9 Creative Agency Challenges to Face

Agencies are facing more challenges as the creative agency industry constantly evolves and new technologies emerge, together with changes in clients’ demands and expectations. Finding and retaining clients, making your agency stand out, keep your creative team motivated while being profitable are a few difficulties that agency owners might encounter. 

However, there’re solutions to tackle these problems and open opportunities for you to grow. Let’s take a look at the most common challenges of agencies and the approaches to overcome them.

Challenge 1: Staying Relevant

Having that ‘edge’ or ‘cool’ factor as a creative studio, can be an advertising agency challenge. While it is important to keep an eye on current and emerging trends, it doesn’t always pay to follow them, as you risk being the same as everyone else. After all, it is much more rewarding being admired for setting the precedent and being a trend setter, rather than a follower. But never take your eyes off the competition.

Keeping this in mind, it is not always an easy ask to stay at the forefront, consistently producing high calibre creative projects and brand icons. It takes tactful planning, research and often risk taking, to differentiate your studio from and ever growing landscape of creative entities.

Staying relevant also has a lot to do with keeping tabs on technologies, social media, news and current events, and above all, listening to the world around you and acting accordingly. Always strive to ‘skate where the puck is going to be, not where it currently is’. This is how you will most likely have the competition chase your taillights.

Challenge 2: Unbridled Creativity

Being creative is a great talent. But every once in a while, a drought comes in, stopping those creative juices from flowing, and you may as well be in the Sahara!

Creatives, and studio staff need a lot of stimulation and the freedom to explore ideas, problem solving along the way. After all, much of design involves a varying degree of problem solving.

Creativity can be cultivated through stimulation. And keeping staff stimulated can sometimes pose a challenge faced by advertising agencies. Mixing things up and varying tasks, sending staff to galleries, networking events, industry relevant functions, can often provide a much needed injection to the creative thinking process.
Even just having music playing in the studio (a cross selection of genres), can act as a catalyst to get those clicks going in Photoshop.

Having a fun in a relaxed workplace, plays an important role in keeping your staff motivated to continue producing innovative ideas. Keep in mind that while it is important to have organizational systems processes in place, be careful that they don’t start choking the company culture. Systems and processes are essential to keep the crusade going, but they should not replace the crusade.

Challenge 3: Collaboration

Effective collaboration is essential for any business to thrive. Communication between both internal and external stakeholders, will determine how successful your team will be in delivering quality creative projects – on time and within budget.

Although collaboration often involves a series of emails, phone calls or face-to-face meetings, it is worth noting that there are other alternative means of collaborating with the team and clients. For example, using a piece of creative agency software that allows you to create and share notes, upload proofs or digital assets, along with things such as client portals, are great ways to share ideas, job and project statuses and keeping a pulse on items.

Things such as ‘office chat’ applications e.g., Slack, Skype etc., can be very handy, allowing for quick communication, file sharing privacy when needed.

Challenge 4: Growing Pains

While its important to stay in the present with an eagle eye focus on projects and jobs, budgets, profitability and staff efficiency, one must also plan ahead and look towards future expansion. More clients, more staff, more jobs = more profit.

Having a series of business goals or objectives, both short term long term, will serve as a blueprint as to where you want your creative agency to be, 6 months down the track or 3 years from now.

Revisiting the company’s vision core values, no matter what size your agency may be, will help you to maintain focus, and thus yield innovation, added revenue and new faces to the team.

Performance reviews and succession planing are key to nurturing your team and moving onto new challenges. Equally important is having solid organizational systems and processes in place, promoting a healthy company culture that balances professional, as well as personal growth.

Challenge 5: Improving Management Processes

Many advertising and creative agencies are strong in the creative aspects, but not so good in organizing their workflows and processes. However, this will lead to multiple problems in project management, such as: 

• Inefficient resource distribution for projects running simultaneously
• Job screep if not setting clear goals and expectations with clients
• Setting unrealistic deadlines
• Inadequate project estimates

All these problems can be solved by standardizing your internal processes and systems. This will ensure all tasks follow a smooth flow, from onboarding clients, to assigning tasks to team members, and reviewing and approving the work, and prevent overwhelming deadlines and overworked employees.

