Finding Success In 2016: What Marketing And Communications Firms Can Learn From 2015 Trends
Last year was anything but straightforward for creative agencies with many contradictions littering the industry. While income growth was positive, margins were depressed, reducing the opportunity for profit to filter down to the creatives. Yet there was still significant investment in skills and technology enabling agencies to reinvent themselves in the dawn of a new age. There were some key areas though that we predict will continue to be focal points moving into 2016.
Transforming revenue into profit
Despite almost every sector within marketing services reporting a growth in total income for 2015, UK agencies struggled to maintain sufficient margins. The primary problem was that agencies were unable to transform this revenue into profit – highlighting an area of focus as we move into 2016.
There were some key lessons learnt throughout 2015 though so in 2016 we anticipate a stronger focus to be placed on boosting fees and value, recovering revenue and improving profitability in order to combat the worrying trend of working hard for no reward.
The A Team
It has been a problem since the recession almost a decade ago and it remains a problem now, accurately summed up in the WPP annual statement – “supply exceeds demand – except in talent”.
Attracting and retaining top talent will continue to be a challenge for firms, and in specialist areas such as digital, it will prove more of an issue for smaller, integrated agencies. Additionally, we expect to see more challenges arise with the use of freelancers as agencies juggle resource management, project completion and ever-rising daily rates.
Technology takes the lead
For some agencies technology represents an expensive outlay, for others it offers a chance to diversify, gain a competitive advantage and streamline operations. Whichever school of thought you belong to, there is no denying that technology is playing an increasingly large role in the creative world and to not engage is to run the risk of being left behind.
In 2016 we expect the focus to shift somewhat from fashionable technology such as apps and wearables to back-end technology as agencies realise just how important it is to be able to understand capacity levels, track work in progress and assign resources proactively.
To find out more about the trends and challenges in marcoms and how to make 2016 your year for growth and prosperity, check out our Industry Snapshot 2016.