COVID has changed consumer behavior for good and information consumption was changed due to people being in their homes for extended periods of time. This led to the shift in behavior. Continue reading below to learn about the future of digital marketing agencies post-COVID.
It seems like a simple equation: more people spending more time online, plus businesses eager to boost their online presence as a result, equals a promising post-Covid world for digital marketing agencies. We all know life isn’t that simple though, and marketing firms will have to adapt to the realities of this new world.
Reaching More Discerning Consumers
The pandemic has permanently changed consumer behavior. With people around the world confined to their homes for long periods, 2020 saw a big shift in the way people consumed information. For example, in Q2 there was a 31.7% year-over-year rise in the number of app downloads. This represents a huge shift in people’s behavior, and it’s just a small sample of how people have embraced the online realm. The more people interact with these technologies and enjoy the experience, the more likely this tech is to become a regular part of their lives — pandemic or no pandemic.
For digital marketing agencies, this represents even more ways to reach consumers, but with a caveat. The more people become accustomed to these digital platforms, the more discerning they are likely to become to marketing messages that don’t hit the right tone. In the future, digital marketing may be able to reach more people, but the challenge will be to continue to get people to take action.
At the beginning of the pandemic, we saw click-through rates (CTRs) drop dramatically on many platforms, with the CTR for Google search ads dropping 41% year-over-year versus Q1 2019. If these trends continue and people become more immune to online marketing, agencies will have to continue to innovate and invest in quality to drive success. Whether that’s investing in top-tier copywriters and graphic designers or taking advantage of tech innovations that prioritize user experience, agencies will need to pull out all the stops to ensure their marketing efforts are successful in a post-Covid world. With more consumers online than ever before, agencies can’t afford to slack.
Conveying ROI More Effectively
The U.S. GDP decreased by 9.5% in Q2 2020 alone. This represents millions of businesses that had their worlds turned upside down because of the pandemic. Even for businesses that achieved success throughout the lockdowns, this kind of economic turmoil leaves a lasting imprint. While the consumer shift toward online behaviors clearly represents a great opportunity for businesses, clients are still likely to be very protective about their marketing budgets. How digital marketing agencies convey the potential ROI of their services will be crucial.
It’s not just going to be about what your services are, but how your services solve your clients’ problems and show tangible results. Saying you’re a HubSpot expert is one thing, but clients want to know in detail how that leads to a return on their investment and how it will make a difference to their business. Demonstrating the value of your services through accurate insights will be key in a world where budgets are closely scrutinized.
Agility As a Key Competitive Advantage
During the pandemic, the world had to learn to work from home. The interesting part was, many businesses actually found they were quite successful at it. In fact, many of the world’s biggest brands vowed to make work from home the new normal. In general, digital marketing agencies were well-prepared for this shift, but there were still some interesting trends. In the early weeks and months of Covid, the industry took a small hit, but one study found that 80% of agencies that saw a 30+% increase in their revenues were outsourcing.
These agencies realized they could do away with expensive offices and utilize the freelance economy to provide exceptional work for clients as needed. Technology has made this a seamless process, allowing agencies to get highly specialist work done without having to maintain full-time employees. This enables digital marketing agencies to be much more agile, saving on fixed costs and scaling quickly to meet the demands of their clients. Without the pandemic, many agencies may not have made this shift.
Brand Positioning in an Increasingly Competitive Market
There has been a decades-long trend of more and more businesses recognizing the importance of an online presence. However, even for those who refused to embrace the online realm, the pandemic put things into stark perspective. Businesses were left scrambling to boost their online presence, and digital marketing agencies benefited greatly from this. On the other side of things, where there is ample opportunity, there’s generally lots of competition, and this is true in digital marketing. There are 5,585 digital advertising agencies in the U.S. in 2021, up 13.1% from 2020. The competition is only likely to get greater as businesses continue to recognize the power of online marketing.
One advantage established digital marketing agencies have over newcomers is the strength of their brand. As marketers, we’re always impressing upon our clients the power of good branding, but we need to make sure we’re following our own advice. Digital marketing will likely become a more crowded space, but brands that can position themselves as strategic partners, rather than just another service provider, will have an advantage.
Covid might not completely change the future of digital marketing agencies, but it has supercharged existing trends. Marketing agencies have been successful at adapting to these changes during the pandemic, but they need to continue to do so after it’s gone.
Understanding that both consumers and your clients have changed their behaviors, and catering your services accordingly will be essential. There may be a greater demand for digital marketing going forward, but this will be balanced out by greater competition. To stand out, you will have to develop a strong brand and invest in flexibility that works for your clients and your business. The post-Covid world is bright for digital marketing agencies, but as ever, only for those that are able to adapt accordingly.