We all know that clients increasingly need to do more with less. Marketing budgets are being cut continually, and expectations of ROI and proof of impact are higher than ever. In parallel, communications agencies are looking for ways to do more; with more focused, intelligent thinking and stronger creative. But this expertise comes at a price.
Agencies are left in a difficult position. With revenues and hourly rates heading south, margins are squeezed and cuts are inevitable. Agencies have always worked a certain way, and it isn’t a structure that can support the same commitment and expertise for a tighter budget. So when faced with the challenge of budget cuts, the solution is usually two-fold – put a less experienced (ie. cheaper) team on the business, and increase the number of hours to protect the final revenue number. This will keep the agency hitting its own targets in the short-term, but it isn’t a great solution for the agency or the client in the long-run, and the cracks will very soon appear. The client will feel there is a lack of commitment and the agency will feel the client doesn’t value their expertise.
This isn’t sustainable, let alone enjoyable. It’s a lose-lose situation that doesn’t produce good work or value for money. Instead, we need to recognise and embrace that times have changed. The challenge to do more with less isn’t going to go away, so rather than continuing to work with the same old model, we need to rethink the whole set-up. Agencies have always had layers of people, rigid structures that aren’t able to bend and flex to suit different needs, and margins factored in to cover big offices and staff downtime. It’s ok to challenge these things – in fact it needs to be done. Rather than trim around the edges, the answer is to think more creatively about how an agency works. And it’s simple – it needs trimmed back and agile structures, with bespoke teams tailored to specific needs rather than static teams sitting on the books waiting for the right work to come along. This meets the need to do more with less without compromising on the good bits. So rather than cutting the experience, expertise and motivation of the team, you cut everything else instead. The bits that will make absolutely no difference to how great an idea is, how effective a campaign can be, or the expertise an agency can bring.
Change is nothing to be afraid of – quite the opposite – it’s progress.