2020 has unleashed the kind of turbulence that nobody saw coming. Marketing budget cuts have ravaged the advertising sector and that has set in motion an entire domino effect. We are hearing about downsizing, pay cuts and in some cases even shutting down of businesses. In the midst of all this, it’s extremely important to look for the silver lining and there are some. June has already seen a bump in ad spends, May was better than April. We hope this trend continues as the country opens up and pent up demand manifests into sales uptake.
There are clearly some shifts taking place, which are actually the making of a perfect storm for new age digital agencies. By this, I mean companies that have capabilities beyond social media management, website/app builds and media buying. While everybody knows that digital marketing spends have been going up and in this trying period will increase share of wallet compared to other mediums, the real impact for new age digital agencies will be far greater than a temporary bump in business. To understand this better let’s go back in time to 2008. The global meltdown accelerated the adoption of digital marketing and made it part of mainstream marketing and we all know how the category exploded post that. Now 12 years later, we might end up witnessing another tectonic shift where new age digital marketing agencies will emerge. This is being fuelled by multiple factors.
- Lockdown restrictions have forced brands to adapt quickly to digital content that can be created at homes. While this will give way to more elaborate production as the country opens up, smart brands will continue pushing their agencies for more efficient content creation.
- Influencer marketing is the easiest and fastest way to get your message to your audience. With celebrities also jumping into this bandwagon, brands with lesser budgets can now afford to work with the biggest of stars. Also the exponential growth that video consumption has been witnessing for a few years is responsible for creating a whole new generation of content creators and influencers. The emergence of platforms like Tiktok with a massive user base has further fuelled the entire influencer marketing and self-content creation combination.
- FMCG brands have been leading the charge on trying out new platforms on Digital. Look at brands like Reckitt Benckiser and Pepsi dominate Tiktok. Financial categories have rightly seized this opportunity to ring in actual change in user habits. Remember it was the financial services category that was the biggest champion of digital marketing in 2008 and single handedly built this category then. Now they are at the forefront of using influencer marketing, quick content creation, programmatic media, emerging platforms like tik tok and driving vernacular content creation.
- India’s success over the years has also been built on the shoulders of many family run medium size companies. They typically range in the Rs 500 crore to Rs 2500 crore size. They are all now forced to embrace digital transformation like never before. These are smart entrepreneurs and business survival runs in their genes. They will all quickly adapt to the new normal.
- Meanwhile large network agencies are slow at cost reductions, have stiff targets to achieve, and are facing tremendous head winds from large clients. This will result in hiring freeze, downsizing, a block on all investments in new areas and a lot more outsourcing.
If you are a new-age digital agency with offerings like influencer marketing, short format content, programmatic media, digital transformation advisory, analytics, e-commerce marketing and more, this right here is your perfect storm building! Established brands need your services as they look to optimize their spends and shift to newer avenues. Family run companies need you for their digital transformation goals. Large agencies due to costs cuttings and hiring freeze will look to outsource. Seize this moment like never before. Remember every major global crisis has created a new crop of wealth creators; do not miss your time in the sun.