AD AGENCIES STRUGGING TO EVOLVE IN DIGITAL AGE
Clearly, there are many new challenges in the agency business relative to client/agency relationship management, account servicing, performance measurement, and accountability. In addition, a great deal of new contenders are keen to displace ad agencies in taking a strategic leadership role by helping global marketers embrace integrated, multi-channel digital marketing practices that blend both offline and online elements for greater market impact, engagement, and response.
• Agencies are struggling to evolve as marketing and traditional media go digital in all areas of campaign execution and audience activation.
• There is a power shift from master agency control of accounts to a more digitally empowered client wielding new partner and provider connections and resources.
• The advent of informal, viral, and mobile device-driven “developing nation” markets is straining and testing traditional agency capabilities and client relationships.
1. What’s driving adoption of new technology solutions and digital marketing platforms?
• Management mandates for greater accountability, visibility, and yield in marketing organizations
• Demand for deeper analytics and predictive modeling to improve customer economics and lifetime value
• Greater access to customer insight and intelligence, allowing better segmentation, personalization, and efficiency of spend
• Higher response and recall rates from customized communications, improving ROI and driving customer loyalty and advocacy
• End-to-end measurement of campaign effectiveness requiring robust, agile, real-time, on-demand marketing automation infrastructures
• New, digitally driven channels of market access and engagement, including mobile, Internet, social media, online communities, search portals, digital signage networks, point-of-sale output and display systems, etc.
Implications:
Watch for closer integration and collaboration between CMO, CIO, CPO, and CFO stakeholders. Agencies are outsiders to these processes and lack share of voice and credibility. Transformation and re-education of internal marketing groups in digital competencies has become a strategic imperative for chief marketing executives.
2. What’s influencing the power shift in client/agency relationships?
• New hybrid, demand-generation service providers and consumer-powered, experiential marketing models are taking greater share of marketing spend.
• The web-centric world allows marketers to build their own channels of insight, access, and influence rather than paying to reach third-party, controlled audiences.
• Continuous production, packaging, delivery, and tracking of fresh, relevant multimedia web content requires new skills, technologies, and management systems not offered by traditional agencies.
• Customer data integration (CDI) is the new marketing mantra as marketers strive to own the customer experience, improve listening and feedback, retain and grow relationships, and deliver more market-ready products and services.
Implications:
Without ownership or access to customer data and experiences, agencies are disadvantaged. CDI is not an agency proficiency, hence the rise of potential inroads and threats from IT integrators and consultants. Watch for offshore business process outsourcing experts
