Improving Digital Agency Profitability Amid Delays And Slowdowns
Jason and Bart discuss how they have made it through the first month of 2023, and how the year has started off for agency owners. They talk about how some of the delays were predictable but some were not. They then discuss a client of theirs that has a market cap of a few hundred billion dollars and how they pulled back a contract for less than $10,000 a month of spend. This led to a conversation where they concluded that they should reach out to the CFO more often to have conversations.
The conversation discussed how CFOs are an important part of IT procurement and how strategies should be directed towards them due to the lack of discretionary spending. The speakers agreed that pipelines for closing deals have become more difficult due to people being skittish about taking risks. To prove the value of technology solutions, it is necessary to prove the value across the leadership landscape in a way that it was not before when it was just a matter of investing in digitization. The conversation concluded with the speakers discussing how they have been building solutions for clients for the last few years, even through the pandemic.
The conversation centered around digital transformation, and how C suites are taking a more intentional approach to their tech spending. Budgets are still there, but there is less leverage for digital agencies and value based pricing is taking a backseat to proving ROI. There is a reduction in tech staff, but the percentage of those let go compared to those hired is minimal. The takeaway is that investment in digital transformation is here to stay, as the people being let go are not in the AI and metaverse departments.
This conversation between two people discusses the layoffs of marketing and HR employees from large companies such as FedEx. They argue that engineers are also being laid off, but that the most experienced engineers are not being fired. The conversation then shifts to the digital agency space, and the two agree that there have not been as many layoffs in that space yet. They then move to discuss the CEO of Rivian, who is the second highest paid CEO in the world, and the other top earners including Elon Musk and Tim Cook. The conversation ends with the observation that Tim Cook still deserves his salary because he is good at his job.
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