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Demand for agency services during covid-19 (q3) industry report

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Demand for agency services during covid-19

As we are aware of the fact that covid-19 has changed all of our lives at a great scale. It has made us live in homes completely and continue our work activities while staying grounded. Today we discussed agency services during covid-19.  But this was felt badly at the beginning as people were not fond of living like this. People considered this condition as a house arrest because it somehow paralyzed their lives and all the business relevant activities.

Now the situation has completely changed. Traditional forms of businesses are vanishing at a large scale and people are feeling more comfortable while doing their work from home. Thanks to the advent of online trends,  people are now able to save themselves from the never vanishing horror of unemployment.

However, some of the new index tracking the health of the business agencies finds that while the impact of coronavirus has been extended for the last 2 years, it is perhaps not as deeply rooted as told. And it would be surprising to know that companies providing professional services have performed relatively well in the face of considerable challenge. Approximately, more than 22.3% think that they will complete more work by submitting more tasks and therefore they will increase their profits for the present year. This has proven that professional agency services are being considered as one of the three top-performing sectors, along with technology, media & telecoms, and oil & gas.

Changes relating to Agency Services since Covid-19:

If we talk about changes that occurred in the light of Covid-19, it would be difficult to cover all the aspects. Therefore, below are discussed some of the primary changes it has caused in the demand for Agency services since the last two years.

 

  • New Services employed for new challenges:

The consultancy firms have adjusted their business models very effectively with a short span of time in response to the covid-19 crisis. These agencies are accepting existing offerings and enhancing them to meet their company’s current needs. These enhanced client offerings include;

  • cash flow forecasting,
  • modeling, 
  • negotiation support with banks, and 
  • Human capital advice.

Furthermore, Covid-19 doesn’t result in the same for everybody but it has affected companies of different sizes in different ways. It has been noted that companies with annual revenues of $100m or less have tended to feel the impact more than their larger competitors, mainly due to the fact that these agencies lack an adequately created technological infrastructure and architecture in place before the advent of a pandemic.

Therefore as a consequence of this, they are experiencing immense difficulty to recover and redeem, which undeniably has a knock-on effect on the professional services firms and agencies that cater and serve them.

Similarly, the ongoing risks as well as challenges, especially in certain industries, are weighing on the broad business services sector, which includes administrational services from marketing agencies to architectural firms. Commercial real estate has been badly affected by the covid 19 crisis with many projects completely canceled or temporarily paused. This impacts the infrastructural firms that had been hired and assigned to design their projects. It is approximately declared that 12.3% of business services firms or agencies predicted their revenues to grow in 2021, while 16.7% expected them to decline by up to 9%.

 

  • Companies are now more cautious about the future:

 

Fortunately, the pandemic situation has highlighted the financial resilience to withstand the pressure of professional services firms and agencies. More than 27.8% declare that they can move on to trade using their previously stocked existing funds without any need to lower the costs or restructure them. 

However as business leaders increasingly view economic uncertainty as a constraint or hindrance, they remain extremely alert about the forthcoming future. About 46.1% have revised their yearly budget and canceled or delayed their new investments. More than 37% of people imagine a decline in their revenues over the coming year. This speculation is somehow just and can be projected easily keeping in mind the condition prevailing in the world.

 Moreover, it was proven to be believed that there are a few reasons for this caution. Despite probable concerns about the reduction of demand and economic uncertainty, companies are continuously evaluating their requirements as ‘needs’ versus ‘wants’. This influences when, and how, they engage professional services firms. Caution is also linked to the ongoing health threat posed by the virus. 

 

  • The primary key to business model flexibility -Engaging people:

 

The main advantage that professional services firms and agencies have over businesses in other sectors is their capability to transition quickly as circumstances change. They appear to be less levered than many other sectors. They don’t have huge amounts of cash tied up uselessly in inventory. Instead, they rely on human investments, which they can scale up and down according to their list of requirements. They can also refurnish their people by improving their skill set to focus on new areas of demand.

 

  • Firms employing Agency Services to adapt changes according to the trend:

 

Till the present time, many professional services firms have managed to navigate the Covid-19 crisis without drastic implications. Their strong and increasingly diverse leadership teams, sound balance sheets, innovative offerings, technology investments, and resilient business models have allowed them to flex their human capital effectively.

In China, professional services firms are seizing the adjustment opportunities that have arisen with the early nationwide resumption of work and the reopening of the economy. Meanwhile, in Australia, many professional services firms have moved seamlessly to remote working, enabling partners and staff to continue to deliver services while working from home. “Australian professional services firms expect to deliver more services digitally,” explains Farley. “With more of their people working from home than before, investment in technology and cybersecurity will gain further momentum.”

So how can professional services firms continue to flourish despite the economic uncertainty? Our index found that professional services firms are already making detailed plans in relation to workplace safety, financial resources, leadership, and people management. Denham also anticipates further consolidation in the market as high-performing professional services firms take the opportunity to make acquisitions – potentially for an attractive price. “This crisis could certainly accelerate deal-making,” he concludes. “I think the companies that we’re prepared, and have an acquisitive mindset, will drive deals in the sector.”

 

  • Top Investors In Digital Agency Services

 

Hospitality and travel businesses have decreased or canceled their investment in agency services across the board. The businesses that have survived the pandemic are shifting their focus inwardly to local travel and audiences, at least in the near term. Healthcare, retail, education, and food & beverage brands are increasing investment in digital services to position themselves for the upcoming waves of COVID cases, trends, and measures, as well as their aftermath.

 

  • Outsourcing Rising In Popularity

 

As businesses become more cost-sensitive & accustomed to remote work after they have survived the COVID crisis, they are rushing to develop new digital channels for sales and engagement with their audiences. Many respondents have seen an overall surge in demand for their digital services, from software to web-friendly branding. Moreover, respondents expect the demand for their services to remain stable, if not grow, post-COVID.

