Remember those ‘client expectations vs. client budget’ memes? As funny as they were, they were also painfully accurate. Any ad agency will tell you that getting a decent budget out of a client, even for a small campaign, is nothing short of squeezing blood from a stone.
Clients are notorious for expecting the world (and then some) and becoming utter scrooges when it is time to fork out the dough. After locking a campaign, clients and agencies generally spend an unhealthy amount of time bickering about which medium to drop or which executional corner to cut, leaving little energy or enthusiasm left for the work itself. And as the post-pandemic phase settles in, it looks like the fists are going to tighten even further. With some of the biggest global brands slashing their marketing budgets in half, agencies are certain to feel the pinch, which is why they need to start thinking far beyond frantic pitching to make ends meet.
Looking at the bigger picture, it is important to remember that times are tough for everyone – not just agencies. Brands (and their consumers) are also going through unprecedented uncertainty, so it is only natural for them to buckle down for the road ahead. That means tightening up and cutting back on expenses, the first of which is unfortunately almost always marketing. Sadly, agencies can do little to protest. With so many smaller, hungrier setups cropping up around every corner, clients have no problem taking their business (and shrinking budgets) elsewhere. It does not even have to be a competing agency anymore; clients looking to reduce costs are happy to turn to freelancers and independent consultants or go directly to production houses that throw in creative services as part of their package. Some clients even go a step further by hijacking small pools of creative and strategic talent, bringing them on their payrolls and getting twice the dedication, transparency and output at half the cost. Does it result in better communication? Not always. But then again, it is not like agencies always produce flawless work either. The difference with these models is that clients gain more visibility on what is produced and more freedom to intervene and shape the creative process while saving time and cost. In today’s scenario, this matters much more than making award-winning communication.
So where does that leave advertising agencies? In short...out in the cold (more like death row, actually). It is only a matter of time before the conventional agency model completely tanks and the sooner agencies accept this, the sooner they will be able to adapt (that too, for as long as it lasts). They need to unlearn what worked in the past and start learning to ‘think small’; by that I mean: smaller mediums, smaller executions and smaller budgets. Firstly, if they have not already done so before, agencies need to start letting go of traditional media and start investing thoroughly in understanding and exploring digital, which means going beyond Instagram, Facebook and YouTube. With consumption of conventional media such as TV in steady decline, clients are much more in favour of value-driven strategies that are focused, measurable and digitally-driven. There was a time when clients would expect agencies to pitch extravagant 360-degree campaigns led by big-budgeted TVCs but it is quite the opposite now. Clients nowadays demand strategies that are optimised and practical, especially if it means letting go of traditional. Even mega-brands like Coca-Cola, Ford and Hyundai all recently opted out of airing 30-second TV spots during this year’s Super Bowl, choosing to spend their budgets more wisely on digital, PR and other avenues.
Once you have figured out where to be, the next step is ensuring your content is relevant and engaging enough to cut through the ever-growing clutter of cyberspace. In today’s fickle ‘swipe left’ digital consumer culture, it is not enough to churn out the same mundane content of yesteryear and boost it all over social media. Consumers nowadays choose the content they want to watch, so do not expect them to sit through anything longer than three seconds if it does not pique their interest. For content to click with consumers, it has to be original, engaging and relevant. On the flip side, for clients, it has to be pocket-friendly to produce. The true measure of an agency’s ability (post-pandemic) will be to create campaigns that not only meet the strategic objective and engage audiences but do so without breaking the bank. That means building cost-effectiveness into the creative framework and ideation process, ensuring that ideas are developed with costs closely in mind. This is not as easy as it sounds but savvier agencies are proving that big ideas do not necessarily need expensive executions. I cannot help but recall Google’s 2020 ‘Loretta’ commercial that was made of nothing more than nostalgic screen grabs, music and a voiceover, yet managed to reduce me (along with millions of people) to tears with its heart-tugging message. Tiny execution. Huge impact. Impossible to forget. Some agencies manage to save costs (and effort) by piggybacking on popular trends such as influencers to pull in audiences. In some cases, influencers are brought on board and given close-to-complete artistic freedom to produce their own content for brands, herding in legions of followers at a fraction of the cost of celebrity endorsements. It is these types of developing opportunities that agencies need to be on the pulse of when planning upcoming campaigns.
Another area where agencies are going to have to work on is transparency and building trust with their clients. Back in the day, clients assumed that they were getting what they paid for, whether in terms of resources or time. As long as work was delivered relatively close to the deadline (and partners would show up for the occasional meeting), clients did not nitpick much about who was working on what or for how long. This is very different now. Brand teams are under extreme pressure to deliver more in less time at lower costs, so they need complete visibility and control on what is being done, sometimes even on an hourly basis. Come to think of it, brand teams pretty much assume the role of creative managers and directors now (minus the much-needed creativity, of course). This is another reason why they are much more inclined to work with smaller teams and eliminate the layers of interaction, knowing exactly how much time and effort is going into their account. For agencies to compete, they will have to consider giving clients increased access to their people while ditching their hefty retainer models for more transparent project or time-based payment models.
The bottom line is that clients today are less financially stable, more risk-averse and more spoiled for choice and agencies are going to have to bend even further backwards if they are to retain their business. It will not be easy. Giants will fall and smaller, smarter opportunists will enjoy the spoils. Clients have no other choice but to seek out more cost-effective partners for their creative and strategic work and agencies will either have to choose to adapt or bury their heads in the sand. In an industry where clients have always been the churri and agencies the tarbooz, the churri just got a whole lot sharper. It’s an unfortunate and unfair situation but then again, when has life in ad agencies ever been fair?
Taimur Tajik is Creative Head, Interwood.