Thinkpiece: The prosperity party won’t go on forever. When it ends, be prepared for changes in agency life

Technology has kept the economy soaring for the past few years, enabling tech agencies to choose their clients and set the terms of the relationship. Recent market ’corrections’ prove that the party can’t go on forever. So what happens to the agency business when the engines cool down and we have a ’soft landing’?

Technology has kept the economy soaring for the past few years, enabling tech agencies to choose their clients and set the terms of the relationship. Recent market ’corrections’ prove that the party can’t go on forever. So what happens to the agency business when the engines cool down and we have a ’soft landing’?

Technology has kept the economy soaring for the past few years,

enabling tech agencies to choose their clients and set the terms of the

relationship. Recent market ’corrections’ prove that the party can’t go

on forever. So what happens to the agency business when the engines cool

down and we have a ’soft landing’?



It will be a buyer’s market - something we haven’t seen in long

while.



Agencies will again compete for clients. The current trend of

consolidating into larger holding companies makes agencies more

profitable, but it also makes it harder for them to properly serve

smaller clients.



Clients held captive by high rates and agency demands for equity during

the recent gold rush are still feeling the sting of agency greed.

Agencies will be held even more accountable to cost-justify everything.

Unnecessary spending and marking up expenses will be a fleeting

memory.



Leaner, less-costly agencies will appeal to efficiency-conscious

clients, who will insist on paying for results, not plush lobbies or

conference rooms with skyline views.



Some clients may demand agency fees based on results. If this demand

comes from blue-chip accounts during leaner times, some agencies will

give in. Clients may want to pay project rates, and agencies, no longer

in the driver seat, will comply. Agency profit margins will be squeezed

even tighter. Like today’s tech start-ups, agencies will have to work

smarter, faster and cheaper.



Smaller, independent contractors/agencies can react and adapt to change

faster than a large holding company. As companies and agencies downsize,

economically astute clients will outsource marketing communications to

contractors who can pick up the slack.



Even in our next downturn, agencies will continue to have difficulty

attracting top talent. Practitioners have experienced the free-agent

economy and will be able to present themselves as the marketing

communications solution when money is tight. Senior marcom pros will

continue to ’just say no’ to adding two hours of commute time to their

day; there will still be work for suburban clients closer to home.

Trendy restaurants near a downtown agency don’t mean much when money is

tight and there’s a family at home to have dinner with.



Through boom and bust, the changing face of business will lead to more

agencies resembling consulting firms. Some agencies are already offering

telecommuting and flextime to compete with corporate side options and

benefits.



A change in the economy will cause an evolution that redefines who is

fittest to survive. Undoubtedly, some kings of today’s jungle will

become the extinct dinosaurs of tomorrow.



Jon Boroshok is president of TechMarcom in Westford, MA.



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