How agencies are faring

Back in March, Agency Management Institute partnered up with Orbit Media to do a quick poll of agency owners to find out what the initial impact of the coronavirus was on their agency.

We launched the original poll on March 25th and closed it a couple of days later. You can read the results here. We just re-released the study in the middle of June to see what has changed.

In both cases, our goal was not to conduct proper research, obviously, but instead just to take a pulse on how things are going out there. I also wanted to compare how the general population of agencies was faring in comparison to the 250 or so AMI agencies that I’ve been communicating with on a daily basis.

Let’s look at where things are today.

How has demand for your services been impacted by the coronavirus?

In March, 4% said near-total disaster, 16% said very negatively, 37% said slightly negative, 23% said neutral, 15% said slightly positive and 5% said very positively. Two months later, you can see that things have shifted in a positive direction.

Today, the worst three responses (near-total disaster, very, and slightly negative) total 50% — a drop of almost 8%. Even better, many in the neutral camp in March have now shifted to slightly or very positive.

We then asked how COVID had impacted the agencies’ projected AGI for 2020.

In March, 53% said they were expecting a 25% or greater loss, with almost 10% predicting a 75% or greater loss.

Just two months later, we’re seeing another shift toward the positive. 24.5% are reporting more AGI because of the virus and almost 30% are expecting no more than a 10% loss.

Less than 1% are now expecting a loss of 75% of their projections.

Another interesting stat at this point in the year, given the PPP funding, is how agency staff numbers have shifted.

As you can see, almost 81% of agencies have either retained their headcount or added to it. No doubt some of that is because of relief funding and agencies maintaining team members to fulfill the payroll requirements.

Like last time, when I compare these stats to the 250+ AMI agencies, I’d say most of them are doing better than the average agency out there. I believe that’s because of the emphasis we place on understanding agency math and the metrics which quickly tell you if your agency is financially healthy or not.

I hope my nagging all of you to manage your agency by the numbers means you’re doing better than most, as well. If you haven’t been managing by the numbers — it’s not too late to start. Many of you have difficult decisions to make as your PPP funds deplete.

We’ll probably re-visit this study in the fall, to continue to track if agencies can get back on pace with their original 2020 projections. But in the meantime, I am glad to see that all of the data suggests that agencies are faring better than they feared back in March and many are landing new work and keeping their current clients content.

Drew McLellan, with Agency Management Institute, produces a weekly newsletter with updates, tips, and market information of value to marketing agencies, owners, and employees. If you'd like to receive the weekly newsletter, follow this link to subscribe.

This piece was originally published in the AMI Newsletter.