Covid-19 and the Agency industry: Survey Report

Collecting data from over 250 agencies, predominantly boutique agencies (less than 30 employees), we have asked them about their fears, expectations about the future of business, and how they are managing remote work so far. 

We collected survey answers between Wednesday 18th and Tuesday 24th March. 

The results point to a confused and challenging period ahead as businesses and agencies adjust to the new normal. While agencies showcase strong confidence in their ability to work remotely, their sentiment remains bleak on the future of the industry.

A majority of agencies (nearly 95%) declare working or planning to work remotely. When asked to what extent the agency works remotely, which means considering all employees and working hours to what % work is done remotely. A tendency suggests that lager agencies tend to keep more staff working in the office than smaller ones.

The extent of remote work at agencies around the world variate also depending on the geographical region. While North America and Europe are close to operating 100% remotely, agencies from the other areas tend to observe more office presence.

Less than a quarter of agencies conceded exceptions for remote works. The primary limitations concerned specific professions such as finance or job needing to access on-site resources for technical reasons. Other standard exceptions cited by the respondent were exceptions for critical meetings and brainstorming. Lastly, some respondents also mentioned that their remote work policy was not compulsory, and some employees could decide to go to the office if they prefer.

When asking agencies how prepared they were to start working remotely from 0 (not prepared) to 10 (totally ready), the average answer was close to 8.5, with over 40% of respondents giving the maximum answer (10).

The survey revealed that the most common challenges for agencies with remote work were: Communication and collaboration with the team, followed by Productivity and Technical issues. 8.7% of agencies mentioned that remote work poses no challenges at all within their organization.

🤷Communication / Teamwork 34.2%
Communication with other team members was mentioned has one of the main challenges of working remotely. Notably, respondents mentioned the preference for live brainstorming or said that work-in-progress communication in person was easier and more spontaneous.
⚡️Productivity 33.8%
Productivity is also one of the main concerns of agency leaders, as employees may be distracted by children or be not use to collaborate using remote tools.
💻Technical 23.4%
For almost a quarter of agency leaders, the challenges are technical. Including network access, VPN issues or large file sharing.
🙁Morale 12.6%
For an important part of the respondents, maintaining team morale and motivation during these times, as well as developing the company culture has been mentioned as one of the main challenges.
💼Communication with clients 8.7 %
Only a relatively small part of respondents specifically mentioned that communication with clients was one of the main challenges while being operating remotely.

The second part of the survey focused on external business changes for agencies. We asked for the primary services they are offering if they are subject to changes in projects and budgets for the current clients they are servicing. 

Agency leaders had to categorize the changes their projects or budget were subject in one of the four categories:

• ✅No changes (business as usual)
• 😐Minor changes that will not impact the agency business
• 😱Major changes that will havan impact on the agency business
• 🚫Cancellations. 

The summary of all the respondent answers shows that about 45% of budgets and project changes are expected to have negative impacts on the agency business, with an average of 14% of project cancellation. 

When segmenting the answers between digital services and analog or traditional services, it is evident that the later is far more affected by the budget cuts and cancellations collateral to the pandemic. 

We asked agencies their expectation as the new business inquiries change for months to come (positive or negative). For most agencies, the coming months look pretty grim in terms of new business with an expected inquiry drop of -30%.

Analyzing the answers of this survey, which was deliberately built with open questions, we also noted some thought among agency leaders. Here are some of the most prominent ones, formatted for clarity. 

• Some agencies mentioned that in some markets, “up to 20 to 50% of agencies might go bankrupt“.
• Many agencies foresee a bounceback in the market. Expecting it could occur between as early as in the next quarter or up to 12 months from now. 
• Some others see this in a brighter light as an “opportunity for real digital transformation.” 
• Some leaders also said that the pandemic might redefine reality or the business as we know it.

No one is sure how profound the impact will be for our industry, but acting fast and putting people first seems the right action at the moment. While it is inevitable, some will gain, and some will fail to survive, the only way is forward.