The Reconstruction of the Agency Landscape: Where Do We Go From Here? | Industry Insights | All MKC Content | ANA

The Reconstruction of the Agency Landscape: Where Do We Go From Here?

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The rising amount of pressure agencies and marketing teams are under has been becoming clearer. The state of the economy has restricted budgets, paused investments, and slowed down business deals, to name a few of many mounting challenges.

However, the elephant in the room is the massive talent shortage, which is leaving major employment gaps in hiring and retaining entry-level talent. Not only is this adding pressure on agency directors to complete more work with fewer resources, the mass exodus of talent is putting a strain on agencies' relationships with their brand partners and clients.

To top it all off, Google's recent announcement of another cookie deprecation delay has agencies split. Some are taking Google's announcement as a temporary reprieve to ride out the third-party cookie wave, while others are searching for proven technology solutions that they can incorporate into their marketing strategies. 

Needless to say, the marketplace is scattered, but there is hope with the recent increased demand for agencies. Where do we go from here to keep up with the momentum?

How Did We Get Here?

Once the pandemic struck, shrinking budgets and increased client demands caused a major strain on agencies as they were forced to meet the same expectations with less funding and staff. Not to mention, the entire work landscape shifted from the physical to the virtual world, forcing a communication-based industry to resort to remote work. With companies forced to work remotely, agencies suffered a lack of community and struggled to find ways to keep employees engaged while finding conducive ways to show support during a turbulent time in the world.

Before the pandemic, agency life included working in the office and enjoying the many perks that came along with it, such as client lunches and attending exciting industry events. Although some of those perks are making their way back to normalcy, in this post-pandemic work landscape, there is less desire for those perks.

Instead, a major draw for employees is the ability to work remotely. Many companies have made headlines for forcing their employees to come back into the office either full-time or in a hybrid setting, leading a wave of employees to resign from their roles to search for organizations that offer remote work. The pre-pandemic agency culture seems to be a thing of the past, but there is hope when it comes to looking at the future of agency life.

Operation Acquisition

The pandemic permanently shifted the workplace paradigm. In the wake of the pandemic, many employees have had the luxury of building their own schedules and getting their job done from their homes. Why would employees want to return to their standard 9-to-5 after experiencing a taste of this freedom?

Economic conditions are another factor that has contributed to this new paradigm. Inflation and an increasing college-aged workforce have led to a demand for higher salaries, which oftentimes agencies cannot afford. This age bracket demands less workload and higher pay; agencies end up hiring fewer employees or continuing to search for fitting candidates.

Following the Great Resignation, the remote experience went from being seen as a perk to becoming a prerequisite when choosing a job for many potential job candidates. In many instances, it is a deal-breaker. This disruption has caused a major gap in junior and mid-level roles due to the cultural shift and economic conditions. A large portion of the workforce has become accustomed to the flexibility provided by remote or hybrid jobs, ultimately making this a deal breaker when choosing employment.

The unique experience a company provides can often motivate an employee to overlook certain aspects, such as lower pay, but lower pay and little to no perks can push an employee to seek other opportunities. Now more than ever, it's important for leadership roles to empower the junior level to lead themselves: by allowing them to choose when to come in and where to do their work, there will be better output. A little autonomy can go a long way.

Looking Ahead: Strategies for Talent Retention

When facing the challenges of employee retention and tight budgets, it's essential to focus on the talent already present in the company. Research conducted by PwC shows one in five professionals have plans to quit their current job in 2022, supporting the fact that more attention should be placed on educating and investing in existing staff.

Agencies can invest in their existing staff by teaching them a variety of new skills or job roles rather than hiring new employees. Further education and growth are often great incentives for employees in both professional and personal development. Educating existing staff on new skills or job roles also creates well-rounded employees that can help bridge gaps in areas an agency may be lacking.

Employees also seek a sense of community and want to know if their efforts contribute to the success of the company. Overall satisfaction with a job is a major factor in whether an employee will choose to stay. Some strategies agencies are using to meet retention goals include:

  • Leadership Trust: The morale and company culture of a business starts from the top down. Transparency and empathy in leadership are critical. When employees feel their leadership is attentive and considerate of their needs, it can help foster a healthy work environment and lead to higher employee retention.

    For example, when the pandemic first hit, Horizon Media CEO Bill Koenigsberg did not lay off a single employee. Instead, executive leaders, including Bill himself, took a pay cut and paid back the cut pay in full once the agency bounced back. 

    Demonstrating trust in employees is crucial when setting the atmosphere of the workplace; being flexible with work location, not setting constraints on office hours and allowing employees to prioritize their personal lives will ultimately provide the opportunity to work in a manner that is most efficient and beneficial for all.
  • Employee Input: Requesting feedback from current employees on a regular basis and taking their thoughts into consideration helps the company make informed decisions. Ultimately, this can prevent the company from losing employees that are unhappy with any decisions made and can even allow for a middle ground.
  • Team Activities: Providing unique opportunities such as happy hours, team lunches, and games and contests allow for face time, whether it be in-person or virtual, and allows employees to bond in a way that isn't strictly focused on work. Especially in remote work environments, getting to know colleagues on a personal level can foster a healthy company culture and make an inclusive environment for all.
  • Investing in Employees' Passions: Supporting employees' passion projects can be extremely beneficial for retention. Providing the opportunity for them to share their passions not only helps them connect with others that have similar interests, but also creates an environment to connect on a personal level outside of the work realm.

Retention of employees improves efficiency since the amount of time an employee remains at a company reflects the amount of time spent practicing the skills necessary to complete the tasks. Other than efficiency at completing tasks, less time is spent training new employees and instead can be put toward furthering the training of existing staff to improve the quality of work. Being able to retain employees not only fuels efficiency and quality of work but also builds credibility and trust among prospective employees and clients.

Lean Into Vendor Support

Leading up to the pandemic, industry murmurs were that clients would be transitioning marketing efforts in-house and away from agencies. However, the rapid evolution of topics such as privacy, identity, and CTV has spurred client need for agency consultancy again.

Since brand visibility is vital, clients must place a stronger focus on their own brand to help them recover from the losses that resulted from the pandemic and fuel future long-term growth. Not only do clients want to focus on recovering, but they also want to prevent a potential downfall in the case of an economic crisis.

Agencies facing staff shortages have had to seek alternative ways to fill their employment gaps. Although resources may be slim, agencies have an opportunity to rely on their partners and vendors for support. Often, vendors have access to vast resources that are not always taken advantage of by agencies.

As such, agencies should work closely with vendors that offer transparent guidance to help them optimize their workflow, without hindering their bottom line. A vendor who is a true partner to the agency is one that will propose solutions to challenges, even if they are not within their direct scope, and would require the agency to lean on another vendor.

For agencies to withstand the pressures of an evolving landscape both internally and externally, they must embrace a positive outlook for the future. Despite economic uncertainty, agencies have an opportunity to nurture relationships with existing partners and clients as we navigate a path forward. Invest in your current employees and offer a unique company experience that provides employees an opportunity to grow and feel valued. The ability to be nimble and proactive will create resilient agencies that can withstand whatever is thrown their way.


The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.


Brian Mulderrig is the SVP of sales at ViralGains.

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