Agency Management Institute partnered up with Orbit Media to do a quick poll of agency owners to find out what the initial impact of the coronavirus had been on their agency.
Since everything seems to be changing hourly – it’s important for you to know the time frame that this data relates to. Most of us in the states started working from home between March 10 and March 16th. We launched this poll on March 25th and closed it a couple days later.
Our goal was not to conduct proper research, obviously, but instead just to take a pulse on how things are going out there. I also wanted to compare how the general population of agencies were faring on comparison to the 250 or so AMI agencies that I’ve been communicating with on a daily basis.
Our survey was completed by 122 agency owners or leaders.
There was an almost even split between agencies that were all B2B, all B2C and mixed and the agency offerings were equally mixed as you can see in the chart below.
One thing is certain – every agency’s work level is being affected by the coronavirus, but I think it’s important to point out that almost half (42.93%) are having either a net neutral or positive effect. I think it’s incredibly tempting and easy to only see the doom and gloom in all of the news stories, conversations and most dangerously – what we tell ourselves. Less than 20% of agencies reported a very negative or near disaster impact. So far. That perhaps that is the key phrase at this stage. But, we have to control our lens on this situation or we’ll be paralyzed.
I am not suggesting this hasn’t already been incredibly difficult on some agencies and again, this is a good time to point out the small sample size of our poll. But it is also worth noting that most of the agencies that participated are holding their own and in some cases, seeing an uptick in business.
We see, as you’d expect, the same pattern when it comes to how agency leaders think covid-19 will impact their projected AGI (adjusted gross income) for 2020. 84.7% of agencies reported that they expect a 25% or less loss in AGI for the year. Granted, we are in the very early stages of this.
Again – this is a little bit of a mind game for all of us. It’s challenging not to be frightened by the news we are bombarded with every day. I do believe every agency is going to suffer lost revenue because of the virus and the economic impact of the virus. But as we learned in my podcast conversation with Hong Kong agency owner Kiri Sinclair, there is an end to this crisis and clients and the work do come back.
We need to manage to the numbers so that our agency survives this storm (be it a minor thunderstorm or monsoon for your agency) so we can get back to calm waters and regain whatever we lost during this time period.
Quite a few AMI agencies have actually signed new clients or projects from existing clients since the middle of March. How you sell has to change, of course. You need to shift from any overt sales efforts to a helping model (which I would argue should be your modus operandi anyway) but that does not mean you should stop talking to your prospects right now. They need your help more than ever. You just have to be sensitive about how you approach it.
No big surprise – agencies with more of a B2C bent are bearing the brunt of this slowdown.
We, as consumers, are in the early stages of this pandemic and right now, people are focused on taking care of those most basic needs. They can’t and aren’t thinking about most consumer goods beyond toilet paper and increasing their home internet speed. But that will pass as we settle into this uncomfortable version of temporary normal. One of the things Kiri mentioned in her podcast interview was how quickly the demand for luxury products and travel came back. As she said, there was a lot of pent up demand and people wanted to reward themselves for enduring the shelter in place situation.
It will not surprise anyone that certain agency offerings have been affected in different ways. Without a doubt the hardest hit are media buying/planning shops. On the flip side, PR agencies are the most likely to be winning new clients and projects right now.
There was some good news that came out of our poll. Agencies reported that the situation had very positive or positive impact on their team communication (58.91%) and not one single agency said it had a very negative effect. Likewise, client communication was enjoying a positive twist.
For many agencies, they’ve struggled to get time with the C suite or their day to day client contact. They were simply never available. But now, suddenly there’s an opportunity to have more contact. How you show up for your clients (whether they’ve hit the pause button or not) right now is going to have huge impact on what your relationship looks like after this has passed.
It’s easy to be a good partner when the money is flowing and the work keeps coming. How you show up now is going to say a great deal about your real commitment to their business and your character. This is your opportunity to shine!
This situation is about so much more than the revenue and the clients. For many of our respondents – they had different worries that were equally top of mind.
Here are some verbatims. I’m including these simply to help agency owners recognize that no matter how you are experiencing this – you are not alone. It’s why we put together our agency resources for suviving covid-19 page – so we can all get through this together.
