Belt-tightening at ad agencies is forcing chief marketing officers to be more resourceful, relying on in-house expertise to handle tough challenges they previously would have hired outside help to address.
Market research firm Forrester estimates that media spending will be off 23% as a result of the COVID-19 closures and the slow business rebound economists predict. To offset the dramatic reduction in revenue, ad agencies have already begun to shed staff.
As dire as that analysis may be, Forrester says “those pressures will force marketers and their agencies to be more innovative, speeding up a shift toward digital media channels that have become even more vital in reaching homebound consumers.”
It also means CMOs will be have a larger, seasoned pool of creative talent, media buyers, schedulers and others to lean on. As reported by Marketing Dive, Forrester’s analysis predicts the ad agency layoffs, which could reach 15%, will “spur a migration to in-house and gig economy alternatives.”
That could fuel a hiring push for marketing and creatives professionals in the coming months, as some of the savings from moving work in-house is used to improve headcount.
Since the Great Recession of the last decade, agency work has slowly been moving in-house. Marketing Dive reported on a survey by the Association of National Advertisers that found 78% of marketers working with an in-house agency. The last time the survey was conducted in 2013, that percentage was 58%.
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