Financial Turmoil? Independent Agencies Share Optimistic Findings

As the news of a financial crisis looms with an increase in the cost of living, higher interest rates and inflation, the Alliance of Independent Agencies (the Alliance), polled 52 of its members in the creative, media, digital, PR and experiential sectors, to gauge the impact of the turmoil. 

The result saw optimism and no material impact in at least 75% of the respondents whilst the balance showed a mixed picture of client budget cuts and delays in campaigns being confirmed. 

Whilst the results indicated a variation in performance, given the challenging financial outlook, 75% of Independent Agencies were reporting no budget cuts and many reporting winning new business. This latter uplift in business prompted Ryan Lietaer - founder, CEO of creative advertising agency Accomplice to say: “the agency has not seen a pullback across clients and are being awarded more business by clients coming to us as a more cost effective and relevant solution provider.”  

Nick Gray managing director at Live & Breathe pointed out that whilst the material costs had increased as a result of the war in Ukraine it had “worked in our favour in some ways as an agile and lean independent agency we can still make a margin, so we are picking up work from the networks”

Terry Martin, operations director for the Alliance commented that: “the feedback from members highlighted that, as they found during the pandemic, this was a time to form deeper relationships with their clients to get through it together.”

So, whilst the majority of independent agencies are reporting no decline in business, given current circumstances there is still an air of caution with Q4 predicted to still be buoyant with less optimism for Q1. As another agency reported it is “Not the reduction or pulling of work but getting things signed off is taking a very long time and projects are being launched later. It remains very busy. I would bet Q4 will be buoyant, but Agencies are going to need to buckle in for Q1. “ 

There have also some interesting specific sector trends emerging with experiential continuing to perform strongly having been adversely affected during the pandemic with one leader commenting: “We have not seen any projects pulled or reductions in spend. Brand experience / experiential (and IRL activations in general) still seems to be in real demand right now.” 

Yet those with a diverse and international client base find the effects of current financial circumstances more subtle  “We aren’t seeing any impact on budgets but most of our clients are global, so the impact of the financial situation is more nuanced”

The results of the poll seem to indicate that the majority of Independent Agencies have continued to gain more traction and are managing to adapt to the current the situation. As with the pandemic many are seeing this as an opportunity to work to their strengths being more agile and lean than their counterparts. 

The poll can best be summarised by Paul Phelps, CEO of AMS Group: “We are not currently experiencing any sign of clients pulling or deferring their budgets due to the negative economic outlook but, as is the way these days, our mantra is “don’t count tomorrow!” 

The Alliance of Independent Agencies is the trade body that promotes and represents independent agencies. The Alliance supports a community of nearly 5,000 Agency professionals across 100 agencies allowing peer to peer groups to network & collaborate to achieve their personal and professional goals.