It would be an understatement to say that we are living in challenging times.
It is like saying that watching the US presidential election debate earlier this week was a bit painful. I don’t think any of us really need reminding that the impact of the most famous obligate intracellular parasites of 2020 has been felt across the planet and, I am afraid to say, that we are not out of the woods yet.
If you know me well, you will know my views on the world’s reaction to the virus but I do not want to turn this blog post into a political rant. As we enter Q4, I wanted to share some thoughts/reflections on the impact that the coronavirus has had on our wonderful industry and consider how it may continue to affect us all in 2021 and beyond.
A Hammer Blow
Many digital marketing agencies have sailed through these troubled waters unscathed and some have even experienced meteoric growth, but I think it is fair to say that the majority of marketing agencies had a worrying March / April period and I know of several that continue to struggle.
Transparency is core to the way that we do business and I am happy to share a snapshot of our net profit margins across the past year:
It doesn’t take a rocket scientist to see that we didn’t have a great March. It was, in fact, the first month in over 15yrs that we suffered a loss. Not the end of the world but hugely frustrating as I had hoped that this was the year that the ‘Brexit uncertainty’ brakes would finally be eased.
An unfortunate truth is that marketing budget is typically the first to be slashed when the going gets tough. I say ‘unfortunate’ as it is often the worst decision to make and there are numerous examples throughout history of how marketing your way out of tough times is a successful strategy. This is obviously not always the case and we were in the unusual position of advising some of our clients to hit the pause button due to the unfolding events. It felt as though the world was falling apart and that we were all doomed.
Every Cloud Has A Silver Lining
I spoke earlier of how we were adapting in the early days of lockdown and I was already starting to see some positives amongst the gloom. Whilst I have developed a strong dislike of most aspects of 2020, there are definitely some positives that should not be overshadowed by
government incompetence / economic meltdown / project fear / challenging times (sorry – I am trying so hard not to rant….).
We had always built the agency to be cloud-based, so the move to the remote model was actually very easy in terms of logistics. I have no doubt that being forced to work remotely must have been a total nightmare for some businesses but we were very ready for it and there really wasn’t any interruption to our ability to deliver work for our clients. The clue is in our name – as long as we have a browser, we can do what we do best. It was, however, definitely liberating to pass that test.
I will be the first to admit that I was very worried about the impact of being physically distant on our internal communication but it sometimes feels as though we have actually improved on that front. I miss our office banter, but a combination of regular team video calls and a move to an online project management tool has actually meant that we have been OK on that front. We have proved that we can operate very effectively without being tied to the office and that is most definitely a good thing.
An aside of the remote model is the expansion of our recruitment territory. We have always had very high standards when it comes to recruitment and have often struggled to find the right brains within striking distance of the office. Whilst I still have some concerns about growing the team (see below), I feel much more confident about our ability to work with a dispersed team and welcoming Kerry to the team in August has been fantastic and the highlight of my 2020 so far for Browser Media. I am excited by the, now proven, potential to focus on the right person rather than just trying to find people in the right geographical area.
Away from the operational rays of light for the agency, I have been struck by the amazing results that we have been achieving in 2020. I try to read all our monthly reports and I have been comforted by a tsunami of green arrows. It is no secret that digital is booming and digital marketing is arguably more important than ever, so I don’t feel as though we are out of a job. People are bored at home, with more time on their hands, and heading online in droves, so there is a lot to do. I absolutely believe that now is the time to double down on digital marketing as the rewards are there for the taking. The chart above shows that the March knockback was a temporary blip and, whilst we are still feeling the impact of reduced budgets and hesitation to commit to some projects, I feel confident about the future and we are obviously in a far better position than many businesses that have had the rug pulled from under their feet through absolutely no fault of their own.
It is a little too early to tell, but I personally believe that a variable cost model will be attractive to many businesses in the coming months/years. The real economic hit of the drastic measures is only starting to be felt and I fear that the hangover will be here for a long time. I expect that this will hit headcount/recruitment within many organisations and the advantages of outsourcing become more obvious, thereby helping agencies to thrive. I could, of course, be very wrong on this front but I know that we grew very quickly in the aftermath of the financial crisis as businesses wanted to make progress but were hampered by recruitment freezes.
But…..There Is Still A Cloud
As I mentioned at the start of this post, we are certainly not out of the Covid woods and there remains a huge degree of uncertainty that still poses a threat to many businesses. It would be arrogant to assume that agencies were safe from this threat. Whilst I hope I have highlighted some of the silver linings, we should not assume that all is well and there are many questions that remain unanswered.
For me, the biggest for an agency such as Browser Media is how we maintain/develop our company culture. Whilst our communication has improved in many ways, there is no substitute for the Friday pub sessions or regular chit chat in the office. Remote working is great, and we are in the process of developing a ‘work from anywhere’ policy, but I just don’t know how sustainable it is without the threat of losing our team culture. It is very important for me that our team enjoys working at the agency and feels pride in what we do. That is much harder to realise over a video call and I fear that there will be no real points of differentiation if you constantly work from home.
I also worry about the opportunities for junior / less experienced individuals to join a digital marketing agency. I just do not believe that you can learn the trade when working remotely as you will miss out on the meetings that you will be pulled into when in the office and you lose the ability to learn through osmosis and listening to conversations between the more experienced in the team. This is a real head-scratcher for me and I am struggling to see how we can recruit at a junior level for the foreseeable future. I feel a sense of guilt on this front as I believe that agencies such as ours have a really important role in introducing new talent to the industry.
We have a lovely office, but it is currently empty. I have been a regular in the office but it feels sad and the lack of energy is very telling. It is also very expensive and the business head is screaming at me to move out. But this feels like resignation and an acceptance that we will always be a remote team, with the associated challenges that I have just outlined. I am struggling to determine whether the place of work will be important in the future. Historically, many agencies have spent fortunes on amazing offices to wow clients and a fantastic working environment can definitely help with recruitment but is this a thing of the past? Has Covid changed working lives forever?
What do you think?
It would be great to see what you think about any of the points raised above. If you are client-side, do you envisage leaning on 3rd party help more in the future or do you think that in-housing will be more popular in the future? If you are at an agency, what has been your experience and how optimistic are you for the future?.