2023: The struggle is real

While plenty of agencies are having a good year, the more common refrain I hear from other agency leaders is that 2023 so far has been pretty ‘meh.’ 

Both in terms of organic growth and, of course, new business activity. The number of opportunities are down, the size of the prize is generally lower, and the nature of those engagements has shifted to fewer AORs and more projects. 

As an agency leader on the hook for growth, I’ve experienced that same struggle firsthand. It’s got me thinking about some important lessons that have always been true in this business, even in the boom times. But there’s something about a down year that makes them stand out in sharp relief. 

2023 has underscored three themes that are helping frame my approach to business for the rest of this year, and the next.

1. The right to win

We all know pitching is really friggin’ hard. It’s labor intensive and stretches agency teams to their limits as they try to balance a pitch with current clients. 

And this year’s 4As/ANA report shows the staggering cost of it all—ranging from $200,000 for non-incumbents to over $400,000 for incumbents. Forrester estimates agencies burn 17% of their revenue to cover non-billable time spent pitching. To go through all of that time, effort and expense only to come up short, is just brutal. We’ve all been there, and it’s devastating to morale. 

Now more than ever, it’s critical to think long and hard about what you pursue and what you pass on. And you should be passing on a lot—especially pitches where you don’t have a ‘right to win.’ By that, I mean you’ve got three or more awesome case studies in that same industry, where you’ve uniquely solved the very problem the client is faced with.

There are times I find myself salivating over an RFP and I think ‘Man, now that’s a client I’d love for us to have.’ But years like this bring me back to my senses. Do we have those case studies with high-impact results? Is the work truly remarkable, or is it merely in-category? If we don’t have those things, we probably don’t have a ‘right to win.’ 

Pursuing an RFP based on magical thinking, which I admittedly engage in, is a fool’s errand, as we’re likely to get crushed. There are always times to take a calculated risk and go for it, but this year has reminded me of the value of knowing when it’s time to stand down and wait for the next one.

2. Obliterate risk

In any other year, if one of your accounts goes into review, there’s a nine in 10 chance it’s headed out the door. But in 2023, up is down, black is white and I’ve had several prospects tell us we were perfect, yet they’ve decided to stay put with their agency. 

I’ve also been lucky enough to get that call that we beat the odds and a client has decided to keep on truckin’ with us. There’s just a heightened aversion to risk this year. Clients aren’t going to hire an agency they hope or think can do it—they’re going with the one they know can do it, because they’ve done it three or four times before. 

And while clients are always risk-averse, there’s zero tolerance for anything that might upset the flow of the business this year—even the time it takes to ramp up a new agency partner. 

Changing agencies is a huge organizational decision involving many potential risks. But when I think back to more typical growth years, I’m embarrassed by how little time and space I’ve devoted to acknowledging that risk at the outset—and then using our pitch narrative to systematically dismantle it. Obliterate it. Eradicate it. That’s job No. 1, in any type of economic condition, but I’m attuned to it like never before.

The delusional optimist in me, and every advertising person, I suppose, says “If we can just get into the room with these folks, build some chemistry and rapport and show off these brilliant ideas—they’ll fire their agency and hire us.” 

But the fact is, they’re only going to hire us if we tell a powerful story that proves the biggest risk they can take is to not hire us.

3. Make your own luck

In a down year when clients are averse to risk-taking, there are fewer opportunities to take big creative swings. That’s where I think being a small, independent agency can come in handy. We often make our own luck. We have to. 

Small indies find creative opportunities in whatever is in front of them, regardless of the client, category or budget. They see the promise and virtue in assignments that larger agencies can’t or won’t because they’re so tethered to timesheets and P&Ls.

This feels like one of those years for agencies to make their own luck creatively. Do it first and foremost for your current clients, or for a deserving cause or non-profit in your community, or for a client of your own creation. Many agencies have them—there’s Baldwin&’s work for Ponysaurus beer; Callen’s Bijan Mustardson and Eos lip balm came out of Anomaly. We’ve launched a few of our own over the years, too.

The first three quarters of this year have been somewhere between a head-scratcher and a dumpster fire—but the rest of it doesn’t have to be. 

If agencies stay focused on the spaces where we have a right to win; empathize with the unique pressures our clients are facing and eradicate risk; and capitalize on this moment and create our own luck, then there’s hope for 2023—and a brighter 2024 yet.

Jeff Graham is president and chief marketing officer of Cactus.