At this point, we are well aware that recessions spare no one. The tech industry in particular took a beating post-pandemic and the world stood witness to a domino effect of layoffs swallowing major tech players and companies.
According to Digiday, with the foresight of a recession in 2023, the ad industry made shifts in its budgets to increase efficiency. However, this begs the question, how long can the ad industry protect itself before being inevitably hit by a recession if and when it is declared? Is it then possible for the industry to be recession proof particularly with an AI wave coming in fast and strong?
DNA Creative Communications’ CEO, Ashvin Anamalai posited that there is no surefire way to stay employed during tough times, but it is imperative to maintain a strong work ethic, whether in a pandemic or a recession.
“It is an everyday thing; it means being reliable, proactive, positive, and a team player. It means showing up to work on time and ready to work hard. It means taking initiative and looking for ways to improve your work. It means staying upbeat and motivated, even when things are tough,” he said, noting that with AI, the potential to get replaced is high.
However, Anamalai noted that in this day and age, while it may be more cost-efficient to replace employees with automated tools, even more during times of financial struggle, to him, strong human qualities are of the essence of being recession-proof.
Despite the rise of AI in the industry, recession-proofing requires a focus on building strong customer relationships, delivering exceptional personalised experiences, and nurturing loyalty over time.
Agreeing with Anamalai was Andy Chan, managing partner, Duian Hong Kong, who said understanding consumers' passion points and bridging with clients' DNA are key. "The ability to create consumer-centric resonance is essential as we have to build a solid companionship between brand and customer to answer a simple question: 'Why I have to choose you during this hard time?'," he added.
Furthermore, the ability to adapt quickly to those fast-changing situations and environments is crucial during a recession. "More flexibility in the dedicated work approach with your clients, learning more new skills (eg AI) for your clients, and driving change in a proactive way when opportunities arise all enhance your competitive power to be recession proof," Chan added.
Human-centric connections take work but they have a larger pay off, a sentiment that The Clan’s chief creative officer, Casey Loh greatly agrees with. Loh believes that in the ad industry, the ability to think deeply for a client, truly understanding their challenges, and using that knowledge to tackle briefs will be critical to not only for the client but for the agency too.
Saying that, Loh added that in this day and age, the only way to gear up is to retain an agency’s culture and identity.
“While some jobs may be at risk, clients will still need the aid of agencies to do more than just tackle deliverables. Internal teams can help reduce cost but not expand on a viewpoint of a creative brief,” he believes.
At the end of the day, while taking note of the changing landscape is key, it is also important to manage expectations, according to Jude Foo, general manager and partner at Nine:TwentyEight. Foo noted that marketing as a function is typically a cost centre as opposed to a direct revenue generator. "That means that marketing is beholden to other departments making decisions when cost-cutting measures are taken. So, on an individual level, it’s hard to be recession-proof," he said.
He added that it is hard to quantify or qualify what roles or skills will be needed more in a recession. "At the end of the day, it comes down to the requirements of the agency. I have witnessed agencies folding entire departments to streamline, and I’ve also seen agencies indiscriminately cut people based on their higher salaries vs someone in a similar role with a lower salary," he explained. He went on to point out that one necessary skill that could deem useful, is maintaining an amicable relationship with the company's HR.
Agreeing with him, Keso Kendall, the vice president of TEAM LEWIS APAC noted that while it is impossible to completely ringfence a business from external impacts, one can certainly plan and anticipate which elements of the business are more likely to be impacted.
For example, an audit of clients to assess financial performance, share price trends, leadership changes etc. can all provide good insight into how impacted they have been or are likely to be. This can then guide on likely risks that agencies might face.
She added that a keen business sense and the ability to interpret financial trends will also come in handy when faced with a recession. "There will be pinch points, but they won't last forever," she said.
In fact, no one is completely recession-proof in any given situation. Being prepared and staying agile can make all the difference, said Au Wai Chung, managing director of media at Dentsu HK. "Adland players must understand their unique value and remain focused on identifying the right opportunities. In fact, as noted in our December 2022 edition of the dentsu Global Ad Spend Forecast, every economic downturn also saw great innovations," he added.
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