What next for digital agencies? It's time for them to make some tough calls
The role of digital within the marketing mix continues to evolve and grow at pace and, as a result, both digital agencies and their clients find themselves at a crossroads.
Chris Mellish
Agencies need to consider carefully which services they continue to provide, which to kill and which to add. In turn, clients need to carefully assess the partner structure they need to deliver against their digital requirements – for both, the answers don’t appear to be obvious right now.
The fact is, every touch point a brand now has with a consumer is either digital, has a digital component or connects with the consumer through a digital channel. From the marketing of products, to the provision of online services, through to the use of social as a customer service channel, consumers expect a lot and this means there is an overwhelming amount for any brand to consider, prioritise and deliver.
From an agency perspective, the sheer amount of expertise required to deliver against all of these requirements is vast, and, if we are being realistic, close to impossible to house under a single agency roof, at least to an extent where you can genuinely call yourself an expert in all of them.
This growth in opportunities has also meant that there is barely an agency or professional services outfit in the country that doesn’t claim to be able to help brands with their digital requirements. From the traditional agencies to the big consultancies and the system integrators, everyone is telling the clients that they have exactly what they need.
So selecting a digital partner and constructing an agency setup has become overwhelming and understandably confusing for clients. This is clearly reflected in the frequently confusing pitch lists that digital now seems to attract. Just ask anyone working in a major digital agency how many times in the last year they have been faced with a pitch list that makes no sense – often combining digital agencies and experiential agencies and traditional creative agencies into one confusing competitive process. How the client manages to truly choose the best partner for the job when all are built so differently is anyone’s guess.
Some clients have responded by bringing digital in-house, building out the more commodity capabilities internally that traditionally digital agencies have had as their bread and butter. It’s not the first time this has become a trend in the past 15 years, but digital is no longer the 'black art' it used to be, so the chances of this succeeding are significantly higher than they have ever been before.
All of these factors combined mean that clients are now starting to question what role their digital partner needs to perform and what shape that partner should be, and in some cases, whether or not they in fact need one. Do they really need to pay for account teams, planners and creatives from multiple agencies? Do they really need the management headache this often creates for their teams on a day-to-day basis?
So both digital agencies and clients are now at a point where they need to make some tough calls.
From an agency perspective, is it still possible to claim you are the best partner to design and build a brand's business-critical e-commerce platform, run their social media channels and deliver all of their digital marketing needs? Do you risk appearing a generalist rather than the expert the client requested?
As for the clients, they need to think carefully about their digital priorities and align their partner choices around them. They also need to understand that the answer is likely to include multiple partners and that the responsibility to manage this setup sits as much with them as it does with these partners.
The opportunities in digital for brands are enormous and will continue to grow, but given the constantly evolving nature of the channel they are never going to be easy to realise.
Chris Mellish is a partner at Black Book London and former CEO of Razorfish