Short survival guide for independent agencies

Mrs. Ladyboss with a very complicated name from IMF was addressing, very politically, at some point in the last couple of weeks, the big black beast whose name starts with “Re” and ends with “cession”. She mentioned that in her opinion (keyword is “opinion”), the beast won’t visit us just yet, but that in the end it still might – since she only formulated an opinion, however specialized, prone to error. And the majority breathed a sigh of relief, as media began spamming headlines that quoted the big IMF boss declaring that recession is not coming, so life will keep unfolding same as before March 2020.

CATEGORY
CONTRIBUTOR

Ana Stanel
Managing Partner

Part 1- Chronicle of an announced recession

Mrs. Ladyboss with a very complicated name from IMF was addressing, very politically, at some point in the last couple of weeks, the big black beast whose name starts with “Re” and ends with “cession”. She mentioned that in her opinion (keyword is “opinion”), the beast won’t visit us just yet, but that in the end it still might – since she only formulated an opinion, however specialized, prone to error. And the majority breathed a sigh of relief, as media began spamming headlines that quoted the big IMF boss declaring that recession is not coming, so life will keep unfolding same as before March 2020.

I am not an economy expert, I am just a marcomm specialist that 8 years ago associated with another marcomm specialist and together we built a business in the field. I do not live in the city center with the privileged few, but down in the suburbs with the many. I look in my backyard, over the fence at my neighbors, and I see recession comfortably sitting at our tables, eating our food, drinking our water, ruining our furniture and occasionally harassing our family. What’s there left to do? Can we shoo her away or should we just change residence?

In order to reach a conclusion about this, I am writing here what started off as a single material, but turned out to be more than that. Because the present is a lot, it’s excessive, but signs of it had been there before, as there are already signs of what there is to come. 😊

Leaving dark humor aside, Mrs. Ladyboss that we talked about in our introduction would be ecstatic, I’m sure, to learn that Ana Stanel approves of her opinion: the proverbial first pandemic wave that hit us more than two years ago and forced us all- or at least those of us who are smart – to reconsider our positions on the market, followed by x waves of y types, prepared the territory for a tsunami that, predictably, only arches of epic proportions (aka the big economic players and/or economies) can sail on without emotions.

This tsunami is cool because it draws its power from two sources: in the left corner, the production and resource crisis, that was unavoidable considering the repeated blockages of the last few years. In the right corner, the acceleration of digitalization, the adoption of a remote functional model that had enough time to prove its efficiency- matched with the need of security and predictability- put the big suppliers in a privileged position at the expense of the small and many, that were rendered uncompetitive by comparison. Money begets money, as the saying goes.

What does this mean for our industry? On one hand, it translates into unavoidably smaller budgets or volatile projects from clients that after 2 years of struggle ended up selling less and buying pricy. On the other hand, we are witnessing a migration of big clients towards similarly scaled agencies, a choice justified by a “it’s not you, it’s me” discourse that prioritizes strategic reasoning against proven quality of service. Usually, reasons are purely organizational, and the subsequent decisions are not taken by our direct collaborators, but rather formulated in a sterile laboratory that operates rather on theory.

How do you deal with this? How do you fight against something that is contrary to all of your notions of a healthy business, where creating loyalty and developing business with existing clients is the most efficient path towards growth, because it not only brings you numbers, but also reputation and trust to build relevant projects together? How do you re-motivate a project manager who loses a project overnight, or even worse, a key client in which they invested time and energy, and for whom the mantra “it’s just business” is purely theoretical? And, most importantly, how do you position yourself, as a business owner, in relation to these immediate realities?

Here I will allow myself an educated opinion, as a specialist in my field, regarding this reconfiguration of the marcomm market favoring strategic decisions at the top. From the financial-operational perspective, it sounds excellent: we all desire but a few suppliers, solid enough to deliver cross-market, who benefit from internal or inter-company capabilities to fully cater to our needs, but also the financial power to ensure third party cost coverage and convenient terms of payment. In practice, businesses are (still) made by people, be them employees, partners, collaborators or your clients, and your success is undividedly linked to them. The human variable cannot be controlled via Excel, while the “think global act local” approach remains a landmark for marcomm efficiency. What in theory sounds great, in practice will be diluted by the search for alternative solutions by local marketers, who will wish to keep their results up, and their clients happy, thus they will lowkey turn to agencies that understand the market and its subtleties, and have the flexibility to deliver customized work.

But what do we do? Entering hibernation until the future proves (or not) that I am right is not a viable option, so we must adapt.

This adaptation includes some steps: first, look recession in the eye and accept its reality. It is here- maybe not globally, maybe not at the peak of its power, but it definitely is present in our bubble. And now the focus should be on finding a solution to fight back against it, so it does not grow. Because the next step (adult recession that is), is called crisis, be it general or only for a specific economical or market category, or be it individual – as long as your business enters a crisis, your whole world is on fire.

Thus, the first step is accepting reality as is. Second step, understand it: from everything I talked about above, we can take away the fact that the present moment could have been foreseen from a while back, only we were too busy putting out fires, taking (very necessary) precautionary measures based on the models already learned from possibly the previous crisis and wait with our fingers crossed for the hard times to pass, so that we can go back to the comfort that we got used to. I would make a case that what was is not coming back, that change is the new reality and that reality is in perpetual motion; what we must do is find our balance on its surface, reevaluate our milestones and anchors. Practically speaking, to understand that patching up the walls of our home is not enough, to tear it down is not necessary, but to reorganize it, it is. The sooner we understand that, the greater our chances of survival become.

With the right understanding of reality, we can move forward, connecting the dots: define the factors of equilibrium, milestones and anchors and correlate them, first at the strategic level, then functionally. Now is the time to delineate your options- for your business, for yourself – and for your people. Recalibrate your assets and competencies, understand if you are truly great, and at what. If you were great up to this point because fortune favored you, it’s time to stop and go back to square two – the context shifted and it won’t help you anymore, you must get that. Focus on the valuable elements of your business and think about how you can turn them into differentiators to bring new business or secure some verticals on existing clients. But this is a standalone subject, that should be treated accordingly, in the next chapter. See ya.

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