Connecting the Dots / An Agency Blog

Over at i [love] marketing, Ana Andjelic makes some valid and interesting points on the comparison of digital and traditional agencies in her post titled Why Digital Agencies Aren’t Ready to Lead. It’s an interesting issue to consider. With integration and convergence now more or less a no-brainer, you really can’t have a campaign span both traditional and non-traditional channels without providing a consistent experience (can you?).

Ana defines digital agencies as “focusing on experimentation”, spinning their wheels trying to out-create competing agencies by making bigger and more complex digital experiences, while traditional shops “thrive on exploitation”, leveraging their bag of marketing tricks. This equates to more of a typical business model – make it once and sell it over and over again. It’s true, digital shops are terrible at this.

If you zoom out a bit you’ll see an interesting shift. Agencies like ours (and we’re certainly not alone here) have spent the past few years balancing relationships with both traditional agencies and direct to client work, while moving towards a traditional agency model in terms of client relations – how we pitch; how we deliver our client work. We’re also starting to see traditional firms incorporating far more digital, pitching bigger and more complex brand experiences, moving production in house. Goodby, Silverstein & Partners recently divulged that at least 60% of their business is now digital. Clearly CP+B have made huge leaps towards delivering solid digital strategies – many of the most hyped campaigns lately have been theirs, and have been largely digital. But, digital shops, of late, are also being awarded AOR status on some fairly hefty accounts. We also have shops like Struck who recently bought (or merged, we’re not sure) with the traditional shop Axiom and big box digital agency Sapient who recently bought up Nitro, a traditional agency.

These are interesting times, no doubt.

If we’re focusing on digital agencies, I think it’s important to define two very different kinds of shops. There are firms focused on production, which do some amazing work, but there are also studios focused on creative, marketing, and technology, even looking beyond digital to support the overall campaign idea. At Engine Digital, we’re working hard on the latter approach, because we’re passionate about all aspects of our work, particularly the marketing challenges, objectives, and goals. And so, I can’t fully support Ana’s point of view when she writes:

“When they (Digital Agencies) are asked to actually follow through on their ideas, they often come up short. It is because they don’t know the business of marketing (or want to know it, for that matter), and they rarely have the organizational structure or past practices to guide them.” – Ana Andjelic, i [love] marketing

I’d argue that digital agencies (perhaps with the exception of production-focused shops) are extremely passionate about marketing. Sure, most digital shops staff a younger team than their traditional counterparts and therefore may be less familiar with tried and true campaign strategies.  However, many of these tried and true strategies (particularly in media) are dying off and being replaced with marketing that’s driven by technology. Who’s leading that charge? Aside from a few big ad shops, it’s the digital agencies that are bending technology to make marketing spends more effective for marketers and the advertising more relevant for the consumer. The whole concept of marketing through branded utility, immersive brand experiences, and social marketing are fairly new ideas because digital agencies (and some traditional agencies) have pushed new conceptual thinking to the business. Consider the value provided by verifiable campaign metrics in online marketing. Sure, TV spots and radio spots can be (ahem) measured, but not nearly to the degree of online initiatives.

Leading a digital agency that often works on integrated campaigns, my team commonly looks deeply into the big idea to figure out how the online experience will meet campaign goals. It’s often surprising to see high-level ideas gain client approval without a deep consideration for the audience’s typical online behavior. Perhaps we as an agency look too deep. I attribute this to the fact that we as a team understand the marketing logic, audience behaviour, creative, and most importantly, the technology that drives the underlying experience.

It’s true, traditional shops have the relationship piece dialed, and that’s definitely where most digital shops, ours included, fall short. But with the state of the economy, retainers and budgets being cut back, and a general need to obtain a greater understanding of marketing performance (both in terms of the spend and the concept), the relationship needs to be balanced with other values. The industry trade publications make this clear on a daily basis.

I agree with Ana’s statement that much of what comes of this current shift will be a factor of what clients want, and what they are willing to support. With the tenure of CMOs hovering around the 20 – 24 month mark, it’s likely that we’ll begin to see a wave of more digitally savvy marketers leading the way on the client side (it’s already happening). And as this continues, we can only assume digital will become an even more relevant part of the marketing mix. And so, digital agencies (like ours) will need to continue to pull up their socks, while traditional agencies will need to start thinking further (to use an old school term) outside of the box.

Thanks, Ana, for a very relevant post.

Update
In his opening keynote session at ad:tech New York, Sir Martin Sorrell shared his perspective on digital, and had some significant things to say on this topic.

More on this debate over at AdAge.

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