How the agency world will change post-virus
As the COVID-19 pandemic takes its toll, Mediatel assembled seven agency bosses to discuss its ongoing effects on the advertising and media markets - looking at both the immediate and long term.
The round-table was conducted (virtually, of course) last week and was moderated by Mediatel Group CEO Greg Grimmer, himself an agency leader during 9/11, the 2008 financial crash and other global crises.
Rachel Forde: The usual ‘spend through a recession’ advice doesn’t stack up so well for brands that have had to close all their hotels, airline routes or shops. However, for those brands that remain relevant to consumers we are encouraging them to continue to invest or indeed start to invest into TV as it now becomes affordable to them.
Tim Irwin: Perhaps the most important lesson is that no matter what the challenge, how we respond is what matters, as our response is what will define the framework for the future. I hope that, as an industry, as a country, and as individuals, we use this moment to make ourselves stronger for the future - more resilient, better connected, and more in tune with what the data is telling us about what lies ahead.
Danny Donovan: This is a whole different level. We won’t see the full impact until the US has fully contracted.
Greg Grimmer, hosting a pre-lockdown Mediatel event
Lindsay Pattison: Consumer behaviour will inexorably change; the new normal will be e-everything: entertainment, commerce, education, workouts and more visual-virtual social life, and a renewed spirit of resourcefulness, whether that be as prosaic as be cooking and cleaning, or delightful as creating content.
Jem Lloyd-Williams: Yes, I agree. We can see from the field research we’re doing that people’s attitudes are rapidly shifting now. How they develop and influence our behaviour in the long-term is difficult to say this soon into the lockdown. I’d like to hope we’re all a little more self-aware as we emerge from this, and therefore behave with more community.
There will be a few people and brands who make a fortune in the recovery but for the vast majority it will be very hard"
Nadine Young: I think it might, but I’m not sure whether it will be for better or for worse. People who grew up during the Second World War famously found it hard to break ‘hoarder’ habits having lived with rationing for years. A prolonged lock down may change our behaviour in the same way - will I ever again be able to see toilet paper on the shelves without being tempted to grab a pack?
But I hope that it will also change our behaviour in ways that make us less selfish, more aware of helping those around us, more aware of cutting down on wasted food.
Danny Donovan: Yeah, I think we’re going to hit a major period of austerity. As with all such situations there will be a few people and brands who make a fortune in the recovery but for the vast majority it will be very hard.
But people will be determined to get out, have social interactions, and enjoyment. To this end we will see a return to lower cost activities. Simpler times perhaps, but enabled by tech.
Richard Morris: I do think there will be some changes and it’s going to be very difficult to predict which ones will stick, but how we shop, work, travel and interact with other people will change. Changes we would have seen over 10 years maybe condensed into one. I’d hope that social media will be a kinder place, we’d cherish more our freedoms, enjoy being outside, being with other people and having shared experiences – with all the implications for media consumption.
Rachel Forde: In the long-term probably not huge differences, although I would see a trend towards more working from home and less commuting, and a greater appreciation for local shops and the High Street.
Jem Lloyd-Williams: Too many to mention and impossible to pick a favourite. Every gesture or commitment, big and small, must be applauded. Businesses’ generosity in hard times makes even more difference.
Rachel Forde: I love the Just Eat discount for NHS staff – it has already saved them over a quarter of a million pounds in just a week. A tangible difference to key workers.
Nadine Young: I won’t single out one media owner here because I think every single person, community or brand who is stepping up to contribute in whatever way they can, should be celebrated. If there is a silver lining in this horrible situation it has been to shine a light on the best of people, the best of society, and the fact that all of us together can truly be a force for good in the world when we put our minds to it.
Danny Donovan: Anyone who has given space or changed their messaging to support the main government messages.
Tim Irwin: The brands that will grow out of this period will be the ones that genuinely focus on being helpful and adding value to people’s lives in a time of massive uncertainty. Times like these are enormous opportunities to define expectations and live your values in ways that people will remember.
Pattison, at a pre-lockdown Mediatel event
Danny Donovan: Generally speaking, the value end of the market will flourish, along with certain parts of the luxury sector. The squeezed middle will be more squeezed than ever.
The hospitality sector, or what’s left of it, will probably have six months of boom.
A little bit further away, maybe even not until 2022 depending on restrictions, but travel will also boom. There will be a massive birth spike so that market will do well.
Plus, divorce lawyers!
Rachel Forde: Like Lindsay was saying earlier, anything e-commerce. Amazon and other online e-commerce retailers will make gains that it is difficult to see will be taken back.