Juggling/managing the work from home environment
The biggest impact has been to our overall focus. We had multiple projects plans and things were moving along nicely, until schools and businesses started to close. Now we, and our clients, are managing kids and work concurrently, and it’s tough to have the same level of focus during the typical 9-5 workday. We’re flexing work hours as a result – nonstandard workdays when it works for us to be able to focus and do great work.
For me, and others I work with, we are climbing a steep home-schooling learning curve while trying to manage clients outside of normal routines. It feels like an unsustainable situation. I have had some clients put on hold but I honestly couldn’t have managed it all while also managing kids full time and providing 3 meals a day from our self-quarantine pantry. On a positive note, many have quickly tackled learning curves around remote work. I have had clients in other cities hesitate about working with me due to distance and I expect that will decrease in the future. For me, brainstorming and creative thinking with my teams has not been as effective virtually. Standing a white board with tons of sticky notes and seeing people’s fully body language, laughing together, sharing food and drink… it hasn’t been replaced.
The impact of isolation
The biggest issue and my biggest concern is the effects of isolation on my team. I’m used to being there for my team day in and day out, keeping them motivated, helping them whenever they ask for it, and encouraging them to stay in shape by providing them gym memberships, etc. I can tell the absence of it all is beginning to take a toll on a few people. Some of them live alone and these activities are what they used to look forward to every day. It’s a big challenge to overcome and it’s more difficult for me to maintain the same level of support now that they’re all split up.
We have provided live streaming and virtual event production in the past but with our new reality of remote working and social distancing we have built out a more robust infrastructure to serve clients in this regard. We have begun new digital advertising campaigns around these services, which was not done previously. The biggest impact is on our attitude to be more aggressive with our own content marketing, customer acquisition, and searching for potential talent.
Not much has changed
We’ve been working remotely for a while so there hasn’t been much change there. It has definitely changed our tone and our content marketing strategy, but that’s okay. We can pivot.
Keeping the team calm and away from panic
We have 48 on staff. we prepared for rainy days and were first able to put all at rest knowing we have over five months of cash for full employment. Once that was in place the team has shined brilliantly. However, there are still many that want to panic at the slightest mention of a negative news story failing to recognize that while there is reliable information out there the news is not one of them. They specialize in getting you to not look away so everything on every channel is super hyped as if an atomic bomb was just dropped. I’ve always had a rule that if the news is creating graphics you know it is partially a hype. That said, it is a lot of work to keep people calm and you have to remember to find times and places of calm for yourself.
Business is better than ever
It’s been a boon. Everyone’s event budgets are now going to digital, so we’re seeing a marked uptick.
Uncertainty and the human reaction
It’s just a weird feeling. Some friends are going out of business and that takes a toll on me mentally. I hate to see people I care about struggle. Overall, business is still ok because people want to do things digitally. I just hope we can see a light soon. In the meantime, we are just trying to help people as much as possible.
The general mood feels very similar to post 9-11. Not having a clear end to how the Corona-19 event ends has put all of our clients on edge. Lack of political leadership at the Federal level is also making everyone uncomfortable as illustrated by the stock market crashing.
Uncertainty is the largest obstacle. The intense focus on day-to-day is affecting our ability to project into the future with any confidence.
It’s really hard to know what three months from now looks like. Coming up with the vision for the agency and planning accordingly is something I’m challenged with at our agency. I need to be able to forecast, plan and scale. I’ve never been more unsure what the next few months are going to be like. I’m also just heartbroken for my client base. Our clients are mostly SMBs and it’s almost impossible to overstate how devastating this lockdown is for their business. Everyone just wants to go back to normal.
Overall, looking at the input we received, agencies are, for the most part, hanging in there. Those that have lost work have made swift adjustments. Those who are waiting for the shoe to drop have a contingency plan in place and those who are as busy as ever, are scrambling to deliver that work in this odd new working environment.
We are at the beginning of what will no doubt be the most talked about season in our business careers for years to come. Like any crisis, covid-19 has a way of uniting us and helping us recognize that we are safer and stronger against the storm if we lash our boats together.