What will the ad agency look like post 'Rona?

12th June 2020

What will the ad agency look like post 'Rona?

Will this cataclysmic event be the spark we needed to begin a shift in how our agencies function? Or will it just be remembered as a blip in time? It’s suit vs creative as our Senior Account Manager and Senior Creative give us their predictions.   

Tim Kho, Senior Account Manager

Who really knows? That said, I’m of the strong opinion that the traditional ad agency model we know will change forever.

In some way, shape or form, Rona has impacted just about every single person in Australia, unfortunately the majority of it has been negative. From job security to cancelling that dream holiday you’ve been saving up for and planning for the last 2 years, the impact has been profound and more far-reaching than anything most of us have or will ever experience in our lifetime.

It has also offered the chance for (see: forced) many of us to re-evaluate how we do things – none more so than businesses.

Ad agencies and the marketing/media industry as a whole are arguably one of the sectors hit hardest. NB. Not intending to downplay the impact on other industries like travel, entertainment and hospitality. Unfortunately, one of the first budgets to get cut or put on hold as a cost-cutting measure in the midst of such an enormous crisis is the marketing and advertising budget.

This is where the traditional, arguably archaic model of a typical agency becomes treacherous territory. Many of the bigger agencies rely on annual retainers from the tier one clients as their income base, topped up by big briefs on a project-by-project basis. So much so that that retainers can often drive an agency’s size and recruitment. With everything we’ve seen and learned about in the past months, are the days of big annual retainers over?

As a suit, the word ‘process’ is part of our daily vernacular. And as much as ‘streamlined’ has been treated as a marketing buzzword, that’s exactly what we as an agency (and I’m certain other agencies as well) have had to do – streamline our processes, cut the fat and make some really tough decisions. Can agencies still do as good a job for their clients with less pairs of hands and fewer layers of hierarchy? For me, agencies nimble enough to keep or even exceed that level of service while still able to grow other opportunities are the ones who will thrive. Agile is a word we’ve used far too many times as a point of difference of how we operate as an agency – now, more than ever (sorry, had to do it!) agile needs to be the norm, not the exception.

How we have adapted in our daily lives will also influence what the agency will look like post Rona. I think we can all agree that working from home was always a ‘once in a couple of weeks at your boss’ discretion’ concept but this period of iso has demonstrated that it can actually work, and in some instances, better than actually being in the office or meeting face- to-face. Of course, there are the obvious drawbacks, like the lack of social interaction and no longer having a reason to go through your sneaker rotation, but I’d argue that it has forced us to work smarter and more collaboratively. It wouldn’t surprise me that in a post-Rona world, some agencies might not have an actual physical office anymore. In fact, a recent Gartner study suggested that over 40% of employees (across a range of industries) are likely to work remotely for at least some time after the pandemic.

The shutdown of retail stores and restaurants until recently, and also the onset of ‘toilet paper gate’, forced a lot of companies to pivot their marketing efforts and focus on digital marketing. Some consumer-packaged goods which have typically been sold through retailers are now available direct to the public, restaurants have been quick to adapt to allow their customers to order takeaway online and deliver. Will that spark a permanent change for more budget allocation towards digital and does that mean that traditional agencies who relied on TV and print dollars as their bread and butter will fall by the wayside?

Last point – influencers, or as Nick likes to call them, influenzas. There’s an assumed correlation that accessibility and affordability to create your own content has given rise to the number of influencers across social media platforms. With the deluge of Rona information (and misinformation) available and looking at how certain countries have handled the pandemic (looking at you, Donald and Jair), it’s unsurprising but equally concerning (depending on how you look at it) that a recent survey by Influence Central showed that 70% of influencers’ audiences are turning to them for guidance during this crisis.

Thankfully social media platforms have been quick to monitor, moderate and filter misinformation, but we should not underestimate the trust that is being built through the COVID isolation period between influencers and their communities. We are literally in their bedrooms, lounge rooms and kitchens. Our favourite influencers suddenly seem more authentic, sharing a common experience with millions of followers who look up to them. Whether paid or non-paid, 87% of influencer respondents are buying more online and talking about it with their communities daily.

The shift in influencer purchase intentions are staggering. 92% intend to switch to more online purchases of groceries and household essentials, 83% for Health and Beauty products and a whopping 54% for Clothing and Footwear. The growth of online shopping was already on the rise pre Rona, but will we see a seismic shift in the retail landscape as we know it post Rona?

What does this all mean for the ad agency? Change. I for one have no idea what the change looks like, when or how it will manifest itself, but I know it’s coming. Like some type of modern-day Darwinian evolution.

In the wise words of Melanie C aka my favourite Spice Girl (I lie, Sporty’s my gal), ‘It’s just the beginning it’s not the end, things will never be the same again’.

 

Jeff Smith, Senior Creative

What will ad agencies be like after COVID-19? Will they change forever? Are we about to enter a brave new world? Is our industry going to reinvent itself, emerging like a butterfly from its chrysalis, fluttering about spreading fresh ideas, attitudes and philosophies?

Nah, I don’t think so. Don’t get me wrong, COVID-19 has been a wonderful opportunity for individuals, businesses, governments, everybody, to take a good long look at ourselves in the mirror and ask, ‘What the hell are you doing?’ The billionaire boss of JP Morgan said that the coronavirus pandemic must serve as a ‘wake-up call’ to build a fairer society. That’s easy for a billionaire to say. In this old lefty’s heart of hearts I wish it was true but I just don’t see any great social change happening. Sure there will be change, but human nature being what it is, once the economy starts rolling around again, we will revert to something very close to pre-COVID. A good comparison might be how the world changed after 9-11. That event changed the way we fly, some attitudes to immigration and an overall hyper awareness of terrorism. It became more real to us in the west. Post-COVID we may become a little more patriotic with an increased desire to be more self-sufficient, relying less on imports. But the reality is the economy will work all that out.

One positive has been the chance to re-evaluate what’s really important and maybe make some changes to the way we live or do business – but Corona is no magic wand. We’ve been forced into doing whatever works. And while it’s great to make the most out of a fucked-up situation, it’s all too easy to exaggerate the extent of change there when we get through to the other side. It’s too easy to put on the rose coloured glasses and see rainbows, lollipops and a utopian world.

I’m not saying things won’t change, but many things were changing anyway. The big agency model was well on the way out years ago. Being nimble and agile were critical pre-COVID too. TV and print advertising have been struggling for ages and will soon either die or, in the case of free-to-air TV, morph into something else. The idea there won’t be any bricks and mortar agencies and that we’ll all be working from home is up there with flying cars – it’s possible, just not gonna happen.

Ad agencies, even more so than your typical office or workplace, are a hotbed of humanity. Sure, we go to work to earn a salary so we can pay the bills, but it’s much more than that. Most humans thrive on human contact. We are social creatures. Those of us who hadn’t already chosen solitary vocations pre-COVID-19, say, like being a lighthouse keeper. No, we won’t all be working from home 100% because, in agency land, we work better together collaborating in person. We humans read body language fluently and get so much of our communication and vibe from it. Ideas are shared almost through osmosis. You just don’t get that wonderful sixth sense synapsing during a Zoom meeting do you? Sure, working remotely has kind of worked short-term. That’s because it’s had to – and if you have the right people in your agency, you can trust them to deliver. At a stretch, I think one change could be towards slightly more flexible working hours, maybe one day a fortnight from home.

My prediction is that agencies will scale back a little, be a little bit more flexible with working hours and working from home, but essentially it will be back to business as usual. But hell, in these dark, challenging, trying, uncertain, unprecedented, historic times, anything could happen and probably will.