In 2022, with the beginning of the great war in Ukraine, the advertising market fell by 65% compared to 2021, when it reached $1 billion (data from VRK). However, technology helped us to communicate with each other and counteract information propaganda. Financial aid to the army has been transformed into new Jar services. Technology and digital were perhaps the only aspects that gave the business hope for survival.
We received the last postpaid payment in March and started all over again. Most agencies probably found themselves in a similar situation.
A value proposition for the client. Clients don't need our awards and flashy presentations — they want to solve their business issues. We decided to focus on what we've been doing best for the past 13 years — combining strategy, technology, and creativity in our projects. After all, these components help speed up marketing or create a new product.
Resources. We have seen that almost everything can be restored. The main challenge was to start all over again. The basis of the service business model is people. They are the biggest item of financial expenses and the greatest growth potential. We tried to load ourselves with work and tasks as much as possible, thanks to which we managed to maintain a sense of stability.
Profit formula. Our main expenditure is the salary of the agency's employees. We began to focus on finance and strengthened our expertise with a professional CFO. Before the war, we sold projects on a fixed model, and now, we are gradually moving to a mixed model — hourly and fixed. This allows us to reduce the risks of uncertainty in projects, for example, when the deadlines are extended and the price of work is fixed and not tied to them.
Processes. We realized that even the most perfect rules and processes are ineffective without a developed culture. Now, we are at the stage of restarting our own agency culture and checking the progress of business processes and work.
The main indicator we focus on now is revenue per month, revenue per quarter + operating profit.
In addition, we have set up scenarios for economic development, and we project our financial plans according to three scenarios:
We keep financial records on an accrual basis (P&L).
The Ukrainian market today is in an economic downturn and, accordingly, a decrease in money. Western markets are the availability of resources (time and budget) to work on them. We mainly provide intellectual services, so our core specialists must be physically present in these markets.
The emotional state of team members based in Ukraine. It greatly affects their engagement in work and, consequently, the results. I believe it is the main challenge now. Truth be told, we have not yet found the best solution to help the team work steadily under constant stress.
We have launched a study of our clients and want to update their unsolved tasks and understand their current work using the Jobs-to-be-done framework. We are well-versed in it, as we have been working with it since 2017, and we borrow its practices from product design for our business. Simply put, when we communicate with clients using this methodology, we try to understand what they are not satisfied with now.
We have seen their ability to launch new digital products and brands (for example, the case of creating a new brand for the European CBD market — ATEM). Based on this, we realized that we have much work to do on our own operational efficiency and capacity for growth.
This inspired us to create and launch several new tech startups.
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No matter how we analyze our business model and what new technologies we use to accelerate communication and product solutions, the core message is the same: in a service business model, people make all the difference. It's like in a team sport: the finish of the team is recorded for the athlete who crossed the line last. In business, the weakest team member determines the time it takes to achieve results.
So, we are on the way to restarting the culture of our agency, and we have defined the current and future years as the years of team and people energy. Our challenge is to contribute to increasing the team's energy and, thus, restarting business processes. We believe people are best motivated by work that helps them achieve their goals and values.
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