Agencies have spent much of 2020 scrambling to adapt to unprecedented and ever-changing obstacles, but for many, it won’t have been enough. Since the start of the pandemic, nearly 60% of brands have cut their agency budgets and almost 40% could be on the hunt for a new agency over the next six to 12 months.
These figures come from an exclusive survey of 70 brand marketers conducted by Adweek Intelligence. The goal: Understand what brands thought of their agencies’ performance during this crisis and get a sense of what the impact could be on budgets over the coming year. And while it is clear that a number of agencies pivoted and went above and beyond for their clients, there still could be significant repercussions to their client rosters and fiscal health.
Nancy Hill, founder of Media Sherpas and former 4A’s CEO, indicated that the data seemed in line with the normal course of business between brands and agencies. She also noted that pandemic performance by agencies may not be as big a contributing factor.
“If a brand has a roster of agencies, chances are some will underperform,” she said. “And the fact is, clients are looking for answers from everywhere. There is no playbook for the current environment.”
According to Meghan McDonnell, president of consultancy Pile + Company, one main reason for the potential changes didn’t necessarily come in the first two months of the pandemic, but rather in subsequent months.
“Both sides, agencies and brands, were trying to get their footing,” she said. “If there were issues in the relationship, those would become more apparent in May or June because that’s when clients were very much relying on their agencies to be a strategic partner to figure out what was next.”
Some of the verbatim responses in the survey bore out issues that bubbled to the surface, including one marketer remarking that they wished their agency was “more proactive with ideas and less about trying to increase their business with us.” Another noted that their agency was “predictable and largely worthless, entitled” and that “we will be making changes.”
On the upside, however, one long-tenured marketer supported the oft-talked-about enterprising and scrappy side of agencies, making things work for clients no matter the situation or obstacle.
“In my 40 years, I have found that agencies thrive in a crisis,” they said. “They take more risks, are more attentive to client needs and are more appreciative of the work.”
Indeed, despite the seemingly negative data, when asked what adjectives they would use (each marketer could pick up to three) to describe their agencies during the pandemic, the top six terms—flexible, responsive, agile, agreeable, dependable and compassionate—were overwhelmingly positive.
In terms of overall performance, creative output and adaptation, agencies surprised a lot of their brand clients with a third performing better than expected in two metrics and 25% better in one other.
Of course, another mitigating factor was spending on agencies, with almost 60% either cutting or significantly cutting budgets. Yet, according to one marketer, their agency partners were up to the task and kept their heads down.
“While our agencies were disappointed about budget cuts and programs being stopped, they understood and were still very responsive and flexible in support of our brands,” they wrote.
Another stated the obvious: that everyone was working around an untenable situation, one unlike anything in marketing history.