Oliver McAteer
Apr 5, 2020

Brace for job axes to swing and production to change forever

An adland status check necessitates embracing this cliche: It really isn't all doom and gloom.

Brace for job axes to swing and production to change forever

Hand up if there’s a huge question mark hanging over your job.

No one is safe as COVID-19 continues to ravage our economy. The axe is swinging and it will be wielded heavily as we go into week four of official isolation. Sorry to be so blunt.

The tone of those making these tough calls has quickly gone from optimistic-worst-case-scenario-we’ll-cross-that-bridge-when-we-come-to-it to genuinely heartbreaking. We are at the bridge and it will take days to cross.

One adland recruiter I spoke with this week painted a ruthless picture in which, put simply, the best will survive.

"I’m predicting a lot of mediocre talent will get let go," she said. "And that the really bright stars will be a hotter commodity than ever. Good new business people, great client leaders, strong commercially-mind C-suite folks will be in greater demand than ever when we get out of this.

"E-commerce strategists will be a hot ticket too. And anyone who can create high tech and innovative digital brand experiences online to replace concerts and live events will win too."

All major holdings companies have already frozen hires. Lay-offs are happening under the radar. We predict next week will be the first time agency groups are upfront about how many they’re losing.

Job cuts and furloughs are not all encompassing -- some companies are still hiring. Be wary, though, of the virtual list showing open roles. This is a helpful (and needed) resource, but multiple agency positions posted as hiring seem at odds with the freeze stance their parent companies are taking. And the situation is changing so fast, what appears open today could be frozen tomorrow. It is not known, too, how this is being communicated between agency and list-wranglers.

Reallocation of agency money usually earmarked for awards should, in theory, help cap job losses. On Friday, Cannes Lions officially cancelled following pressure from most holding companies which made clear they would not be entering or attending. It doesn't matter what time the festival is this year -- if you're wandering around the South of France back-slapping egos and sipping rosé, you're going to look like a massive arsehole. It's that simple.

Other notable themes that have emerged this week includes the hurricane-force at which production is transforming. As isolation orders stand strong across the country, production agencies are having to temporarily shutter, making traditional photo and video creation all but impossible. With studios closed and shoots cancelled, brands are turning to influencers to create their marketing assets.

An analysis of 1,000 influencers by Obviously found a 33% increase in brands looking to hire influencers to create their photo and video assets. It also unearthed a 50% reduction in creative costs on average when working with influencers in place of a production studio. Then there’s a 40 percent increase in ad performance of influencer-created content in social ads.

Obviously Founder and CEO Mae Karwowski told us brands have been surprised by the quality of content influencers are producing. It’s a massive cost-cutting measure and one that was not being explored prior to the coronavirus outbreak because the idea was too disruptive. This is a peek into the future of production, long after COVID-19 passes.

Meanwhile, the gap between purposeful brands which are actually answering economic problems with innovation and those just separating their logos has widened big time. It pains me to say this, too, but creativity is equal parts thriving and waning. A hit on production means agencies have immediately leaned into user-generated content. Jack Daniel’s and Energy BBDO did it. Facebook and Droga5 did it. Santa Margherita and Republica Havas did it. These montages carry a powerful message. But the format is one that was fatigued well before COVID-19 took hold. It’s already run its course in this new world and agencies will have to get more creative than ever before if they expect to survive. 

Adland’s bigger picture is a bit of a casserole. Some brands are delaying payment terms or halting ad agency fee distribution altogether as they hit the self-preservation button. Those companies fastening belts in the most extreme of ways tend to be split internally, with marketing arms pleading cap-in-hand with the cautious CFO to release funds, according to agency people.

But for other marketers, it’s business as usual -- they’re deep in virtual pitches, they’re pushing international CMO searches, and they’re continuing to pay their partners on time.

How agencies are weathering the storm comes down to a game of client roulette. RIP to the small shops built on travel brands. And a sigh of relief for those servicing CPGs and essential business.

Basically, the bigger the shop and the broader the roster, the greater chance of survival.

Campaign US

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