Agency consultant Agency Futures is out with a new study indicating that independent agencies are on the road to recovery from the economic ravages of the pandemic.
The report was developed with survey company Question & Retain on behalf of Worldwide Partners. The survey quizzed 68 agency owners that are part of the Worldwide Partners network of independent agencies.
The study found 64% of respondents posted year-over-year revenue increases in the first quarter of 2021, with 34% citing increases of more than 20%. Just 20% indicated their agencies had a Q1 revenue decline.
Those polled also indicated they are “running leaner” (fewer staff) and putting more senior specialists on day-to-day client work.
Plus, agencies are reporting more business and higher margins from strategy services, with 29% saying they make their highest margins on strategy, followed by media planning and buying (16%) and creative advertising (13%).
Strategic services are seen as a major revenue producer in the years ahead, along with content development and production, per the study.
“The pandemic has thrown agencies back into the role of solving problems for business rather than just communications for marketing departments,” said Doug Baxter, CEO Agency Futures. “Client briefs used to lead with the latest message and media imperatives,” he added. Now, they’re about the problems and needs for greater overall change in their businesses.”
As for “new normal” office life, 75% of respondents said they’ll be incorporating some level of remote working into their routines. Just 10% said they expect to return fully to offices post-pandemic. And 2% plan to abandon offices altogether.
As to resources, more than 50% said they are investing first and foremost in talent recruitment and related areas, much more than in new service offerings (15%) or marketing (9%).
The full report can be found here. The plan is to repeat the study quarterly with the next installment, due out in June.