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Agencies are expected to do more work for less profit study finds

We all know that creative agencies have a unique and innovative approach to challenges. For the pandemic, that innovative approach was diversification. According to a recent study, over half of agencies (56%) started to offer more services in 2022. More services create more work and the post-pandemic boom was ever-present in the sector with 68% of agencies producing more work.

In line with this trend, you’d assume more service and more work equates to more profit, however that is not the case here. Only a quarter (27%) recorded higher profit margins, with 31% recording lower profit margins for the year.

Agencies are striving to do more with less, which as a result is impacting staff and driving the great resignation. In 2022, it’s essential that agencies adopt sustainable practices to ensure deliverables are accurately budgeted.

Making a change

Agencies add value, but that value should be tailored to ambitions. Developing a deep understanding of a client’s goals and working with them to set clear, realistic expectations is essential. Clarity on what needs to be achieved and how you will get there can ensure you don’t start overworking a project by adding on additional work that is out of your agreed proposal.

Working with numerous clients, it’s essential that agencies are able to keep on top of schedules, budgets, actual costs and overall project performance - across the whole portfolio. Embedding a project management solution is a simple way to collate this information into one clear, accessible place.

A proactive approach to management margins will make a huge difference here. Almost half (44%) of agencies expect to expand by between 20-30% in 2022 while only 39% expect to grow their teams. To continue to operate successfully, a comprehensive client overview is required and will need to be managed meticulously.

Staying on top of workloads and scaling up operations to keep pace with growth will be key to success for the rest of 2022. More, more, more isn’t a sustainable solution, change is needed to not only survive, but thrive.

Methodology: At the end of 2021, software firm Deltek ( surveyed nearly 200 agency professionals worldwide to find out how creative agencies have been evolving to meet the current challenges and what their top priorities are in 2022.

Written by Neil Davidson, regional VP, EMEA and APAC at Deltek

PRinsight will be examining what agencies want from their clients in a feature to be published on 5 May

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