It has been noted that there has occurred a dip in the demand for their custom software development services which they describe as temporary. This has been offset by the surge in demand for accessible, end-to-end solutions such as Shopify and WooCommerce which allow businesses to set up their e-shops quickly and cost-effectively

Furthermore, businesses are rapidly increasing their investments in distinctive designs & web-friendly branding. This is done to stand out from the fast-growing online businesses They are also exploring new and improved advertising channels & platforms.  As the popular ones are becoming continuously more  popular and competitive; it is expected to  witness a rise in demand for native advertising agencies

 

  • Businesses Are also increasing investment In Cybersecurity:

 

Another change that has been observed is that many businesses are employing agency services in order to secure their business from cybercrimes. Whether it is logo touch-ups or out-of-the-box UX & UI, creative agencies report that their clients are looking for distinctive designs to set themselves apart from the growing online competition. Flooded with newcomers to digital advertising, search engines and social media’s PPC rates are growing. Sales platforms have followed suit and our agencies have reported that their clients are leaving Amazon due to high fees. As a result, brands are exploring new and more accessible alternatives such as native advertising and moderately priced sales platforms such as Etsy and Tic tail.

What was the Impact of the COVID-19 Pandemic on Advertising and Marketing Agency Services?

Many marketing and advertising departments will be up to the challenge. They will be thinking through creative and innovative marketing strategies and practices that will navigate the business through this new normal. For brands, this means dealing with market alteration because of the economic impact on all industry sectors; facing increased competition given consumers’ and social “new normal”; addressing sustainability; evaluating operational options and challenges presented by strategic planning in an environment of uncertainty; analyzing brand reputation issues; identifying potential new products and services needed to meet consumers’ needs and expectations; focusing on creative and strategic marketing campaigns and targeted advertising, and using social media effectively.

These are made all the more important since, as a result of COVID-19, advertising spending is expected to decrease for some in 2020 as stores close and revenue decreases. For example, one online rental home booking company announced that it will suspend all marketing activities in 2020 in order to save hundreds of millions of dollars.4 Other businesses have refocused their spending on purpose-driven marketing, mission-based marketing, and cause-related marketing to better satiate consumers’ increased media consumption while working from home.

For instance, 45 percent of global consumers are devoting more time to social media, online video streaming has increased by 26 percent, online gaming traffic has increased exponentially on one telecommunication company’s servers, and the number of consumers using online food delivery and essential goods delivery has risen dramatically. As a result, many brands may look to optimize their marketing practices to better reflect the increase in online transactions, communications, and face time with consumers.

Practical Tips for Advertising and Marketing Initiatives during the COVID-19 Pandemic

When a defining cultural event occurs such as the COVID-19 pandemic, it is critical for brands to be tactful, employ mindful marketing and be empathetic to consumers’ plight. Brands must acknowledge the crisis while continuously reflecting positive values that will keep consumers coming back for more. This can be accomplished through adjusting marketing campaigns and scheduled content timelines, evaluating the language and imagery used in advertisements and marketing materials, and awareness of consumers’ increased anxiety at this time. Brands must also evaluate prior to release new slogans, logos or other intellectual property for compliance with the appropriate regulatory framework.

To that end, brands have to answer several questions:

  1. How do we currently promote our product or service in the midst of the COVID-19 crisis in a way that resonates with consumers?
  2. How do we communicate with consumers in an effective way after fear subsides and a sense of “normality” returns?
  3. What influencers and endorsers if any should we use to promote the brand now and in the future? Who are the “heroes” that we can applaud?
  4. What promotional activities can we engage in that: 

-promote our brand

-promote positivity in the marketplace; and 

-promote a “good cause”.

Indulging with Social Media and the Use of Influencers and Endorsers

Businesses and brands should consider implementing clear, direct disclosure language, tightening and strengthening the approval process, utilizing indemnity clauses, and creating awareness of disclosure requirements for large and small buys alike. Whenever a company intends to use bloggers and influencers for social media advertising, the company’s website for advertising, or third-party websites for advertising, the company must look to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising as well as the FTC’s recent Disclosures 101 for Social Media Influencers.

Moreover, it is essential that brands ensure truthful, clear, and accurate content is being spread from influencers and endorsers. Because as the current situation prevails, people listen to those who are their ideal. Many actors, actresses, and models also have tons of fans, which helps them to convince the public regarding a specific issue. 

Furthermore, this also applies to messaging from employees and their family members. Businesses must also remember that when using a representative to market on behalf of the company, whether an influencer or employee, the brand and the speaker must disclose any material connection between the brand and the speaker. Indeed, the material connection disclosure must be clear, conspicuous, and simply unavoidable within that promotional communication so that a consumer may give appropriate weight to the content of that communication. Yet, we realize that ad is as yet a vital piece of any business. It would not be right to say it is the key towards enduring these changing occasions since now many web companies likewise give incredible commercial freedoms to your online business. In simple words, while there is a growing focus on the actions of speakers, brands must remain cautious in terms of their efforts. As they will ultimately remain answerable for their interactions if any uncertainty is noticed.

Final thoughts:

As discussed above, Covid-19 has led to a massive change in each and every field of business. People are at home managing their work and carrying out their daily activities while laying on their beds. However as we have talked above, agency services requirement has also increased with the passing two years since Covid crisis has started. 

People are now looking for their work being done by other firms and companies by employing them to make their websites, develop their brand’s reputation as well as market their business towards the general public. Some common agency services include; Ad Campaigns, Strategic Planning, TV Ads, Social Media Management, Content Creation, Web Development, Radio Commercials, and SEO.

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