ICOM agencies invest in tech, find other ways to grow business
Last month, in the most recent survey, more than half of the 40 responding ICOM agencies (http://www.icomagencies.com/printable_members_list) believe the economic climate will remain volatile; however, four out of 10 also believe there will not be a double dip recession. Three out of 10 do think there will be a double dip recession, while others responded "don't know."
ICOM is one of the world's leading networks of independent advertising and marketing agencies. The agencies have just completed their annual Americas Regional Meeting in San Juan and EMEA Regional Meeting in Ljubljana. The Asia/Pacific Regional Meeting and Digital Workshop are set to take place Nov. 10 in Kuala Lumpur.
Among other survey findings...
- Just over half of respondents believe that the current environment of volatility will be the template for a new way of doing business
- One-third of respondents believe market conditions will stabilize and return to a more steady economic environment
- 8 out of 10 respondents believe that current conditions are making more demands on employees and the amount of time required for work
- Just over half of respondents believe employees are more concerned about the work-life balance than in the past
The survey also found that the biggest area for investment by agencies is by far technology and for everything from systems and software, helping their businesses operate more efficiently, to resources that are allowing agencies to expand their digital offerings to clients.
As for where agencies are trimming, most are finding ways to become more efficient by carefully aligning its staffing and people resource needs with its business requirements.
ICOM began focusing on the economy in periodic surveys of its members in 2008. At that time, agencies began noting concern in their markets and began making changes to meet new challenges, such as reducing staff, establishing a hiring freeze or postponing or cancelling plans for large-ticket purchase and becoming increasingly aggressive with their new business activities. Some began expanding their scope into more areas of marketing while others chose to become more targeted and selective about the type of business they wanted.
When asked to name the most important steps they are taking to find the right balance between protecting their agency's bottom line against another recession and being prepared for growth, the most frequently cited steps were:
Areas related to personnel/people
- Maintaining conservative employment levels
- Retaining the best talent
- Cautious permanent hiring; more use of freelance talent
- More communication and training to keep staff informed and motivated
Areas related to expenses/p&l
- Extreme vigilance overall about margins, pricing, expenses
- Continually improving efficiency while delivering the same or higher level of service through better productivity
- Quarterly reviews of business performance vs. plan
- Strong control on credit
- Requiring payments on all projects
- Mandatory three quotes when using external suppliers
Business development/partnering/client-related activities
- Aggressively pursuing organic growth and assuring good client relationships
- Targeting industry-leading clients in new business efforts
- Recommending more below-the-line solutions and digital to clients that have been forced to cut budgets
- Applying more stringent criteria for new clients even though seeking to increase the number of clients to better spread agency risk
New services/technologies/misc
- Investing in new technology
- Offering new services especially public relations and digital
- Better integrating all services
About ICOM
Rollinsville, Colorado (USA)-based ICOM claims to be the most geographically balanced of international independent advertising and marketing communications networks with 70-plus member agencies in more than 50 countries. Founded in 1950 as the National Federation of Advertising Agencies, ICOM offers clients an alternative to the huge and increasingly similar agency groups. Today, the network has billings of US$2.5 billion and gross income exceeding US$390 million.
