ACC Survey on impact Corona virus May 2020

ACC Survey on impact Corona virus May 2020

We invited all ACC members to participate of the “You & Corona” survey.
We received 117 answers that represent 130 of the 135 ACC members.

A severe and massive reduction in activities. That is how we can describe the impact of the corona virus in our agencies. More than 80% of agencies saw activity decrease during the first six weeks of lockdown. The major differences per discipline are striking.

The event agencies are taking the worst blow (almost every agency has a decline of 75% or more of their income). The situation looks a bit brighter for digital marketing and content agencies. Heavy deteriorations are rare and there are even some players who saw an increase of activity. Broadly speaking, expectations for the coming weeks are in line with what the agencies have seen in recent weeks, although it is notable that the content agencies in particular expect the status quo may change to a slight decline. Services that had a higher demand in recent weeks are content strategy, digital content, social media and online events. Live events dropped sharply. Other services are balanced (an increase in demand for some, a decrease in demand for others).

Compensation for the temporarily unemployed is rare
If there is less work, part or all employees are put in temporarily / economically unemployment. At the digital and event agencies it can be noted that there have already been layoffs (or contracts have not been renewed). The PR & influencer agencies often resort to the system of compulsory annual leave. A fixed rule on temporary unemployment does not seem to exist: some agencies use the same percentage of time in temporary unemployment for all employees, in others the percentage varies from employee to employee or from department to department. On the other hand, there is more clarity about compensation for people who are temporarily unemployed. Only in 40% of cases does the agency provide partial or full compensation. In more than half of the cases, a governmental payment of 70% of the wages means 70% income, without additional reimbursement. The proportion of companies that provide compensation is the largest at event agencies. This is striking, given the sector has been most affected.

Delayed and canceled projects cause headaches
This corona crisis is confronting us with some unique challenges: uncertainty about the employees, uncertainty about the measures taken by the government, customers postpone their payments, ... Nevertheless, it turns out that postponed and canceled projects are causing most headaches for agency managers. And that applies to all types of agencies. Furthermore, the uncertainty about governmental measures also plays an important role at the event agencies. Logical. They will likely be very limited in their activities for several more months.

Teleworking succeeds
Working from home is and remains the rule, also at our agencies. Often only a few people occasionally go to the office, usually people in management roles. Here too, event agencies are the exception to the rule. Given the nature of the work, working from home is less obvious. However, working from home doesn’t have to mean reduced productivity. On average, 48% indicate that this decreases the productivity of the employees, but that figure is strongly influenced by the event agencies (who experience this reduction strongly). 33% of digital agencies even see an increase. The integrated agencies are at 17% increase. Decreased productivity is usually the result of the situation at home: howling children, a conference calling partner in the same room, etc. Fortunately, the teleworking tools prove efficient on average, both among employees and in contacts with customers. It seems that we have quickly found a new modus vivendi, which is livable for everyone.

The financial picture
These evolutions unavoidably have a financial impact. We asked how long this situation could last before closing the year at a loss. The answers vary a lot: 26% of the agencies can still keep it up for one to three months, 21% already provide red numbers for this year. The most positive echoes can be noted at the Content and PR & influencer agencies. Almost everyone is positive about the end of the lockdown: more than 70% assume that we can return to the office in May or June. Communication people remain positive and that is important!