Corporates and agencies alike are up in arms about the predictions and prognostications for 2023's inevitable marketing malaise.Marketing budget backpedaling is nearly inevitable in light of inflation spikes and the Fed's rising interest rates.But let's let the data do the talking.Here are a few stats, courtesy Axios:
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Advertising revenue is expected to slow back to 2020 levels in 2023.[/caption]
Large-scale layoffs are occurring in some over-hired areas in the tech sector.Facebook, Amazon, Microsoft & Google as well as a number of private unicorns have experienced large-scale layoffs in the last few weeks.Jeff Bezos' Twitter comment reflects the overall sentiment well:
Furthermore, the tech-heavy NASDAQ has seen heavy losses as growth companies have tightened their belts.Unfortunately, many such layoffs often occur in what are viewed as non-critical areas, including marketing.
Regardless of where you think things are headed, where there is pain, there is even greater opportunity.Because we try to adhere to a growth mindset, we actively seek opportunities rather than crawl into a hole.Let's innumerate just a few.
Layoffs almost always coincide with a rise in startup formation.Marketing agency startups are one such sector that is likely to grow in the coming months.As such, marketing agencies are also likely to experience a peak in demand for outsourced work, including white label digital marketing needs from partner agency clients.This presents a unique opportunity for both new and existing agencies that can partner on exciting digital marketing projects.
The internal marketing function and need does not evaporate with layoffs.While layoffs may cut immediate costs inside larger organizations, there are still functions and tasks (at least minimally) that need to occur in order for the business to function at least at a status quo level.Said tasks either require the existing marketing headcount to work harder and longer (a phenomenon we saw in the layoffs of 2008) or corporations may be prone to look for outside help from an agency.Here are some arguments as to why the agency model is of benefit in such a scenario:
An outside perspective is almost always helpful in seeing the opportunities in spite of the challenges, all within a budget that is likely smaller than hiring an internal team to assist.
In the competition for limited or smaller budgets, incumbents have a greater chance to make waves and land new business.They have the experience and work portfolio that showcases ability.An established team with sturdy internal systems and processes helps too.
Tighter budgets typically equate to greater ebb and flow based on real-time, internal revenue adjustments.Agencies like recurring revenue too, but the reality is they're contractors whose services can be purchased a-la-carte and when needed.Such a relationship means marketing budgets can be flexible without having to fire and hire internal staff, which can tank morale and cause legal employment issues.Outside contractors solve this in-house issue with on-demand assistance.In such scenarios, hiring a marketing agency may trump the hiring of full-time, in-house marketers.
Finally, a tighter labor market favors the agency model, especially when hiring freezes are present:
It is also interesting to note that even with larger layoffs on the horizon, some 50% of workers are still looking to quit.
Not all is gloom and doom.Some silver lining exists. According to GroupM, we are likely to expect:
CEOs and investors at various levels are split on how they feel the next 6 to 12 months will shake out.But there are some inelastic industry sectors that are more likely to thrive and which marketing agencies tend to target during recessions.To name just a few:
There will be pockets elsewhere that are also likely to weather the storm over the months ahead.
Whether you're a corporation or one of the marketing teams that serve them, adaptation is paramount heading into this coming year.The best marketer is a chameleon, able to adapt to its changing surroundings all while providing incremental value, preferably above the cost.We'll continue work to nail that internal benchmark for each of our white label SEO clients as we head into 2023.