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Has 2023 been a bumpy ride for your agency? Like you’re swimming upstream with one arm tied behind your back and a crocodile snapping at your heels?
Whatever your experience has been this year, it’s sure to have been a disruptive one. From the ongoing economic and geo-political uncertainty, to shifting client and consumer behavior, to rapid technological change, the agency landscape is more complex and competitive than ever.
Our State of Agency Operations Report shines a spotlight on the biggest challenges facing agencies right now. To help you navigate these issues and get a head start next year, we’ve compiled our top agency predictions for 2024 based on the research. In this blog we’ll walk you through each one and share tips and resources on how to win in this new landscape.
1) AI will become increasingly embedded in day-to-day operations
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It would be an understatement to say that AI has been a hot topic in 2023. Thanks to the rapid emergence of generative AI tools like Chat GPT, it’s been the talk of the town in the agency space and in the business world more broadly.
The subject of AI continues to polarize opinions. Vocal critics like Elon Musk have predicted that the technology will threaten society and human existence itself, while others have put forward a case for AI to positively transform the way we work and live.
Similarly, our own research highlights mixed attitudes towards the rise of AI in agency life. Half of agency leaders see it as an essential tool for innovating and streamlining processes, while the rest are using it on a case-by-case basis or not at all.
With client budgets continuing to stretch in 2024, we predict that AI will become increasingly embedded across several areas of agency operations over the next 12 months. This will be driven by client demand for low-cost and humanizing AI content and pressure on agencies to find new revenue streams in an increasingly competitive landscape.
Pro tip:
Regardless of where you sit on the debate around AI, the technology is here to stay. If you’re not embracing it now, you could risk falling behind the competition. But according to Susan Fennema, CEO of Beyond the Chaos, adopting it doesn’t have to mean “dehumanizing” your business. Instead, “it should be used to improve productivity, speed things up, make repetitive tasks simpler, and make data-driven work more manageable.”
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2) Agencies will continue to consolidate their tech stacks
In the aftermath of the Covid-19 pandemic, agencies have faced extraordinary challenges and disruption. From shifting client and consumer behavior, to new ways of working in a remote or hybrid world, leaders have had to rapidly pivot their operations to cater to the needs of today’s customers and workforce.
During these unprecedented times, agencies have often adopted a “grow at all costs” mentality, leading to fragmented and disjointed tech stacks. A whopping 59% of agencies we surveyed have between 4-15 tools overall, and one in three have a strong desire to reduce the size of their tech stacks next year.
As agencies seek to slash costs and streamline processes further, we predict that the consolidation of software tools will be a big focus for leaders over the coming months. From simplifying operations, to lowering training and onboarding costs, agencies will be evaluating what’s working, what’s not, and where efficiencies can be made.
Pro tip:
If you’re interested in reducing your tech stack size too, consider adopting a more consolidated project management solution with integrated resource management, time-tracking and reporting so more of your needs are met in one platform. As well as saving your precious time and money, it could also lead to better staff engagement and boost client satisfaction.
3) There will be even more investment in people and culture
When we asked 40 agency leaders about their experience with burnout in another survey earlier this year, we were shocked at how painfully it is being felt across all sectors and job roles in the industry. Our research adds another layer of insight, with 70% of respondents confirming they feel burned out and nearly half (46%) working more than 40 hours weekly. Worse still, nearly nine out of every 10 agency owners (85%) believe burnout will get worse as a result of the current economic climate.
When you combine this with the fact that a quarter (26%) of agencies lost more than 10% of their staff in H1 last year, you won’t be surprised to learn about our next prediction: building a better workplace culture will be central to every agency’s success in 2024.
But when we talk about “culture,” we’re not talking about wacky office decor, getting an extra day’s PTO for your birthday, or Pizza Fridays (even if we all love Pizza). We’re talking about a much more holistic approach that involves investing in and nurturing talent over the long term.
Pro tip:
There are countless strategies and tactics out there for building a more cohesive and prosperous culture. To help you get on the right path, here is a summary of some of the tips leaders have shared with us:
Take the time to know each employee and what they care about, and make sure they have the space to develop their own career interests alongside the needs of the business.
Offer services that people can speak to outside of your HR department, such as coaching and counseling.
Keep a keen eye on team capacity to make sure no one is being over or under utilized. Both of these scenarios can have a negative impact on morale.
Automate admin tasks to take the pressure off employees and give them more space to work on things they love.
Provide employees with 100% clarity at every opportunity and job level – be it their job duties, performance, daily tasks or the week’s priorities. Confusion always leads to stress.
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4) Having a dedicated operations lead will become essential
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To COO or not to COO? That is the question.
Well, according to our research, the answer is a resounding "yes." Over half (51%) of agencies currently have an in-house operations lead, and just 11% don't have plans to hire one in the future.
As agencies continue to invest in new tools to optimize client delivery internal processes, we predict that even more agencies will create roles for internal operations experts or get external help to manage and maintain their operations frameworks.
Pro tip:
For any agency, having a dedicated operational "go-to" role can make a world of difference in ensuring time tracking, resource forecasting, and project planning go off without a hitch or becoming a nightmare for agency teams and their clients. If you're an agency leader, hiring a number two can enable you to delegate some responsibilities so you can focus on other areas like new business.
5) A more profitable year lies ahead in 2024
Despite the many challenges agencies have faced in 2023 — client and employee turnover; difficulty keeping projects on budget and schedule; and operational inefficiencies, the future looks promising. Nearly two in three agency leaders anticipate their agencies will be more profitable in 2024.
Agency owners have always been a resilient bunch, and with a few minor adjustments, we believe agencies can turn the corner on their operations and set themselves up for a successful year ahead.
Ready to master your agency operations in 2024? Access the full research report now
If 2023 has taught us anything, it’s that nothing stands still in the crazy world of agency life. Restricted client budgets, ongoing inflation, increased competition for clients and talent, and the rise of generative AI have all contributed to it being a challenging year for many agency leaders.
But with the right tools and processes in place, agencies can overcome these challenges and optimize their operations in 2024. An all-in-one platform like Teamwork.com has everything you need to maximize resources, scale your agency, and delight clients under one roof.
Other resources for agencies:
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