There's a saying that most of us have heard: Real estate is always a good investment. Even in tricky times, most financial advisers would advise us to hang on tight to property for the greatest long-term return. Sometimes that takes nerves of steel. But it's worth it.
The same could be said for how we run businesses—specifically, agencies. Yes, it's volatile out there, and it's been unpredictable for the past three years. But if we're going to avoid setting back our industry's talent and creativity and weakening our position with clients as well as our output, we need long-term strategic plans. They should serve as the road map to deter us from making knee-jerk reactions based on only one year's economic forecast.
This article is a plea for agency leaders to approach this year with a farsighted mindset in relation to talent, creativity, and innovation. Let's all think beyond just the next 12 months and focus on the next 12 years instead.
Stop the talent pendulum swing
First there were the layoffs of the pandemic. Then came the Great Resignation, and a scramble for talent quickly followed. Now another wave of mass layoffs is hitting. It's too much. It's too knee-jerk.
Moreover, some leaders are scaling back their DEI initiatives as a consequence of the economic uncertainty. That short-sighted approach will ultimately hurt their agencies' relevance and longevity, as well as set back significant progress that needs to continue in our industry.
Leaders should take a balanced approach: Keep cool and take the long view. Farsighted agencies and brands will seize a rare opportunity to snag new, exceptional talent in this market as a result of layoffs at companies made anxious by economic uncertainty.
Commit absolutely to fair pay and resources to support employees' personal well-being, alongside DEI, while continuing to invest in your culture of personal and professional growth. Those areas are top of mind for candidates, and companies that consistently and genuinely prioritize those areas will have a leg up on competition.
When you prioritize talent and truly live by company values, your employees will be empowered and motivated to grow the business alongside its leadership.
Keep investing in innovation
If we were to take a poll and ask how innovation is defined, there would be a huge assortment of answers, so we must first look at what innovation is not.
Innovation isn't a tool, a gadget, a technology, or a process. It's finding ways to do things like they've never been done before—which is no small feat.
Ongoing commitment to innovation that harnesses technology and creative data is vital. Because in the cluttered, media-fragmented information age we live in, those are the catalysts that help us arrive at our desired goal of a creative breakthrough. At FIG, for example, we've consistently invested up to 10% of our annual revenue in innovation. It truly changes the way we work and the effectiveness of the work we do.
The strongest and most enduring innovation typically doesn't emerge when things are going well, it emerges under pressure. Agencies should use this time of uncertainty to adopt an iterative mindset, experimenting with innovation to find the thing that can set them apart.
Adopting the mindset needed for innovation will serve leaders beyond just the present moment; it will sustain us well into the next 12 years and beyond.
Understand that creativity comes from both man and machine
The growing amount of technology at our disposal to work more efficiently has resulted in constant talk about how far is too far—about AI's replacing creativity... and us. It's absolute nonsense.
Agencies shouldn't view AI as a threat to creativity, but as another option in the myriad of effective tools at the disposal of creatives to do great work.
AI also frees up people's time to focus on the higher-craft, higher-brain-power aspects of developing work, campaigns, and platforms.
Data and AI work together in a synergistic way. Harnessing the effectiveness of data and combining it with human insight pushes the boundaries of creativity to ultimately create change.
Never cut spend in tough times
Brands should look at the long term, too.
Take, for example, Airbnb, a B2C organization that essentially turned away from performance media in 2022 and invested most of its efforts in brand marketing, which builds lasting success over time. Now, 70% percent of the company's site traffic comes from direct, organic visits. That's compared with 40% for Marriott and Expedia. Such brand strength has resulted in a net margin twice those of its hospitality peers. Airbnb also generates $500K in revenue per employee—more than most tech companies and 10 times greater than hotel chains.
It's true for B2B brands, too: Companies that invest over the long term generate returns in spades. Cisco is a powerful example. It was ranked in the Top 20 of Interbrand Best Global Brands' 2022 Best Global Brands list, in part due to Cisco's 14% year-over-year growth from 2021.
The worldwide technology leader has been connecting people to the Internet since 1984, and it has kept up with the ever-evolving digital landscape by remaining agile and expanding its product offerings to include a software footprint, not just hardware, through a refreshed brand strategy in 2018. That strategy, revolving around the idea of connectedness, a theme that was also present in the brand's previous communication platforms, propelled the company into the present.
At the heart of the new positioning lies the notion that Cisco's technology "is creating a world of potential" as it builds the bridge between "what is hoped for and what can be," as expressed in the tagline, "The Bridge to Possible."
* * *
As recessionary times continue, review your long-term ambitions and plans. Protect them at all costs. Long-term thinking is key, not only for the next 12 months but also for the decades to come, when COVID, the recession, and 2023 are all but distant memories.
More Resources on Running an Agency in a Recession
Know someone who would enjoy it too? Share with your friends, free of charge, no sign up required! Simply share this link, and they will get instant access…
You may like these other MarketingProfs articles related to Marketing Management:
- The Top Challenges Companies Face in ESG Reporting
- Empowering Sales Success—The Role of Marketing in Sales Enablement: Owen Richards on Marketing Smarts [Podcast]
- Marketing Has a Data Problem, and Here's What Can Fix It
- How to Attract and Retain Top B2B Marketing Talent
- How Employers' Political Stances Affect Recruiting and Retention
- What Remote Workers Do While on the Clock [Infographic]