Cost-cutting, freelancers & fickle clients: Shradha Agarwal on agencies' new reality

Speaking of how quickly brands are switching agencies, she said, “It felt like a breakup, with the classic line, ‘It's not you, it's me, but can we still be friends?'" ]

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New Delhi: “If you throw a stone on this street, there’s a high possibility that it might hit someone from a digital marketing agency,” said Shradha Agarwal, Co-founder and Global CEO at Grapes, commenting on the state of the digital marketing industry.

Elaborating on her stance, she said, “From the Indian market perspective, it's been a difficult market across the industry. Let's be honest about it, irrespective of whatever anyone says. The entire adex has gone down from quarter one to three in 2024.

One of the key reasons is that offline spending is now going online, which is cheaper. So, there are three key problems that the industry is facing:

Firstly, the same brand that was paying X rupees in 2024 doesn't want to pay more than X next year. In fact, they want to reduce that cost, and they are constantly looking for cheaper vendors and cheaper alternatives.

Everybody thinks that they are a digital marketer, and the primary reason is brands, who are not ready to pay irrespective of whatever you bring on board.”

Well, it’s not just digital marketing agencies that are bearing the heat; Agarwal mentioned that even production houses are also feeling the pinch. 

“Production houses used to charge Rs 1-2 crores for a particular project, but now people are not ready to pay even Rs 25 lakh. Brands are literally saying, ‘Why can't you just use a smartphone?’” Agarwal resolved. 

According to Agarwal, the rise of freelancers in the digital space mirrors the surge of digital marketing agencies during the era dominated by offline media agencies.

“Because of freelancers popping up everywhere, digital agencies today need to continuously hire fresh talent. We also had to let go of some people, so 2024 was a tough year,” said Agarwal in a disheartening voice.

Describing another trend resulting in job losses, Agarwal said, “If you look closely at the tenure of CMOs, it has been decreasing, with many not lasting beyond 2-3 years. This trend is partly due to a preference for younger CMOs, typically around 40 years old, leading to job insecurity for those over 50. 

Additionally, these younger CMOs often hire 20-something employees who are cheaper and can handle multiple tasks. Frequent job changes are common early in one's career, but as salaries reach the Rs 15 lakh threshold, hiring becomes less frequent due to the increased cost, and then there is a continuous supply of fresh talent coming in because of campus recruitments. 

This situation forces many 25-year-olds to start their ventures, increasing competition in the market. The Indian market needs to stabilise and recognise the value of experience, understanding that quality comes at a cost.”

Pointing out the kind of comments received when speaking to brands, Agarwal noted, “One of my clients signed me up with the promise of paying more next year, saying it was a foot in the door. However, the following year, they said, 'If you want to do it, do it because someone else is doing it at a lower price.' There's no respect for time, with statements like, I even received a call at 6 am saying there was a comma missing in an Instagram post.

There's no loyalty. Earlier, many agencies and clients used to have relationships lasting ten years. Now, clients are ready to fire you every two years without a reason, saying they want something fresh and will try new agencies. It felt like a breakup, with the classic line, ‘It's not you, it's me, but can we still be friends?’”

Considering the challenges on her home turf, Agarwal told BestMediaInfo.com that her push for expanding into markets like London, Dubai, Greece, Spain, and the US stems from how poor the working conditions in India are compared to the margins they receive.

Speaking of international expansion, Agarwal further stated the challenges that come when an Indian agency tries to cross the sea.

From the horse’s mouth, she said, “While you are paid 3 times more for the same work abroad, the issue with Indian employees is that they often lack a good command of the language. You may have a good designer or videographer, but many Indian employees don't understand typography. They don't know the appropriate spacing between lines of text when creating a typography composition.

Additionally, the aesthetics desired in the international market are very different from what is created in India. The look and feel that international clients want are not the same as what is typically produced here.

Even though our employees are exposed to international content, they are also exposed to Indian content. Look at our reels; most of them don't look aesthetically pleasing. The text placement is often off.”

The profit margins in India are skewed, but the overseas market is a tough nut to crack, so what do you do?

In such a scenario, Agarwal advises indie agencies to seek help from partners who have prior experience with international design aesthetics and content language. 

Grapes Worldwide currently has 300 employees across the board, so we asked Agarwal if she plans on expanding her team, and she replied by saying, “Due to the cost-cutting measures in the industry and the increased use of tools, we need to have one person perform multiple jobs. Right now, what’s happening is that agencies are getting stuck with a person rather than focusing on the role. 

Therefore, hiring should be based on the role, not creating a role for the person in the system. Scaling will come from driving new clients or exploring new verticals, not hiring more employees.”

digital marketing brand Grapes freelancers digital marketers
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