Digital Marketing, Digital Media, Integrated Marketing and Media, Internet Advertising

The 10 Strengths of the Agency of the Future

Web services giant Sapient recently fielded a national online digital marketing survey of more than 200 chief marketing officers (CMOs) and senior marketers responsible for managing digital budgets (among other things).

Survey respondents were asked about the top qualities they sought in their advertising and marketing agencies in the coming year.

Sapient’s Top 10 Wish List for Agencies of the Future…and My Comments

1. Greater knowledge of the digital space. With more than a third of marketers surveyed revealing that they are not confident that their current agency is well-positioned to take their brand through the unchartered waters of online digital marketing and interactive advertising, it’s clear that agencies need to have a greater knowledge of the digital space in order to thrive. In fact, nearly half (45 percent) of the respondents have switched agencies (or plan to switch in the next 12 months) for one with greater digital knowledge or have hired an additional digital specialist to handle their interactive campaigns.

This is another in a series of warnings from me that traditional agencies NEED to get uber-competent at digital marketing now. Clients are switching agencies based on digital marketing knowledge. See my post “Wake Up Agencies – Digital Shops = Trojan Horse” for more.

2. More use of “pull interactions.” When trying to engage consumers with their brand, 90 percent of respondents agree that it is becoming increasingly important that their agency uses ‘pull interactions’ such as social media and online communities rather than traditional ‘push’ campaigns.

No question this is true, and it will be even more acute in 2010 when Millennials (who prefer organic sources of information and recommendations) become a larger demographic cohort than Boomers or Gen X. 

3. Leverage virtual communities. An overwhelming 94 percent of respondents expressed interest in leveraging virtual communities (public and private) to understand more about their target audience.

This one is a little fuzzy for me. It sounds like market research using social networks. That can work, but if this list is in order, no way is this #3 for the future of agencies. On a related note, check out Rapleaf. They take a database (your client’s email list, for example) and cross-reference it against all the social networks so you can figure out if you should emphasize MySpace, Facebook, LinkedIn, or something else. Cool, and potentially massively useful. 

4. Agency executives using the technology they are recommending. Ninety-two percent of respondents said it was ‘somewhat’ or ‘very’ important that agency employees use the technologies that they are recommending. For example, it is important that agency executives regularly use Facebook, Flickr, wikis, blogs, etc. in their personal social media mix.

The fact that this even made the list is an indictment of the advertising profession. If you’re going to pitch a social media campaign to a major client, you might want to have a Twitter account (among other things). It’s like SEO firms that aren’t ranked anywhere on Google for their own services. The Emperor has no clothes.

5. Chief Digital Officers make agencies more appealing. Forty-three percent of marketers surveyed said that agencies with chief digital officers are more appealing than those without.

I agree that having somebody in charge of digital strategy in an agency can be beneficial (disclosure: I had this role at Off Madison Ave for nearly 3 years). However, that approach only works if the agency has many digital experts, and just needs someone to steer the ship. Too many small and mid-sized agencies far prey to the “guru syndrom” and hire one Internet guy to handle all digital marketing for their agency. Big mistake. If that guy leaves (and he will), you’re screwed. And, centralizing digital expertise gives the rest of your staff an excuse to not get better at digital marketing. Don’t do this. See my series of training workshops for agencies on how to not get your whole agency competent at digital marketing. 

6. Web 2.0 and social media savvy. Sixty three percent of marketers surveyed said that an agency’s Web 2.0 and social media capabilities are ‘important/very important’ when it comes to agency selection.

Yes. Related to a couple of the points above. However, it’s critical for agencies to have a social media strategy for their clients, not just a random collection of social media tactics. Building a wikipedia page is not a strategy.

7. Agencies that understand consumer behavior. Seventy-six percent of respondents deemed this as an ‘important/very important’ aspect of their agency’s online digital marketing and interactive advertising area of expertise.

