Chief Marketing Officers in the US will need to change the way they work with
external partners amid workforce reduction in advertisement agencies.
Ad agencies in US are expected to slash more than 52,000 jobs over the next two years, owing to a 23% decrease in media spending, according to a latest report from Forrester. They are set to see a decline in growth for two years – a decline of 30% for 2020 and 20% for 2021. A large number of advertisers are suspending or delaying campaigns, creating pressure on digital agencies, leading to this situation.
This year, U.S. agencies lost 35,167 jobs and are expected to lose another 16,758 next year. Agencies are cutting an average of 15% of the workforce while, in comparison digital and media agencies are slashing 7%, the report says. The research firm warns that CMOs will lose a vital source of industry expertise with the ongoing layoffs. Moreover, migration of talent towards in-house agencies is expected to be witnessed soon. Now is the time for CMOs, CFOs as well as agency executives to restructure resources and the economic model for services, as agencies may not return to their full workforce at the moment.
CMOs will have to step in and help in combating complex challenges, working towards restoring the revenue growth at the time of economic recovery. The report says the ongoing pressures on the agencies will force CMOs to be more innovative and working towards digital media channels that have become crucial in reaching homebound consumers. In order to maintain growth, CMOs will need to significantly restructure their agency resources. At the same time, agencies will need to embrace automation and hire talent with versatile expertise to position them better.
The rise in cost-cutting pressures has compelled CMOs to look for ways to improve the
efficiency of their marketing efforts for the future. The report suggests that CMOs will need to make the best of more limited marketing resources. They will also need to take on
compensation as part of the broader transformation initiative to drive growth.
