The Kite Factory

We're an independent media agency that creates high flying ideas that deliver.

London, United Kingdom
Founded: 2001
Staff: 70
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Performance Media Agency
Performance Marketing
media agency
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Comic Relief
David Lloyd Clubs
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Royal Mail
WaterAid
Lovehoney
TM Lewin
Residently
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Independents: The heroes of advertising in 2020

by Emily Underhill

5 August 2020 16:54pm

COVID-19 has upended the market entirely with ad-spend forecasts becoming near impossible to determine. Coupled with the ever-changing government advice, several sectors are inevitably finding it increasingly difficult to plan for the short, medium and long term.

The figures are sobering: Q2 ad investment fell anywhere between 40-70% YoY depending on media channel and Q3 is forecasted to be anywhere between 20-25%+ down. The deterioration of advertising trade is likely to continue into Q4 and beyond as uncertainty and on-going changes to government restrictions make it near impossible for businesses to make key decisions. The aftershocks are expected to last into early 2021 at the very least.

With the market in unprecedented territory it has been interesting to see how agencies have been reacting and dealing with the unfolding situation both from an internal and client management perspective. I firmly believe that whilst the experience has been humbling for us all, it’s also gone a long way to showcase the strengths of being partnered with an independent agency now more than ever.

An independent’s capacity to be agile, reactive, and the masters of our futures has meant that The Kite Factory has been able to react quicker than most, making decisions without red tape and putting measures in place to not only safeguard the business but also our people by ensuring any furloughs were limited. A starkly different picture is apparent when looking into how the networks have handled such situations, with group-wide decisions that have directly impacted their agencies.

Critically, our ambition was to ensure any actions taken were constrained and did not impact the day to day operational capacity of our business teams. This has meant we have been far better placed than many to react to the crisis, support our partners and clients alike with bespoke strategies to both weather the storm and navigate out of it. Importantly, we have been able to successfully maintain the levels of service our clients have become accustomed to throughout a period when they have needed us more than ever before.

I felt like a proud father watching as our investment team worked relentlessly to put measures in place, ensuring any campaign cancellations and or deferrals were managed penalty free, as well as significant over deliveries written off across the board between March and June which effectively drove an additional 20-30%+ of free added media value on behalf of our clients.

Furthermore, with suppliers in a desperate drive to stabilise revenue as the ad market disintegrated, pricing has been squeezed to record levels, where in most cases there is now effectively a zero gap between networks and indies.

With the drive to generate revenue, we have also seen network agencies offering many of the trading benefits you can expect to receive as standard when being partnered with an independent. The likes of tailored station delivery, late and flexible booking deadlines, additional creative support, increased in month optimisation capacity etc.

This is important and clients must remain conscious of not becoming accustomed to having such benefits in the foreseeable future. Suppliers are not setup logistically to service networks in this manner long-term, and as we move into Q4 and early 2021, and with any luck the world returns to some sense of normality, many of these benefits and flexible booking conditions will be stripped away from the networks once again.

At that point clients will have to ask themselves a simple question. With weakened teams, market average pricing and limited flexibility, is a network agency still the best placed partner to service my business needs?

By Jonathan Leech, Commercial Director

Tags

independent agencies
COVID-19
Media Agency Group
The Kite Factory