You should document your process to remove confusion and gets everyone understand their responsibilities. This is a collaborative effort, so you must gain team buy-in to follow your procedures by showing the benefits of your working methodology.

Use a project management tool that works for your agency to automate your processes and enjoy increased efficiency. When choosing this software, look for these features:

• Customized and detailed dashboards
• Ability to integrate with other apps, like Quickbooks for finance
• View member’s workload and easily assign tasks with custom deadlines
• Monitor the entire project schedule and progress
• Automated approval routing
• Pre-built forms and templates
• Communication tool with internal team and clients for feedback 

Challenge 6: Retaining Talents

Another common challenge that agencies face is retaining high-quality people. While you can attract and hire top-notched digital marketers, keeping them is another story. All too often, agency creatives report burnout as a major factor causing them to leave an agency. This may come from extensive working over hours, and taking responsibilities beyond their job description. 

The turnover rate of agencies is significantly high. To retain the talent in your creative team, you need to evaluate the workload of each team member, care about their mental health, promote a positive working environment, offer competitive incentives, and give team members a sense of ownership to enhance autonomy and creativity.

It’s essential to assign the proper amount of tasks to each person and avoid unrealistic promises. Allocate resources correctly to prevent burnout, and allow employees to see co-workers’ available time in a simple way. You can do this via Gantt Chart features of Function Point’s project management system, which visualize all information for you to easily monitor.

Challenge 7: Generating New Business

While you can handle a small agency, scaling up your business comes with a new set of challenges. Most of the time, acquiring new clients is one of the most prevailing digital agency challenges, as the agency sales cycle can be lengthy with fierce competition. However, if you take the right approach, you can attract more leads and convert them into customers. Here’re some ideas to improve your agency’s new client pipeline and enhance your chance of winning new business:

• Create effective communication channels with clients
• Provide relevant and valuable content to showcase your agency expertise and how you can help new clients solve their pain points
• Display testimonials and a track record of delivering exceptional results for previous clients
• Provide ongoing training for your team to make sure they can build trust and credibility with potential clients. 
• Develop a strong online presence via a website and social media platforms
• Explore networks and build strategic partnerships within your industry communities
• Participate in industry events and conferences as a speaker to connect with potential clients and introduce your agency.

Challenge 8: Operation Visibility

Making informed decisions can be a challenge facing advertising agencies if they lack data. It’s crucial to have a holistic view of your agency’s operation to optimize your performance, save costs, and improve efficiency.

To be on top of your operation, invest in an all-in-one agency management system to synchronize data across channels and provide you with meaningful insights. You should be able to check the life value of a client, project profitability, time spent on a project, planned and actual budget, and employee productivity with a few clicks.

With the right software, you can reap benefits to control the 360-degree view of your agency and make improvements: 

• Analyze which project types are bringing the most profit, and which ones are holding you back
• Assess your creatives’ performance, and provide proper training to help them improve their skills
• Better forecast project workload and estimates 
• Identify if your processes have bottlenecks and find ways to streamline them

Challenge 9: Client Retention

Client retention is a popular challenge of digital agency. While the cost of client acquisition is becoming higher, many clients only come for one-time projects. To encourage them to stay or refer you to other business deals, you must strengthen customer relationships with clear and transparent communication. 

A simple solution for this issue is automation. Most clients will be comfortable when an agency can show them the project progress and the amount of agency work in a straightforward manner. This way, they understand the agency resources involved to handle this project, and thus aiding in discussing a reasonable fee. 

As an agency, you can invite clients to join a shared platform with real-time data of billable hours and the ability to give feedback easily. Including the client in the project lifecycle can benefit both parties. While the clients can understand what builds their invoice, agencies can display their progress without the need to depend on deliverables or reports. This transparency lets you reduce the burden of reworks and make your client-agency relationship flourish.

In addition, you can go for retainers to ensure a steady stream of revenue from a client. For one-time projects, try to selectively go after big project values with suitable scope of work for your expertise. Read more on how to structure your agency.

To Wrap Up

Different agencies will have a unique set of problems. Make sure you recognize and understand the common agency challenges. This is the first step to optimize your agency’s performance and profitability.