Takeaways from the 2021 CallRail Digital Agency Outlook Report

One of the most frequently-asked questions over the past 12 months has been, “When things return to ‘normal,’ what pandemic-attributed changes will stick around?” Obviously it’s still too early to say, but businesses in all industries have started to look toward the future with this query in mind.

It’s not breaking news to say that from March 2020 to March 2021, most people have spent more time in front of a computer screen than they could have ever imagined. Movies were released without the help of a theater, concerts were played via streaming video, and online content creators have become bona fide celebrities, replacing some of the traditional Hollywood stars as household names.

For all the reasons stated above, the digital marketing industry has innovated, pivoted, and  paved the way for a bright future  A recent survey conducted by CallRail explains:


For Agencies, 2021 is Looking Bright

Aside from a select few industries, just about everyone suffered some sort of financial downturn in 2021. Though digital agencies were able to function just as efficiently (or close to it) as in pre-Covid times, the businesses which they represent were impacted by health and safety restrictions. For many of these businesses, the decreased revenue results in significantly reduced marketing budgets, meaning agencies felt the ripple effect.

The industry-wide story that was seen across the board is that in the spring of 2020, revenues dropped off significantly as businesses scrambled to figure out how to pivot to a digital-first strategy. Then as the year went on, business started returning, then growing, then growing some more.

The latest survey data has painted an optimistic picture regarding expectations for 2021. In the aforementioned CallRail survey, a staggering 88% of digital agencies reported being either satisfied or extremely satisfied with their current financial state, while on 3% reported being extremely unsatisfied. The reason? Even though year-over-year growth in 2020 wasn’t quite up to expectations for most, a shift to an increasingly-digital marketplace has raised projections for 2021. Even the agencies who took a hit in 2020 are expecting to rebound nicely this year.

Strategic Partnerships Are on the Rise…

Businesses who had to abruptly rely on their online sales to drive revenue have come to the realization that it pays to have a partner they can look toward for guidance. When asked what the primary reason was why clients chose a particular agency, two-thirds said that assistance with digital marketing “strategy” led the way.

The ability to show real, tangible results from campaigns gave both clients and advertisers reason to believe that consulting with advertising experts significantly improved sales throughout the difficult year that was 2020. This led to agencies reporting a nearly 70% second-contract renewal rate among those surveyed. This suggests that once an agency was able to prove it’s value to clients, they were very likely to continue the partnership in the future.

…But Some Challenges Still Exist

Growing an agency requires not only securing repeat business, but also generating increased revenue from existing clients. In addition, finding new clients is always at the top of the list in terms of the most commonly-reported challenges. Nearly 50% of agencies in the CallRail survey reported these two things (increasing revenue from current accounts and finding new clients) as being their #1 and #2 “pain points.”

Similarly, 53% of agencies said that it has become more difficult to find new clients and 52% reported increased difficulty in retaining current clients. Some of the more apparent reasons for these challenges include competition from other agencies and budget limitations for existing clients.



What It Means for the Industry at Large

First and foremost, the data suggests that the digital advertising industry as a whole is in a secure state. It doesn’t seem as if the pandemic restrictions are going to end any time soon, even though businesses have slowly begun to open their in-store operations back up to something resembling full capacity. Optimistically, this should give digital marketing companies a boost in sales as brick-and-mortar stores have recognized the necessity of a digital side to their business.

The recent survey also makes it clear that the most important factor in both obtaining new clients and retaining old ones is the ability to prove the value that they’re gaining with a digital ad partner. In 2021, there’s no excuse for failing to present tangible results to clients who have invested thousands of dollars into social media, SEO, call tracking, and various other digital products.

When approaching prospective clients, first determine what they’re currently doing in the digital space. Next, ask what KPIs (key performance indicators) they’re looking for to establish a bar for a successful campaign. If they’re currently utilizing another agency, ask about performance metrics and see how you can improve what’s already being done for the business.

Finally, remember that not all clients are a good fit for your agency. Though your goal should be to provide value to clients, make sure they’re also a suitable partner that provides value to you as well. Client-agency relationships work two ways, and getting hung up on a particularly difficult client can cause unnecessary challenges to the way your business operates on a day-to-day basis.

Dale Powell, managing director of Atomic Marketing said it best when evaluating the results of the CallRail survey: “We had a lot of time to think about the direction of our business and the types of clients we wanted to work with so we made some educated decisions to move pricing up and take a more firm hold to say ‘this is our price,’ which has eliminated the time wasters.”


Wrapping Up

It turns out the entire world moving online was a boost to the digital advertising industry (who could have guessed?!). Moving forward, those agencies and creators who continue to push creative concepts and take risks with their strategies can look forward to a positive outlook in 2021 and beyond.

If your business needs help putting together a digital marketing strategy that gets results, get in touch today.