The COVID-19 pandemic has swept around the globe, causing the tragedy of the loss of life and, at the same time wreaked havoc on the economy.
When the economy dives, advertising is the first to feel it and often the last to recover.
The Future of Strategy 2020
This article is part of WARC's The Future of Strategy report, which is based on a global survey of senior strategists and in 2020 focuses on the impact of COVID-19 on strategy.
The findings within the 2020 Future of Strategy bear this out very clearly with 87% of respondents stating that clients have decreased their media spend.
In a predictable and steady world marketers and their agencies often get comfortable with the status quo – they are lulled into a false sense of security and believe they know what is going on. Strategists have to work very hard to push against the prevailing orthodoxies.
This is different when change is more visible and prevalent. The cultural transformation of the late 1960s Britain was the catalyst that gave birth to the discipline of Account Planning. The rapid societal and cultural change we saw in India last decade is one of the reasons we see Indian agencies and strategists doing such great work.
The 2020 Future of Strategy report shows COVID having a similar impact, creating a moment that needs sensitive and real-time understanding with significant long and short-term implications for marketers. These are moments when strategists come to the fore and shine. This too is borne out by the findings in the report where 68% strongly agree that clients need strategists at a time of uncertainty and 62% believe there is opportunity in helping clients adapt their strategies to a post-pandemic environment.
COVID's impact is vast; from the lockdowns forcing people to adapt their lifestyle and take up new behaviors to the requirement for clients to service these unique needs, many have to transform their businesses to do this or find entirely new models to generate revenue.
With advertising agencies seeing their role diminished, in recent years COVID-19 appears to have been the chance for them to be invited back to the top table with strategists leading the charge – the report showed 54% of strategists are very involved in client’s COVID-19 plans.
The key issue revolves around payment for strategy – it is hard to know what proportion of agencies are billing for strategy hours on COVID-19 related issues vs. those giving this away for free.
The sad irony of the situation seems that while strategists have proved vital to helping clients and agencies through the crisis, the economic pressures have proved to be too powerful, and strategists are losing their jobs. While the survey conducted in the early days of the crisis, 26% stated they had already reduced department headcount.
The issue here is about relevance and value. If clients don't and won't pay for strategists, it's hard in tough times for agencies to keep them.
There seems to be some critical lessons that can be drawn from our recent experiences that need to be considered when the economy returns to some kind of normalcy.
Strategy has to add value and has to get paid for and clients may not be willing to pay if that is just about the work required to make advertising.
However, the findings from the report show that 65% of strategists strongly agree agencies should be billing clients for strategy hours, interestingly this is a 10-point increase from the findings in 2019.
When advertising played a much more critical role in the life and health of brands, things were different.
For agency owners and leaders thinking about their offering and the role of their strategy teams, it has to be about offering a version of strategy where the value is clear to their client base.
This either has to mean providing guidance around the totality of the brand experience and/or are more grounded and fundamental understanding of a client's business, so strategic recommendations can be made that have a material impact.
However, to get this right, there has to be tight alignment between what strategists provide and what agencies deliver.
The problem for strategy, like the ad biz itself, lies in the narrowing of the importance of ads – part of the marketer's arsenal – to be more relevant and get paid. The scope of services offered have to be broader and more holistic, and therefore more capable of impacting the business.
There is no doubt that strategy has a future; the burning question is, does that lie inside advertising agencies or outside them?