Budget cuts pinch as competition steps up, says Warc's Future of Strategy 2018

Strategists are seeing their discipline in flux, with growing influence offset by cuts in client budgets and new competitors emerging, according to WARC’s Future of Strategy Report 2018, a worldwide survey of over 500 senior planners and strategists. WARC's second The Future of Strategy report provides both quantitative and qualitative data on the current state and future expectations of the industry.

Strategy’s expanding influence

“Senior clients want more strategy, perhaps to help them navigate the current marketing labyrinth, and become better marketers”, says Shekhar Deshpande, Global Planning Director & Strategy Consulting Director, J Walter Thompson.

More than half of strategists and planners expect to grow their teams over the next year. Globally, 50% of strategists believe they are gaining influence with clients and 57% believe they have more influence in the agency. However, the survey uncovers a sense among the strategic community that its skills are not always applied effectively.

“Clients spend too much time, money and effort in the wrong places,” said one European planner “— all driven by the fear of being left behind. Living in this stressed state they've forgotten how to be a good purchaser of creative services.”

Budget cuts threaten strategy’s ‘craft skills’

Diminished budgets are affecting planning and strategy around the world, with a majority of respondents reporting the impact of client-side budget cuts on their teams. Smaller budgets have largely led to a smaller scope for strategic work. Such decisions, one US planner told Warc, are “driven by short-term/tactical thinking, often driven by budgets, without considering long term implications of actions.”

For the individual planner, this has led to a change in their role. “Fewer and fewer planners spend much time in the real world, preferring to observe it from the comfort of a research report and Google search”, noted Rob Campbell, Chief Strategy Officer, Deutsch.

More than two thirds of respondents globally agreed that the ‘craft skills’ of strategy are under threat. One respondent reflected that, “We now rely on charisma to be influential where once our craft skills were valued highly.”

New competition in the strategy market

Marketing strategy now has many more vendors than just agencies: consultancies, clients’ in-house teams, tech and media firms are all involved. While this represents a threat to agency planning, individual planners are seeing greater opportunities emerge.

“Consultancies are not our biggest competition – in-house client teams are,” says one US strategy director, who cautioned against removing external, objective advisers from the strategy equation, “the culture and politics create barriers to making the right marketing decisions for their business.”

Some planners believe agencies have not been brave enough in their strategy offer. “Very few agencies are engaged at the true intersection of business, brand and customer strategy. Primarily because agencies are not equipped. This is where consultancies play … They operate somewhere far more valuable”, one European CSO told WARC.

Upstream vs. Downstream

Planners want to be upstream, exploring big juicy business and consumer problems. The reality of their day-to-day roles, however, is quite different. With limited access to client data and an increased focus on tactical campaign elements, nearly half of respondents agree that these are the biggest obstacles affecting their teams.

Moving upstream will, however, require upskilling planners in different areas of business. Above all, commercial skills, argued Leo Rayman, CEO of Grey London and a planner by training. “How can you possibly be a powerful adviser if you don’t have a visceral grasp of the commercial realities?” he writes in the report.

Elsewhere, some strategists believe that their discipline must learn from execution. “We should understand that intersection where creativity meets the consumer, we should learn everything about it. And with consumers moving and changing so quickly, we should be more executional in the way we plan”, said Paula Bloodworth, Brand Strategy Director, Wieden + Kennedy, London.

Flux

WARC’s 2018 Future of Strategy report reveals a discipline in Flux, commented David Tiltman, Head of Content, WARC. “There is generally a feeling of optimism – of greater influence and growing teams. But that is undermined by the impact of client budget cuts and, more broadly, a sense that the planners and strategists are not thriving as they might in current agency structures, at a time when competition for strategic services is growing.”

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