That’s according to a survey of 250 predominantly small agencies (fewer than 30 employees) around the world between Wednesday, Mar. 18 and Tuesday, Mar. 24. It was conducted by Ad World Masters, a platform that matches agencies and clients.

Internal impact on agencies

More than 90% of those working at agencies in North America and Europe were working remotely. When asked how prepared they were to work remotely on a scale of one to 10 with one being “not prepared” and 10 being “totally ready,” the average answer was 8.5. More than 40% answered with a 10.

Remote Work Challenges for Agencies

Just over a third (34.2%) said the communication and teamwork was one of the main challenges of remote working, with particular mention that in-progress communication is easier and more spontaneous in person.

Productivity followed closely with 33.8% saying it’s a concern with families home and teams not being accustomed to collaboration tools.

Technical concerns such as network access, VPN issues and large file sharing were noted by 23.4% of respondents.

Interestingly, maintaining team morale — and company culture — was cited as a concern by just 12.6% of respondents. Less than 10% said communication with clients is a main challenge of working remotely, as most client communication is not conducted in-person.

External business impact on agencies

The survey then asked agency leaders about the expected impact on the projects and budgets for their existing clients.

Expected impact on primary client services

More than 30% expect major client changes will impact their businesses. Roughly 45% of budget and project changes are expected to have a negative impact on agency businesses. On average, 14% expect budget or project cancellations.

On the new business front, agencies expect new prospect inquiries to fall by 30% in the coming months.

Not all bad

It should be noted that more than 20% of respondents aren’t anticipating upheaval to their businesses during this time. And while the near-term looks bleak for many agency leaders, there were positive notes that surfaced in this survey. Many expect the market to bounce back within a year and others noted this is “an opportunity for real digital transformation.”