Rachel Forde: Tons- plus all of the IPA stuff. We had to be careful at first though, as this is so much more complex - even down to creative messaging around groups of people outside or having fun together - just jars, even if their brand is still functioning or should be spending.
Richard Morris: The single biggest determinant of advertising effectiveness is availability. Through this lens, I doubt any channel is going to win in the short-term when it comes to ad revenue. But media is of course more than advertising dollars. Social media will demonstrate its social worth in connecting a disconnected population. TV will remind us of its power to unite the nation, and quality journalism will prove to be more vital than ever.
Danny Donovan: Obviously social and AV through all delivery mechanisms are benefiting now. Let’s just hope Netflix can keep refreshing their content!
Cinema, although clearly closed for now, will see a huge boost coming out of this.
Rachel Forde: Social media, the Disney+ launch is suddenly looking inspired and I would guess Netflix churn rate is low at the moment.
Nadine Young: It’s absolutely normal that everyone has been focusing on the immediate terms for the past couple of weeks – whether focusing on supply chain issues, marketing spend shifts or how we can all step up and support. But it is no less essential that we remember this will pass, and when it does, we need to make sure we and our clients are all in the best position possible to regain any lost ground and indeed capitalise on any new opportunities. For example, for some food brands who are seeing sales increases, this might mean making a plan now as to how we help them keep those new consumers over the longer term.
Richard Morris: During these challenging times, there will undoubtedly be some change in the way we work with clients, due to their own developing business needs. And we are adapting to that, in the same way that we will adapt to the new normality when it resumes. Because I believe it will be that – a ‘new’ normality. This crisis will have fundamentally changed our behaviour; as businesses, as people, and as a human race.
This crisis will have fundamentally changed our behaviour; as businesses, as people, and as a human race"
Close collaboration will be key to coming out of this stronger.
We are speaking to clients daily, sharing regular updates with them about the industry and forecasts, advising them on how to continue on a positive trajectory amidst the crisis. Same goes for our people. We are working very hard to keep our strong, open and supportive culture alive, communicating clearly and regularly with our people, continuing to help them grow.
Danny Donovan: The post-normality isn’t going to look like the pre-normality, especially once you add Brexit in.
To be honest we’re focusing on helping our clients and protecting our people right now. Lots of commentators have naturally jumped immediately to the post-Corona world, when the practitioners are just getting on with dealing with the current 4-week-old situation. It’s best to stay in the present at the moment, I think.
Rachel Forde: We have advised clients on how best to pause for now - i.e. defer media spends, not pull them - in order to avoid penalties and to be ready for the recovery phase. The back half of the year is going to be very highly demanded - especially TV - and is therefore going to be costly, so we need to plan creatively.
Lindsay Pattison: I think for sure we will change.
A long hard look at all business travel and expenses given the successful use of video conferencing apps. Ongoing, more super agile and virtual forms of production, and faster turnarounds of all work, full stop.
The sector will undoubtedly become leaner and frankly more ‘grown-up’.
Richard Morris I have no doubt that we will change. A human tragedy like this is one that will impact all of us as individuals; making us take a closer look at the way we behave, the things we take for granted and what we think is truly important. Many of us will be focusing on some of the positives at the moment. Increased time with family and children, less unnecessary travel, less damage to our planet. These will not be short-lived thoughts, but ones that will stay with us. We will be much less extravagant in our actions, more focused on the things that really matter and more respectful of the world around us.
Jem Lloyd-Williams: For sure. Just look at the way we are now working – and still being productive and creative – via technology. We can assume no one is going to be embarrassed ever again, when a small child strolls into view during an important virtual meeting. Relationships forged now will forgive so much more in the future, surely.
Danny Donovan: There is going to be a reset, marketers will be looking at their rosters and agencies will be looking at their size and structure, and their costs generally. The industry will contract, and agencies who can offer integrated solutions will perform strongly. Unfortunately, there will be a long period of desperation, and I worry a further race to the bottom on fees.
Rachel Forde The advertising sector has never been hit as badly as it has right now, I don’t think anything will be the same again. The decision to cancel Cannes this year was probably the easiest decision ever made - no agency or indeed media owner can afford that investment right now, or has any appetite for it.
Tim Irwin: The agency business has been undergoing massive upheaval for years now and this situation will only accelerate that transformation.
Change can be painful, but it also has a way of helping companies, people, and whole countries do things they didn’t know they were capable of.
We will come through this, together, strengthened by new processes and ways of living and working, and better equipped to help clients and consumers in a digital first world.