2022 Predictions for Agencies

7-Jan 2022
1517487487102
Stephani Fitzsimmons SENIOR CONTENT MANAGER

Forrester’s predictions for agencies in 2022 foretell another year of adaptation to the powerful forces reshaping the agency environment and agencies themselves. However, the year looks bright for those astute agencies who can master all of the difficulties ahead. Media agencies Magna Global and GroupM predict nearly 10% growth in 2022, with digital leading the way.

Changes caused by the digital disruption that began intensifying in 2020 are still with us. Digital innovation and adaptation have reached the critical point where human creativity will be the deciding factor driving increased productivity and profitability.

The talent shortage caused by the great resignation, the gig economy and layoffs mean agencies need 50,000 creatives who aren’t there. And existing employees want a different compensation package. At the same time, consumers are demanding a seamless digital experience, sustainability and social commitment. 

Technology Investments Bring Mixed Results

Even though 70% of marketers will have an always-on 24/7 digital engagement in 2022, 75% of B2B companies will see their technology investments fail to reach their target return on investment (ROI) because buyers will not realize the insights marketers are attempting to communicate.

In 2022, marketing technology budget share will increase from 19% to 25% as the ability of companies to demonstrate competency during the buying process will become a far more important sales generator than sales rep relationships or referrals. A client work management platform like Accelo can validate your capabilities and easily showcase your aptitude. 

As tech stacks increase in complexity, customer-centricity, and personalization, providing multiple, clear paths to purchase will become increasingly important. So will keeping tight track of all customers and communications. Human creativity combined with effective tools will be crucial in leveraging the right technologies while creatives are in short supply.

The Digital Transformation Becomes Human Centric

Compared to 2021, in 2022, one-third fewer purchase influencers will say digital transformation is the key to business change. Instead, the ability of employees to creatively use automation and prediction engines focused on outcomes will become paramount in marketing success.

Although not yet widely embraced by consumers, AI adoption will proliferate as businesses realize the need to move away from cookie tracking. Tech expenditures will increase to enable smaller teams to do more as they’re forced to creatively provide immersive customer experiences.

Customer experience and employee experience will be interlocked, bringing a competitive advantage and a 3% to 5% increase in productivity. Accelo gives you a single platform for both employees and clients to access and engage, tracking all communications and client work. 

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Greater Involvement in Client Business

Forrester’s research found that 75% of in-house marketing departments expanded during the pandemic. And Forrester’s August 2021 CMO Pulse Survey said 44% of chief marketing officers stated that they would increase their in-house teams further.

To cope with this trend, agencies reinvent themselves as consultants, becoming more involved in clients’ business operations. An example of this is Olgivy - Andy Main has recast the agency to focus more on consulting. This pivot allowed the company to scale and adapt as new opportunities emerged, continuing to stay in demand. 

Agencies in 2022 will produce multi-dimensional customer experiences. The CMOs of tomorrow are interested in intelligent creativity - matching media and data expertise with creative skills. The pairing of data analytics and creativity is essential to carve out unique value-adds. Companies will shift away from relying on cookies and into private data collection and analysis.

“This makes agencies’ work less of a commodity and gives them a lifeline into the fee-for-services model,” said Jay Pattisall, a Forrester analyst. As compensation models change, consider simple methods to shift your billing. Accelo, for example, lets you easily set custom pricing. 

Leaner Teams and New Compensation Models

The talent shortage is forcing agencies to do more with fewer team members. Agencies can alleviate the deficit by using a client work management platform to replace administrative and junior staff and then invest talent budgets in qualified leadership.

That being said, senior staff is more challenging to replace, and Forrester sees an upcoming leadership crisis on the horizon that may impair agencies industry-wide. This is going to make client management tools along with built-in communication and activity tracking all the more valuable to lessen the burden. 

Compensation models will also change as team composition shifts toward including more creatives who understand data. Brands have discovered that human creativity is necessary for brand differentiation that avoids the sameness generated by data-driven strategies. The industry has yet to work out an appropriate compensation method for people creatively working in what’s now a human plus technology field.

Clients Fight to Retain Individuality

2021 saw a rapid increase in online marketplaces, with both established and emerging retailers looking to boost revenue and develop the customer experience. Marketplaces can increase sales volume, but they are also great levelers. Businesses must differentiate by building direct relationships and providing immersive brand experiences. The era of non-stop consumption will become the norm as agencies leverage:

  • Websites
  • Paid media
  • Social media
  • Marketplaces

Every touch will become engageable and shoppable, creating endless opportunities. You’ll see more interactive ads allowing in-ad purchases. Multi-touch attribution models will be seen as superior to first and last touch attribution because they allow for the reality that consumers make buying decisions after multiple touches. Agencies will need to develop their knowledge on multichannel, multitouch points. This learning curve might be steep for some teams, even further supporting the need to have the right agency resources in place. 

Social Responsibility Demands Action in 2022

Companies will take more direct actions on environmental, social, governance (ESG), and accessibility issues in 2022. Consumers expect reliable brands to take the lead because they are more trusted than governments in North America, the UK, and India.

Adults are increasing the use of their buying power to support brands that align with their social values. In the U.S., the percentage of buyers making this choice rose from 40% in 2020 to 48% in 2021 and is expected to top 50% in 2022.

Corporations are responding. Globally, 70% of companies said that commitments remained the same or increased to issues like diversity and inclusion, healthy lifestyles, culture and arts, human rights, and the future of work.

Patagonia, the leading outdoor gear manufacturer, refuses co-branding ventures with companies that fail to match their social commitment. Major League Baseball moved the All-Star Game out of Atlanta when Georgia enacted the Election Integrity Act.

A growing number of digital accessibility lawsuits and the increasing number of companies making top-down commitments to accessibility are forcing everyone to get on board. Customer experience teams will increasingly focus on making digital accessibility a feature. Agency technology should be user-friendly and designed for diverse users. 

Final Thoughts — Success for the Brave

Agencies in 2022 must boldly forge a new path as agency roles shift toward more involvement in client businesses while wholly embracing new technologies and making do with leaner teams. 

Success will demand bravely using human creativity, smart tech investment, and a better understanding of consumers and their behavior to drive the changes agencies must make to keep from lagging. Only a small percentage of businesses will successfully use their future knowledge to address urgent issues swiftly and leap out ahead of competitors. 

Ready to discuss these predictions further? Visit Accelo's LinkedIn to share your thoughts and industry insights for 2022.

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