With businesses across the world in all sectors feeling the impact of the economic changes and consumer spending due to the Coronavirus pandemic, a new study has found more than 200 small and large UK agencies have experienced a drop of revenue by a third (33%) on average due to the COVID-19 impact.
The findings come from a new study unveiled by development and design resource platform Deazy, whose team had witnessed ‘first hand’ the ‘pain’ that many of their agency clients were facing.
Over 200 respondents were asked around 20 questions which covered everything from revenue and headcount impact to many of the solutions they have relied upon to stabilise their business in the ‘new world’.
Smaller agencies adapted better to remote working
With one of the key transitions of working from home, the survey found that smaller agencies were quick to adapt to the change than larger agencies. According to the study, 73% of smaller agencies found it relatively easy to move to home working with a further 53% stating the transition as hassle-free.
When it comes to remote working as a whole, 75% said they would extend it as an option to employees in the long-term as things continue to develop around the world with global pandemic and various lockdown measures in place.
Budget squeeze and omnichannel impact
Marketing and advertising have been just some of the sectors where budgets have been squeezed. Ultimately, this has left a significant impact on agency revenues with respondents overall experiencing a 10%-30% drop on average.
Unsurprisingly, paid channels have been the worst affected with PPC (49%) and Display (37%) experiencing drops in budget while SEO has proved to be the most resilient channel at the moment with only a 23% squeeze.
Another impact for agencies during this time has been the headcount and supporting employees. Of those surveyed, only 22% admitted to using the furlough scheme or opted to make redundancies as a result of the downturn.
Furthermore, 56% surveyed said they continued the increase of freelancers and contracted staff compared to 44% which cut down on freelancers during the period.
“The findings are truly insightful,” said Deazy founder Andy Peddar went on; “If I was an agency owner I’d find it incredibly helpful to have the views of more than 200 of my fellow senior agency professionals at my fingertips as a guide through this ongoing challenge,” he added.
“One thing we have learned throughout this process, however, is that the UK’s agencies are in great hands and there is little doubt that endurance, that rarest of traits, is found in abundance across this fantastic industry of ours,” Peddar concluded.