AdNews asked industry figures for their assessment of 2022 and outlook for next year
Tom Frazer, Managing Director, Half Dome
After two years of some of the longest lockdowns in the world, Melbourne, and more broadly, Australia, were eager for change coming into 2022. A key theme that emerged for business was the desire for rapid digital transformation, not only from an advertising perspective but across all spectrums of how businesses operate.
This digital shift has created new pressures for a new prototype agency to evolve, as the days of the ‘plug-and-play’ approach to media buying and planning are over. As the demand for transformation increases in our industry, the ability to influence technology, business strategy and operations becomes crucial to creating successful partnerships.
An increased appetite for change and transformation brings a more complex selection process for businesses, leading to the rise of the procurement process. This year, we’ve seen a significant increase in procurement oversight among enterprise-level clients and filtering into the mid-tier. As the industry adapts to this new environment, we expect increased procurement to normalise in the coming 12-18 months. To combat this, expanding capability and adding value such as digital transformation, beyond the ‘brilliant basics’ of media itself will need to be a key focus for agencies.
Border closures and a lack of overseas talent have affected our industry’s ability to attract a new and engaged workforce. The impact has been far-reaching, but a tightening of the talent market has been a key output.
There is no silver bullet on how to respond to this talent shortage, but doubling down on attracting and retaining the best people has come with its pros and cons. We have seen substantial wage increases and pressures on business and relationships in our industry. On the other hand, discovering new and improved ways of how we do things has been a welcomed symptom of adversity. To combat the talent shortage, we have seen increased automation and improved processes and operations for better efficiency. The lack of talent has forced us to adjust, and we’re doing business better because of it.
As travel restrictions ease and we transition back towards some normality, we are starting to see a softening in this talent crisis and expect to see it continue to subside over the next 12-18 months.
Automation continues to accelerate in advertising, with tasks such as campaign setups, optimisations and reporting taking less time than ever. As this trends more and more, agencies have two clear options to respond: take on more clients and participate in the race to the bottom, or shift the dial towards adding real value and away from media becoming another cost centre. I know which side of the fence we sit on. Working smarter doesn’t mean working less – we think it’s about leveraging capacity to find ways to add value for clients outside of the transaction of media itself.
From a broader perspective, the industry is facing challenging business conditions; record inflation, rising interest rates, and an underlying tone of a potential recession.
Companies preparing for the potential adverse effects of these conditions and strengthening operational efficiencies, such as through automation, will be best placed to overcome these challenges. As the pandemic has proved, among the challenges lie opportunities for businesses. Those who face reality with a preparation mindset and can leverage sophistication, smarts and differentiation will be the ones to navigate success among this predictable unpredictability.
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