5 Ways That The Advertising Business Will Change Post Covid-19
By Alvas Onguru
This global health crisis rages on. As I Write this, more than 3 million people across the globe have been infected with the Novel Coronavirus and so far, more than 124,600 people have lost their lives to Covid-19. These numbers are rising every minute. The world has virtually come to a halt. Yuval Noah Harari has written, in the Financial Times, a disturbingly dystopian prediction of the world post-coronavirus.
Businesses have been affected in very profound ways. Many of the businesses that emerge from this crisis will have made drastic changes in order to survive. Those businesses that are staying afloat are having to cut costs, including reducing staff salaries and even declaring redundancies as revenues thin out. Businesses that depend on other businesses for their custom are hardest hit. Like those in the advertising industry.
So, what will the advertising agency business look like post-covid19?
1. The rise of the Webinar
One of the trends that will greatly impact the advertising industry is the now almost ubiquitous dependence on the Internet for business, social and personal interactions. The Coronavirus crisis has proven that for certain categories of work, working from home can be extremely effective and one does not need to commute to the office every morning in order to deliver and get work done. Meetings are being held online. Work is performed and delivered over the internet and payments made and received electronically. Consumers too have found out that it is relatively cheaper in time and financial cost to interact online. More and more people will get online to work, shop, chat and get entertained. As a result, online platforms that support these activities will sprout and flourish. Advertising will follow these platforms online. This will accelerate the death of traditional advertising forms as more and more of us consume advertising online.
2. The "Uberization" of talent
Or, as some people call it, the rise of the "gig" economy.
As businesses struggle to stay afloat, more and more talented people will find themselves unable to hold down "permanent" jobs as we know them. These talented men and women will start pitching their skills to the highest bidder. This is already manifest in the advertising industry as some agencies that I know are already managing cost by commissioning work to freelance designers, writers, media planners and even account management executives. What’s more, the preponderance of work online will only reinforce the “gig” economy.
3. The advertising industry will consolidate.
Agencies are taking drastic measures to cut costs to stay afloat. The ultimate survival trick will be agencies coming together voluntarily and pooling resources. The fittest agencies in this game of survival will be those that successfully come together to take advantage of the economies of scale afforded by consolidation.
4. “In-housing" of suppliers.
Ad agencies rely on a host of third party suppliers when executing the final product. Photographers, film makers, music and sound production experts all come into play at the tail end of the creative cycle. As technology converges, many of these functions become more accessible both technically and financially. Employing continuously emergent technology, the agencies that survive will either build production capability in-house, or partner with companies that are doing this in order to take advantage of the resultant economies and cost savings. This trend is already visible in agencies in more developed markets where a lot of third party production work is being folded into the agencies through M&As or via new startups within the agencies.
5. The death of the creative pitch.
Even in the best of times, when the ad industry was buzzing and humming along at full throttle, the speculative pitch has always been a controversial way to gauge an agency's ability to manage a potential clients' advertising. In such speculative pitches, agencies are asked to develop speculative solutions to hypothetical problems of which they may not have full knowledge, for potential clients who's key strategic business issues they may not be fully aware. These speculative pitches are often made at the expense of current paying clients from whom time and other resources are taken away for this speculation to happen.
As revenues thin out in a difficult economy, agencies will be keen to avoid the wastage associated with hypothetical pitch processes and start a drive towards thrifty and more practical methods of evaluating agencies' capabilities.
Alvas Onguru is our CCO and Joint Managing Partner. He tweets from @alvas












