Brief they would outline that situation in its entirety, then assign contending agencies the task of presenting specific solutions, including “spec creative” if they wish. Then compare and contrast those proposals to what actually did happen.
The Dissimilar Business – have the client create a brief for a fictitious business situation (but familiar to the client) clearly removed and distinct from the client’s actual business. Let the contenders propose to this make-believe situation (with spec if they desire) but doing it this way, the client can witness the problem-solving skills of each agency without triggering agency concern that this creative might be “stolen” without compensation!
The Complete Surprise – client gives contending agency folks (no advance notice other than the fact they can bring as many and whoever they wish) a “surprise” on-site assignment. 2 hours (with client present and witnessing) to prepare; then 30 minutes to present. No tools other than flip charts and markers.
In numbers 1 & 2 above, and with advance notice, each agency is asked to prepare a “Presentation Invoice” with details to show time, rates and totals for the presentation as if the agency were already on-board. That gets presented following the formal presentation. This topic is considerably more involved than this short discussion allows, but if you’d like to chat or help us expand on this, give me a call or drop me an email.
WHO IS GOING TO ANSWER THAT PHONE
I know of agencies paying $4,000 to $5,000 monthly to have third-parties working elsewhere make outreach calls trying to find someone, almost anyone who will agree to a meeting with the agency brass. On a score from 1 to 10, I rate those meetings at a 2. But who knows, once in a while it’s possible to strike Gold, so if the numbers work, why not? Now let’s take a look at that practice. Contractors make the outreach call. That can be an expensive call. Let’s assume the Contract caller connects and has a good chat and asks for a call-back. Contractor has a process. Having implied he/she works for and at the agency, the number that was left goes to voicemail only, answered only in the contractor’s name and voice. That’s another story.
Now let’s say the prospect is in a hurry, so rather than waiting for a return call, they find and call the main number on the agency website. Now it begins – the looping “Who is going to answer that phone!” Agencies nowadays have voicemail to cover the desk, so we get the – “Thanks for calling AgencyOne. If you know the extension of the party you’re calling, enter it now. For an agency directory, press 1. For this and that, press this or that. For New Business Press 4.” You’re routed to the Marketing Department. “No one can take your call. Please leave a message.” But if someone does answer and they ask for the Contractor, it’s likely they could hear “sorry, sHe doesn’t work here!”
WHAT CAN WE DO FOR YOU?
Regardless of your registration level, you’re welcome to ask for our help and advice. If you have questions on agency business development, email us; we’ll respond or give you a call. Make sense? Email to with subject line – Need NB assistance.
UPGRADE YOUR PLAN
If your firm isn’t already at one of the paid levels, I can’t imagine anyone from your agency enrolling here, building your profile and then NOT wanting invitations from clients looking to hire. Our free Iridium plan is essentially a business card listing, so if you want to engage a client prospect with your due-diligence call and interview, you need a paid registration. Smaller agencies generally select our Manager Plan; larger firms seem to prefer the EVP plan. For complete details start reading HERE; then finish HERE. Questions? Just ask!
Thanks for taking time to look this over; as we have since 1997, we look forward to getting you face-to-face with a great prospect. Then & Now – We built it for you!