Isn’t this what agencies are supposed to be doing now (never mind the future)? This will be a huge determinant on agency winners and losers in the future, because Google and others will take away agencies’ revenue streams that are procedural rather than strategy and creative-driven. See my post about Google looking to crush agencies for scary details. 

8. Demonstrate strategic thinking. Seventy-seven percent of marketers surveyed ranked strategy/brain trust capabilities at the top of their agency wish list.

Yes. See #7. Same thing in my book. 

9. Branding and creative capabilities. Sixty-seven percent of respondents ranked branding at the top of their agency wish list while seventy-six percent ranked creative capabilities as ‘important/very important.’

This one is definitely more future looking than some of the others. At present, especially for the mid market, digital marketing can sometimes be very successful without great branding. But that will change, and agencies MUST get their creative teams comfortable with digital. How do creative directors get away with “I don’t really understand online, so I have our junior art director do that stuff”? Would that work for radio? For outdoor? For magazine? Well guess what, Internet advertising is larger than all three of these media types (U.S. annual spend).

10. Ability to measure success. It’s no surprise that marketers want an agency that can report on where campaigns succeeded, fell short and where they should be fine-tuned. Sixty-five percent ranked analytics at the top of their agency wish list.

This is the secret weapon of digital marketing and what makes it superior to traditional in some ways. Agencies that aren’t using the inherent measurability of interactive marketing to their advantage are missing the boat. The reason digital marketing will thrive in the recession is its targeting and tracking components. 

 

What do you think? Are there other attributes the agency of the future must have? Jetsons-style flying car? Extreme Wii proficiency? Please leave a comment with your ideas.

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  • http://twitter.com/meaganfish/status/926664907 Meagan Fish
  • http://www.creativeagencysecrets.com/ Rebecca Caroe

    Jason

    You are spot on the money here! I spend my life working with agencies on how to improve their business development i.e. find new customers.

    When I really want to work with my hands tied behind my back I can honestly say that my clients are the ones who are the 100% negative of Sapient’s list.

    Great analysis!
    Rebecca

  • http://www.creativeagencysecrets.com/ Rebecca Caroe

    Jason

    You are spot on the money here! I spend my life working with agencies on how to improve their business development i.e. find new customers.

    When I really want to work with my hands tied behind my back I can honestly say that my clients are the ones who are the 100% negative of Sapient’s list.

    Great analysis!
    Rebecca

  • http://www.creativeagencysecrets.com/ Rebecca Caroe

    Jason

    You are spot on the money here! I spend my life working with agencies on how to improve their business development i.e. find new customers.

    When I really want to work with my hands tied behind my back I can honestly say that my clients are the ones who are the 100% negative of Sapient’s list.

    Great analysis!
    Rebecca

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  • http://www.freshnetworks.com/ Charlie

    Great post Jason,
    I think I can explain what point #3 (Leverage virtual communities) is really about and why it deserves to be up there near the top of this list.

    First off, there is a significant difference between Social Networks and Online Communities.

    As you say, social networks, like Facebook can be used for research – especially if you are into semiotics or ethnographic. They are a great way to watch and learn from consumers while they are getting on with life, as opposed to creating a “false” situation where you are asking them questions in a traditional market research manner. Just like the saying goes: “if you want to understand tigers, watch them in the jungle, not in the zoo”.

    But I suspect what Sapient are getting at, and the reason why the opportunity is much more than simply observing people hanging out in Facebook, is that they are really talking about online communities. Brands can use online communities to get close to their customers and engage them in a direct conversation (as well as listening in to the conversations customers have with one another).

    A classic example is Dell Ideastorm where thousands of customers have made suggestions for Dell on how they can improve their products and services. Thus leveraging virtual communities can be as much about customer-led innovation as insight and research. Threadless is another classic example.

    Virtual branded communities (where you are gathering customers who want to talk about your product or service and how it fits into their lives) are very different from social networks. In some ways they are the online equivalent of traditional focus groups. But they can also provide much more than a sounding board or research tool. They can also enable an ongoing conversation with customers, they can become the centrepiece of an Open Brand and they can help drive advocacy and word of mouth.

