Digital Agencies’ Day Of Reckoning
Here’s an interesting epilogue to one of the most important movements in advertising over the past decade. About 8-10 years ago digital specialty agencies entered the marketplace and started winning work from traditional full-service AORs. At that time digital (and especially mobile) was a great unknown frontier which brands knew they needed to master, and niche digital agencies were the keepers of the knowledge everyone coveted.
But less than a decade later digital shops are in need of reinvention. These agencies are being hurt because of the mainstreaming of knowledge they once specialized in, and the squeeze is coming from all directions including clients, consultancies, and competing shops. The simplest way to think about it is ten years ago brands needed these agencies to create a digital strategy, but now everyone’s entire strategy is digital. That means specialty skills like optimization, programmatic, measurement and attribution are table stakes for all marketers just to be competitive. As a result clients now have in-house teams to do the work digital agencies use to own, and larger AORs have deeper resources to provide the same services to digital hungry brands.
Today niche digital agencies find themselves at a crossroads where they must now pivot in order to survive. This includes bolting on their own new services like creative, investment and data management to be more of a one-stop solution for their clients. Ironically this will bring them closer to traditional agencies who are getting more digital by the day and end up blurring the line between the two groups.