Challenging but Signs of a Turn
2008. 2020. 2025.
This whole tariff thing and the wild state of inertia it has seemed to cause in the market is unlike anything many of us have ever seen.
The 2008 recession was hurtful, but it did not affect every type of business, nor did it have nearly the global impact that tariffs are having today. And consequently, agencies kept their foot on the new business gas.
And the 2020 pandemic was stunning, but PPP helped a lot of business through some tough times and in our world helped us help clients and prospects that wanted to keep things rolling.
While things may seem very out of control, with the stock market rising and falling throughout any given day, and all the uncertainty that is surrounding us, we are seeing some signs of life for the small-to-mid-size agency world.
In-Housing on the Slide?
Ok, maybe not on the slide…but what’s happening today could prove a blessing for agencies.
Pepsi just announced that it’s moving some in-house content work to Vayner Media.
In a release, PepsiCo and VaynerMedia said: “We are excited to form a unique partnership that leverages our combined marketing and advertising strengths on digital platforms for the PepsiCo portfolio of carbonated soft drinks.”
While I certainly don’t wish ill on anyone, I suspect that as margin pressures grow on companies due to tariffs and other market pressures, the value in having an expensive in-house team, loaded with overhead, might prove to be challenging for companies.
Working with marketing agencies can provide greater flexibility and allow for more agility in moving as the market moves.
We’re already seeing marketers recognize the value an agency can bring to their marketing worlds. In our on-going series “The Marketer’s Edge“, marketers consistently tell us that they use outside agencies for things they simply aren’t good at or when they need help to manage overflow work.
Therefore, the door has been, and will continue to be open. I suspect it will only continue as companies look to manage their worlds more cost efficiently.
Slow, But Steady!
The other trend we’re seeing now, right here in our world of outsourced agency new business, is more agency clients winning new business. It was a slow start to the year. Lots of good meetings, but not a whole lot of movement on the part of marketing prospects. Proposals submitted, but a good deal of wait and see.
While you would think that what’s happening in the world today would squash any movement by marketers, just the opposite seems to be happening. More meetings with prospects and more clients winning new business.
I saw this happen in 2008 and 2020. At some point, marketers have to turn things back on. They can’t ride on the “no spend train” forever.
While your marketing clients and the prospects you’re going after may not want to go “all-in” just yet, they need to fully recognize that, like you, they need to stay at least a half-step ahead of their competition.
And you need to help them strategize on how to best communicate to their end-users and reconsider the marketing channels being used, given the state of the economy and uncertainty surrounding us.
In his “Slams Laptop Shut” newsletter last week, Nathan Jun Poekert, a CMO advisor and marketing consultant, advised brands to optimize those performance marketing channels that are currently effective and reduce channels that are not so immediately measurable, such as print and out-of-home, in the near term.
The Smaller Agency Advantage
While smaller agencies may not have all the resources of a big networked agency, they do bring a boatload of advantages that have and will continue to help them excel. Some of those include:
- Lower overhead and more affordable services.
- Top-tier talent and none of this “C-Team” garbage you get from bigger agencies.
- More nimble and agile to move as the market moves.
- More entrepreneurial, which clients in today’s unpredictable marketplace will appreciate.
So as you think about your message to the market, whether it be your existing clients or the prospects you’re working to engage, plug some of this into the conversation. Don’t hang your hat on every element of it, because any small agency can talk these things whether they deliver them or not. But bake it into your positioning, have examples of where you’ve delivered against these advantages, and make sure every element of what you’re putting out in the market (from your website to your proposals and RFP responses) are reinforcing the value that your marketing agency can bring to potential client partners.
Head Down and See You on the Other Side
All we can do is do our best, keep our head down, be flexible in how we market ourselves and what we offer the market, and don’t be afraid to take a few chances.
And by all means, don’t go quiet. Keep your brand out there because like Pepsi’s move to take work out of house, you need to be present when that prospect opens their doors and looks for some outside help.