    Personally I think the last benefit is the most essential. In the “Pull” world of marketing, a customer community might just be your greatest driver of Word of Mouth and thus sales. See this post for the differences between advertising on a social network and marketing using a virtual community.

    And keep up the great blogging!
    Charlie

  • http://www.freshnetworks.com/ Charlie

    Great post Jason,
    I think I can explain what point #3 (Leverage virtual communities) is really about and why it deserves to be up there near the top of this list.

    First off, there is a significant difference between Social Networks and Online Communities.

    As you say, social networks, like Facebook can be used for research – especially if you are into semiotics or ethnographic. They are a great way to watch and learn from consumers while they are getting on with life, as opposed to creating a “false” situation where you are asking them questions in a traditional market research manner. Just like the saying goes: “if you want to understand tigers, watch them in the jungle, not in the zoo”.

    But I suspect what Sapient are getting at, and the reason why the opportunity is much more than simply observing people hanging out in Facebook, is that they are really talking about online communities. Brands can use online communities to get close to their customers and engage them in a direct conversation (as well as listening in to the conversations customers have with one another).

    A classic example is Dell Ideastorm where thousands of customers have made suggestions for Dell on how they can improve their products and services. Thus leveraging virtual communities can be as much about customer-led innovation as insight and research. Threadless is another classic example.

    Virtual branded communities (where you are gathering customers who want to talk about your product or service and how it fits into their lives) are very different from social networks. In some ways they are the online equivalent of traditional focus groups. But they can also provide much more than a sounding board or research tool. They can also enable an ongoing conversation with customers, they can become the centrepiece of an Open Brand and they can help drive advocacy and word of mouth.

    Personally I think the last benefit is the most essential. In the “Pull” world of marketing, a customer community might just be your greatest driver of Word of Mouth and thus sales. See this post for the differences between advertising on a social network and marketing using a virtual community.

    And keep up the great blogging!
    Charlie

  • http://www.freshnetworks.com Charlie

    Great post Jason,
    I think I can explain what point #3 (Leverage virtual communities) is really about and why it deserves to be up there near the top of this list.

    First off, there is a significant difference between Social Networks and Online Communities.

    As you say, social networks, like Facebook can be used for research – especially if you are into semiotics or ethnographic. They are a great way to watch and learn from consumers while they are getting on with life, as opposed to creating a “false” situation where you are asking them questions in a traditional market research manner. Just like the saying goes: “if you want to understand tigers, watch them in the jungle, not in the zoo”.

    But I suspect what Sapient are getting at, and the reason why the opportunity is much more than simply observing people hanging out in Facebook, is that they are really talking about online communities. Brands can use online communities to get close to their customers and engage them in a direct conversation (as well as listening in to the conversations customers have with one another).

    A classic example is Dell Ideastorm where thousands of customers have made suggestions for Dell on how they can improve their products and services. Thus leveraging virtual communities can be as much about customer-led innovation as insight and research. Threadless is another classic example.

    Virtual branded communities (where you are gathering customers who want to talk about your product or service and how it fits into their lives) are very different from social networks. In some ways they are the online equivalent of traditional focus groups. But they can also provide much more than a sounding board or research tool. They can also enable an ongoing conversation with customers, they can become the centrepiece of an Open Brand and they can help drive advocacy and word of mouth.

    Personally I think the last benefit is the most essential. In the “Pull” world of marketing, a customer community might just be your greatest driver of Word of Mouth and thus sales. See this post for the differences between advertising on a social network and marketing using a virtual community.

    And keep up the great blogging!
    Charlie

  • Jason Baer

    Hi Charlie. Excellent comment, thanks! I believe you’re right in that major brand-centric Web destinations can work (although the number of failures in this space (Wal-Mart, Coke, et al) probably outnumbers the successes).

