As inflation continues to grow, agencies are getting creative about how to cope – both internally and externally.
“As an outcome of the pandemic, the high inflation affects our business very similarly to what we’ve seen in 2020 – both our clients and our people are impacted,” says Veronik L’Heureux, EVP, managing director at Spark Foundry Canada (part of Publicis Groupe Canada). “Many clients are still facing financial pressure due to their entire supply-chain being highly impacted by inflation, and as partner we need to support them through that challenging time.”
L’Heureux says tackling this change is all about striking the right balance between short and long-term goals. “While the challenges with our clients and people manifest themselves differently in economic uncertainty versus the pandemic, our business challenge remains the same: find the right balance between investing in short term big bets while not losing sight of longer-term business performance.”
Others, such as Matt Ramella, president of Reprise, argue coping is more about dealing with market effectiveness. “Inflation has driven up pricing across many client categories and products we work across. Consumers becoming more price sensitive can put pressure on performance marketing effectiveness when it comes to key metrics like conversion rates and ecommerce sales volume. Cyclical industry verticals that skew more to discretionary and expendable purchases, such as tech, apparel, home improvement and appliances, will experience headwinds during periods of inflation,” he says.
“Consumers also tend to trade down on necessity goods and essential services, like food and beverage, personal care, and telecom services,” he adds, something his agency handles by analyzing changes in category dynamics and shopper journeys. At the same time, it’s important to also keep a close eye on reforecasting performance metrics, “especially for budgets focused within eRetail, online marketplaces and direct-to-consumer channels.”
Cynthia Steele, president of Mediabrands Content Studio, says the current inflationary challenges have inspired the agency to find new ways to do more with less. “This means reassessing established ways of working and creating opportunities to deliver beyond the expectation of our teams and clients more efficiently and effectively.”
This has come to fruition through many different applications of technology, from utilizing AI to supplement and spark new ideas to streamlining and simplifying creative versioning through automation.
“Technology alone isn’t the answer,” Steele adds. “We are also continually reviewing and optimizing our processes and systems to reduce hours spent on administrative activities and redirecting that time to strategic and creative pursuits. Most importantly, we are connecting with our employees more than ever to understand what drives value and engagement for them. Based on their feedback, we are adapting our people programs and policies to better meet their needs.”
Axel Dumont, president of Cossette Media, says the focus has been on delivering maximum efficiencies for their clients by making their investments last longer. “For me, it’s reinforced Cossette Media’s Canadian buying power,” he says. “Experience and deep relationships with vendors have allowed us to find ways to make our clients’ media dollars work harder, even as costs continue to rise.”
