- Agency Inner Circle
- Posts
- The Secret Impact Of Advertising Behemoths & Huge SaaS Companies on Your Agency
The Secret Impact Of Advertising Behemoths & Huge SaaS Companies on Your Agency
It's expensive out there - stay safe...
Tim Kilroy
11 Jul • Estimated Reading Time: 11 minutes
In partnership with
In Tonight's Episode...
Canary In The Coal Mine: Massive Agencies & SaaS Giants
WPP - the behemoth advertising holdco - had a really bad week…actually it’s having a bad year. Its stock is down about 45% YTD, and they dialed down their expectations for the rest of the year. Their clients (Ford, Apple, Google, etc.) aren’t going to spend as much as expected going forward. I posted about this earlier on LinkedIn (are we connected?):
The idea is that these huge advertisers can’t see a way to grow profitably later in 2025, so they just aren’t going to spend as much. Just this morning, I reposted something about the CAC payback time for SaaS companies (that’s how long it takes for the company to recover the cost in acquiring a client). For publicly traded SaaS companies it’s 57 MONTHS, and that is way above the 3 year payback average of 41 months:
What Does This Have to Do With Your Business?
I know, you aren’t a giant SaaS company, or a huge advertising conglomerate, so why does this matter? It is simple…the market economics are super-funky right now. Advertisers are spending less than forecasted because they can’t spend their cash effectively to drive growth. Large B2B buyers are making slower buying decisions and likely driving tougher deals (resulting in that dramatic increase in payback period).
I often tell clients (and anyone that will listen) that big macro economic issues aren’t relevant to their agencies because most of them are too small to be directly impacted by economic issues. I’m still right about that - big global things rarely have a direct impact on your business - and it is super-important to keep that in mind as you focus on growth. Otherwise, doom & gloom can infect your brain hole and ruin your mojo.
But I want you to pay attention to these two macro events because they represent a SHIFT in your value proposition - regardless of what your service is. Growing a business isn’t actually any harder now than it has been. I’ve talked to three agencies this week who are at all time highs for revenues. But there is a change that is needed starting today…
The best marketing ideas come from marketers who live it. That’s what The Marketing Millennials delivers: real insights, fresh takes, and no fluff. Written by Daniel Murray, a marketer who knows what works, this newsletter cuts through the noise so you can stop guessing and start winning. Subscribe and level up your marketing game.
Slow Moving & Tougher Negotiations
Giant businesses and advertisers are always ahead of the curve relative to economic change. They have more data and data crunchers to look at what is happening now and is likely to happen next. It one of the many advantages of scale.
Eventually, the same kind of strains will trickle down to smaller businesses and your agency will be facing an advertiser who decides to spend less, or takes 5 extra meetings and 3 more months to make a decision about your proposal. When those things happen, your fees go down and your costs go up. Through no fault of your own, you get squeezed between a rock and a hard place.
Consider yourself forewarned, now let’s get you forearmed, shall we?
The Revenue Rocket Is Out Of Fuel
Since 2010 or so, the agency sector has been in focused on client revenue growth. A better website = more revenue. Better creative = more revenue. More efficient targeting = more revenue. More efficient bidding = more revenue. Anything that an agency did was part of a growth story.
The biggest, smartest, least resource constrained marketers are saying ‘NOPE. We are going to hold on to more of our cash rather than invest it into additional growth.’ The most sophisticated B2B buyers are saying ‘UM, LET US GET BACK TO YOU…and maybe we will for a discount code, too’.
You’ve got to adjust your thinking from your agency as a growth engine for your clients. (Sorry all you “growth agencies” out there.) You don’t need to change your services or your pricing (probably) - you just need to change how you think and talk about it.
Your focus needs to be on efficiency & insight that drives more profit dollars for your clients. Profitable revenue growth doesn’t feel entirely believable right now (again, not your fault), so you need to show how your approach, thinking, ops & intelligence creates more margin.
Create How-to Videos in Seconds with AI
Stop wasting time on repetitive explanations. Guidde’s AI creates stunning video guides in seconds—11x faster.
Turn boring docs into visual masterpieces
Save hours with AI-powered automation
Share or embed your guide anywhere
How it works: Click capture on the browser extension, and Guidde auto-generates step-by-step video guides with visuals, voiceover, and a call to action.
It’s A Subtle Shift
Previously you might have touted your ability to INCREASE ROAS/SALES/CONVERSION RATE/TRAFFIC/BRAND AWARENESS/LEADS/RETENTION RATES/LTV, etc - all standard claims that agencies have made forever.
Obviously, you still have impact on those things - but the reason that you measure them and work on improving them is no longer to make your client bigger…now you are selling safety, predictability & the lowest chance of failure possible.
But it is a hard shift, because we’ve all matured in an environment that promotes growth as the most important thing. Scale is uttered with a near religious reverence.
As sellers of services, it’s your job to meet buyers where they are…and your buyers are in a position where the future feels less certain than even the tumult of the last half decade. They may not be believers in your ability to drive growth simply because they don’t believe it to be possible.
During your next sales process, try talking about efficiency, speed & adaptability. Those are the same actions, attributes & attitudes that create growth, but this time talk about it as a way to make your client safer & more secure so that they are prepped to take advantage of better market conditions.
Try it and let me know how that lands.
Seeking impartial news? Meet 1440.
Every day, 3.5 million readers turn to 1440 for their factual news. We sift through 100+ sources to bring you a complete summary of politics, global events, business, and culture, all in a brief 5-minute email. Enjoy an impartial news experience.
Some Tools That I Am Finding That Help Me With Efficiency
Descript: Makes editing videos pretty freaking easy - and the coolest thing is that if you flub a word or something, it can use your own voice to replace it with the right word. It’s pretty magical.
ChatGPT: Duh, everyone is using it, but their new Gmail, Google Drive & Hubspot connectors make things even more efficient. Can’ wait to see what ChatGPT 5 brings.
Relay.app: Relay makes building agents pretty easy. I don’t build anything too complicated (simple stuff like turning a call transcript into a blog outline, or repurposing content from a LinkedIn post into an Instagram caption…)
Apollo: Their custom powerups allow you to get some of the most popular Clay use cases (looking for job listings, grabbing the last 5 social posts from a prospect, or doing research via Perplexity, etc) w/o needing an additional subscription.
PodPitch: Makes finding and approaching podcasts as easy as sending an email. Really simple way to increase your own visibility. Save $100 on your 1st month.
Our sponsorships are ads (obviously - duh). But some of the companies or services linked in our content may pay us a minimal commission if you buy something from them. Potential payment is never a factor in what we link to, and we have direct experience with every company or service where you can buy something that we mention in our content.