    However, at the mid-market level – where I typically try to ground my thinking – the ROI analysis on launching your own branded community is rough at best.

    Ultimately, there are very few brands that people care enough about to spend leisure time with that brand, online or off. I don’t see that changing. Thus, while online communities – while potentially effective – are a high risk, high cost proposition that are probably not low hanging fruit for most brands.

    j

  • Jason Baer

    Hi Charlie. Excellent comment, thanks! I believe you’re right in that major brand-centric Web destinations can work (although the number of failures in this space (Wal-Mart, Coke, et al) probably outnumbers the successes).

    However, at the mid-market level – where I typically try to ground my thinking – the ROI analysis on launching your own branded community is rough at best.

    Ultimately, there are very few brands that people care enough about to spend leisure time with that brand, online or off. I don’t see that changing. Thus, while online communities – while potentially effective – are a high risk, high cost proposition that are probably not low hanging fruit for most brands.

    j

  • Jason Baer

    Hi Charlie. Excellent comment, thanks! I believe you’re right in that major brand-centric Web destinations can work (although the number of failures in this space (Wal-Mart, Coke, et al) probably outnumbers the successes).

    However, at the mid-market level – where I typically try to ground my thinking – the ROI analysis on launching your own branded community is rough at best.

    Ultimately, there are very few brands that people care enough about to spend leisure time with that brand, online or off. I don’t see that changing. Thus, while online communities – while potentially effective – are a high risk, high cost proposition that are probably not low hanging fruit for most brands.

    j

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  • http://twitter.com/seerysm/status/1464222270 Shannon Seery Gude

    @TheDavidGroup This one is good too: http://bit.ly/16tjV The 10 Strengths of the Agency of the Future

  • http://twitter.com/ritaklein/status/1671626867 ritaklein

    RT from 08 but good @tweetmeme 10 Strengths of the Agency of the Future | Digital Media | Social Media Consulting … http://bit.ly/16tjV

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  • http://twitter.com/sportsmktgrev/status/8567474797 rEvolution

    RT @jaybaer The 10 Strengths of the Agency of the Future | Digital Media | Social Media Consulting – Convince & Convert http://bit.ly/6Uo9a

  • http://twitter.com/acrobatant/status/8595345179 AcrobatAnt

    The 10 Strengths of the Agency of the Future – http://bit.ly/966G7c (via @jaybaer)

  • http://jimmy-gilmore.com Jimmy Gilmore

    Reading this is the kind of post makes me sick to my stomach because I know in my gut that so many agencies that old colleagues and friends work at are still not ready for change we're already in the midst of. Even agencies that are trying to do the right thing are struggling to do it. It's really hard to hire and expand expertise in the middle of a recession. But many are in a do or die situation.

    In the end, the best of the digital and the best of the traditional will adapt and create the kind of agency clients are demanding. See this my take on what the future looks like here.

    Thanks for another provocative post
    Jimmy</div>

  • http://twitter.com/thewebdawg/status/14169064089 Dan Thompson

    RT @jaybaer: The 10 Strengths of the Agency of the Future http://bit.ly/16tjV <– still a valid wishlist nearly 2 years later…

  • http://twitter.com/uxfeeder/status/14207842771 UX Feeder

    Delicious: The 10 Strengths of the Agency of the Future | Digital Media | Social Media Consulting – Conv… http://bit.ly/djg3yY [Research]

  • http://twitter.com/tsukipr/status/21619974364 Edweana Wenkart

    The 10 Strengths of the Agency of the Future – http://bit.ly/966G7c

  • http://twitter.com/afieditor/status/21620191904 R Siemienowicz

    RT @TsukiPR: The 10 Strengths of the Agency of the Future – http://bit.ly/966G7c

  • http://twitter.com/thefarmdigital/status/21621275008 TheFARM

    Old article yes (2008!!) but still relevant : 10 Strengths of Agency of the Future http://bit.ly/16tjV

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