As worlds collide
Posted on Monday, October 13, 2008 by Thijs Jacobs
Will agencies collapse? Maybe; evolution is something that often doesn’t come natural to companies, but involves people to take notice and drive innovation within their organization. Big (and small) tech companies are starting to move into agency territory and already have changed the way agencies do business. Interesting things are abound in the agency world and they may be permanent.
In the past, agencies defined the marketing space, by owning CRM and (digital) direct marketing efforts. But, tech companies are challenging that at a rapid pace. CRM used to mean, an understanding of the customer and a marketing strategy based on hard numbers, making real ROI possible. Nowadays, tech companies hold far more data than any agency and have people locked into their services, like no traditional CRM program ever could. On top of that, there has been a massive standardization of digital marketing efforts, making it possible to deploy and track digital campaigns directly on the platform of choice (think Google AdSense and AdWords). The (hyper valuable) data, once again, is flowing directly to the tech companies, leaving agencies in the dust.
Broaden the view to PR agencies and you’ll understand, that they too, are fighting an interesting battle with new trends in user generated content. No well-written press release will be able to stop people discussing negative associations with your client’s products online. Worse, many agencies seem to be unable to even keep track of the discussions happening online and thus unable to respond in an adequate way.
It’s the data stupid!
The most important asset for any agency, should be its data. Agencies, will have to develop platforms, that will allow them to track their efforts and measure ROI across assets. It’s absolutely mind boggling, that an agency, who controls all of their clients digital assets, knows so little about the users. There is a big future in behavioral targeting and personalized marketing, as it enables agencies to deliver better results to their clients.
Agencies, however, often seem to be technically and organizationally challenged, due to their inexperience of developing and managing large scale tech projects, as their company and financial structure evolve around campaigns. Agencies would do good, to hire more product managers, instead of project managers.
Stop campaigns, start thinking long term
It’s time, to stop launching (mostly flash) campaigns and start thinking about developing client-centered applications, that will lock in users for the long term. Google’s assets have far more daily (returning) users, than any digital client asset out there, mostly due to their utilitarian nature. Niche Social Network Sites, such as my personal favorite corkd.com, are attracting more daily (returning) users than the world’s most famous brands in those same categories. There are more users leaving a plethora of personal information on brand new Web 2.0 assets, than those leaving just their email address in order to receive your client’s newsletter.
One-off campaigns, though maybe highly creative, are a bad investment by nature. Whether or not, your campaign manages to have a “viral” (ugh; bad buzzword alert!) effect, does not matter, if it doesn’t bring you return on investment or more knowledge about your users.
Agencies and clients will need to innovate
Long term applications, often don’t rime with the way clients manage their marketing budgets. It will be the agencies role, to be the enabler and help the client make the transition. The agency, by itself, will also have to realize, that they will have to think out of the box and invest in long term efforts. Regardless on which side of the fence you’re working (tech or marketing), digital innovation in the marketing space is always an opportunity.
Small disclaimer! This post is of course extremely opinionated. Also, I was part of the team, that set up operations for the Ogilvy Digital Innovation Lab in Beijing, China and worked as Head of Digital Marketing at RMG Connect.