More micro agencies, less but better talent; we missed the complacency warning signs but Covid has improved industry 9x
Crazy low margins, a growing gap between human brains and tech and a lack of innovation typified the industry pre-Covid. This is Flow CEO Jimmy Hyett argues pandemic-fuelled structural change will re-shape the sector for good. He predicts more micro agencies, closer partnerships between brands and agencies, and a leaner – and better – sector after rounds of redundancies.
It’s taboo to say, but redundancies in business are sometimes a blessing. With only 50% of redundancies in media during the pandemic being ‘regrettable’, this means businesses may be better off with better attitudes, energy and productivity.
For years we’ve had a thriving industry. It has been full of ideas that shaped our nation of brands, there was an abundance of talent, beaming with culture and drink trolleys.
We were slowly evolving, but in the real world, we were missing the warning signs:
- Technology was moving more quickly than we were, increasing the gap between brain and machine.
- Margins were eroding, driven down by reduced fees in pitch craziness
- Indies tried to stand out but couldn’t match the volume and scale of multinationals
- Multinationals were too attached to legacy to drive major innovation or make drastic changes
- Publishers were torn between pushing into the new digital world or supporting the traditional formats that gave them success in the first place
- Consumers were getting more savvy, consumption was more fragmented and brands were finding it harder to create impact and make a real connection with their customer.
There was a lot that needed to evolve to stay in touch with the future – but with no catalyst for change, it was business as usual.
Instead of indies trying to emulate large multinationals, we’ll see the reverse – large multis adapting and building structures that act like the indies in an uncertain world. They’ll be trying models that have traditionally never been attempted.
The wake-up call
In March 2020, the world reeled and our industry turned into a frenzy of pauses, pulls, pay cuts and predictions. We didn’t know how long it would last, and while many sectors shut down, the agency world sped up.
Productivity soared and energy was high – a nitro shot injected into the engine room of our agencies. In almost every sector, it hasn't slowed down.
But while our people were working non-stop, brands had the rare – and forced – opportunity to slow down.
With a shift into world-leading technology, fast-paced energy and being at the forefront of business across the country, we will start to see an influx of talent vying for the limited roles available. It’s a very good problem to have.
Indies on the rise
One of the loudest success stories to come from the pandemic has been the invasion of the indies.
Fuelled by the Independent Media Agencies of Australia (IMAA) doing an incredible job highlighting the indie advantage, smaller agencies have had the nimble and lean structure more suited to dealing with Covid curveballs.
Many qualified for JobKeeper, many had multiple smaller clients rather than a few large clients, and few had the staff and overheads of multinationals that struggled with multiple offices, teams and shareholders.The contrast in impact was evident and now, in an uncertain world, indies are making some big moves – and making a few big agencies nervous.
Global agencies will be back, in a big way
For years, there has been incredible scale, tech, talent and depth in holding groups, and this has remained constant and unchallenged. But with the influx of indies and the financial pressures of Covid forcing them to re-evaluate their traditional models, it’s not going to be long before we start to see a major shakeup.
Instead of indies trying to emulate large global networks, we’ll see the reverse – large multinationals adapting and building structures that act like the indies in an uncertain world. They’ll be trying models that have traditionally never been attempted.
And if they nail this, it will be one wild marketplace of agencies – large and small.
Positive impact predictions
We all know we were complacent and comfortable before the pandemic. Now, we’re re-energised and focused on the future of our industry.
We’re more driven and ambitious – to not just survive, but to thrive. And we have the greatest opportunity for success, thanks to Covid rocking our world.
We first said ‘F**K YOU, Covid’, but now we should say ‘Thanks, Covid' for these ten reasons to get excited for the future in our industry:
- The accelerated adoption of technology. This uptake provides more opportunity for brands to connect and engage with the older, ‘traditional’ audience, who are quickly becoming some of the highest internet consumers.
- People are finding their passion and giving it a shot. If Covid forced you out of your role, or you’re just re-evaluating what’s important in life, you’re not alone. More people are exploring opportunities to follow their dreams. We’ll see even more media directors start their own micro agency.
- Losing dead weight. It’s taboo to say, but redundancies in business are sometimes a blessing. With only 50% of redundancies in media during the pandemic being ‘regrettable’, this means businesses may be better off with better attitudes, energy and productivity.
- More business partner, less agency. It’s a tag line we’ve used many times before, but it’s so powerful. The pandemic has shown how much clients rely on agencies to be at the forefront of marketing decisions. This will improve client relationships and lead to more two-way conversation between businesses.
- Competition drives the best output. We can already see the standard of work increase across the board from increased competition, both from our people focused on keeping their jobs and agencies focused on keeping their clients. All work will lift to a new standard in the search for a competitive advantage.
- More brands will be on the move. One outcome from brands having time to re-evaluate their business strategy is that more will question their current set up. Are they getting what they need now, or is there a more aligned option in this new world? We will see more shift in business to different agencies, models and structures in 2021 than the years before this.
- More focus back on our people. There’s been no shortage of coverage on work life balance and the drive for flexible days, locations, etc. What’s clear is that there’s no magic answer that everyone is happy with, so all businesses will need to listen, check in, adapt and check in again to make sure staff remain our greatest asset. Middle management will start making more decisions on structure than senior management because they are closer to the ground.
- Our industry will be desired. There’s been a huge focus from the Media Federation of Australia (MFA) to inspire, retain and attract the best people into our industry over the years, and it’s no secret we lose a significant volume to other avenues. But with a shift into world-leading technology, fast-paced energy and being at the forefront of business across the country, we will start to see an influx of talent vying for the limited roles available. It’s a very good problem to have.
- You will be happier. Alongside businesses needing to focus on people, there’s equally as much importance for us to focus on ourselves. Covid has taught us a lot, and it has allowed us to ensure we are doing the things we want to do. Self-awareness, mental health and personal development will become priority over professional development, and should be supported and provided by our workplace.
- Covid won’t be the only major event we’ll see. As much as we would love to leave it all back in 2020, there will be other disruptive events – big and small. They should all be approached in the same way, where we can refresh, reset and kick start a new chapter when it comes. Good or bad, they will happen so it’s up to you how you deal with it.
Finally, why not a 10x improvement?
We’re still human and feel for the businesses and industries that won’t make it through, so we can’t give Covid full marks for success. But what breaks us makes us stronger, and there’ll be even more opportunities for new businesses to sprout and jobs to be created that we’re yet to see.
The future’s bright – if you find the right way to look at it.
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