As part of this week's Agencies4Growth Festival, we've asked some of the brightest minds in marketing why agencies matter today. Here, Mel Edwards, global chief executive of Wunderman Thompson, shares four areas of growth opportunities for the agency-client relationship.
When the new year began, global economic indicators were already pointing toward a recession. Then Covid-19 happened. An extraordinary wave of disruption swept around the world at breathtaking speed and the pursuit of growth transformed into a push for survival. No sector was left untouched by 2020 – travel, energy, automotive, healthcare, retail, and, yes, even agencies.
The ebb and flow of this global pandemic make it too soon to say when the economy will recover – downturns typically last two years – and every brand will continue to be tested. Companies adjusting to the revenue challenges before them tend to go lean, especially when it comes to marketing. Some even go dark completely.
During times like these, when advertising budgets are extremely susceptible to economic pressure, it is more important than ever to keep up marketing activities. Going dark makes brands vulnerable, and people may trade your brand for something else.
In an economic crisis, people are extremely sensitive to price and brand loyalty wanes. Jane Ostler, global head of the media insights division at Kantar, in a 2020 WARC article, said that the most important metric to track is total brand communications awareness because it has a positive effect on all other metrics. This sentiment is echoed in our recently published report on “Winning in a Recession” – brands that cut all marketing spend in year-one of a recession can take up to five years to catch up with those that maintained spend. Worse still, the Ehrenberg Bass Institute has shown that, as consumers are strongly habitual, share lost, or potential share gains foregone, will be harder to recapture as the economy expands again.
My conversations with client partners around the world bring to light the dilemma brands are facing, illuminating the need to look beyond the next few months for long-term sustainability. It has become abundantly clear where the gaps were, how to best partner and support, and find value in this epoch-making reset we are all facing.
Here are four areas of growth opportunities for the agency-client relationship:
Brands and organizations face a dilemma. They need to tighten belts in the short-term, yet maintain a share of voice in the long-term. But as budgets are cut, it is often the marketing departments that are the first to go. Thus maintaining the brand over time becomes challenging – and critical, as economic pressures can affect customer choice. These tough times require creative thinkers who can move the brands forward and keep them in the consideration set. Brands must lean on their agency partners to fill these marketing gaps with agile, diverse teams who can scale as needed and to support brand communications when it’s most essential.
It’s where the people are
As people’s lives have been severely curtailed this year due to the global pandemic, they rely more and more on online services. The power of data is not simply reaching people, but in understanding them – and how to be valuable and relevant in their lives. After all, the customer of today won’t settle for average. This is where agency partners with a full suite of capabilities from technology and data consulting through to brand and customer experience can help brands meet their customers where they are, online, on the street, and beyond.
Many think of the traditional brand/agency relationship as binary, but in today’s marketing landscape that is no longer the case. Companies are demanding a range of competencies from their partners – from integrated content and distribution strategies, and greater operational agility to transparency and data science and analytics expertise. It’s no secret that CMOs struggle with leveraging the full capabilities of their marketing stacks. Only 58% of marketing leaders report using the full potential of their marketing stack, according to a 2019 Gartner Marketing Technology Survey, which means 42% are not reaching the business outcomes they could. As my teams have evolved to encompass technology, creativity, and consulting, our ability to support clients with the immense complexity of the experience stack and help them deliver in a data-driven market has really come into its own.
It's a balance
There is a tension between global reach and local insight that brands grapple with today, more than ever. A one-size-fits-all or lowest-common-denominator approach runs the risk of becoming too uniform and may miss the mark altogether. Every organization needs to find a balance. Things are moving faster than ever in this virtual environment, as noted in WARC’s August 2020 Speed, Trust and Inspiration report, and speed is fast becoming an agency differentiator. Global agency partners are primed to satisfy these ever-growing needs by exploring new ways of working—especially during the time of Covid-19, where the fluid nature of the virus has regions open and on lockdown at different times.
The world has gone through a period of extraordinary change. As brand and organizations shift gears in response, agencies are primed to help them maintain a share of voice with talent, access to the myriad of audience segments, demystifying the plethora of stacks, and finding the effective balance between a centralised approach and local relevance. In all, brands are now looking to their agency partners for the keys to the proverbial kingdom. It’s a heavy burden to bear, but when our clients succeed, we succeed.
For more insights, inspiration and celebration of the advertising industry, tune into this week’s Agencies4Growth festival.
Powered by WPeMatico