Are agencies hopelessly screwed or on the verge of a spectacular Renaissance?


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Maybe both.

It would be hard to overstate how thoroughly disrupted marketing has been by technology over the past 10 years — or how much disruption still awaits in the decade ahead. It’s against that backdrop that the giants of the marketing industry — agencies and their conglomerate ecosystems — are increasingly wrestling with their evolving role in this new era.

Not unlike the struggle of marketing technology within client organizations — which is not only analogous, but directly intertwined into the agency question — everyone agrees that things have changed. But opinions run the gamut of how to strategically address that change. Is this about tacking the sailboat’s course? Shedding weight and trimming the sails? Adding fancy new navigation equipment? Or is it more about abandoning the boat and going by airplane instead?

Econsultancy and Adobe just released a report, The Progression of Agency Value: Developing a Model for Agency Maturity in a Digital World, that looks at that debate from several angles. It contains a lot of great attributed (and unattributed) remarks from agency and brand executives, such as this gem from an anonymous strategy director:

“It’s hard to know what the ad industry is any more, where it starts and stops.”

Robin Bonn of Code Worldwide — a very different kind of firm in the agency ecosystem — is cited as saying, “Agencies still provide the magic of ideas, but technology will inevitably power most of the logic of implementation. Adapting to this sea-change in business model is proving very tough.”

Progression of Economic Value

The Econsultancy/Adobe report frames this struggle according to the “progression of economic value” model that Joseph Pine and James Gilmore described as the foundation of the experience economy.

In the context of agencies, this report focuses on the “deliver services” stage on up. They characterize agency challenges with technology, big data, and the new skill sets required as a maturity model that advances from delivering services, to staging experiences, to guiding transformations:

Agency Model for Maturity in Technology

In theory, it sounds promising.

But the rest of the world isn’t necessarily holding their breath for that metamorphosis. As one director of digital marketing who was interviewed said (emphasis added is my own):

“In my opinion, companies who want to excel in the digital space need a strong internal team able to connect creativity and execution, possibly using different agencies to do that. At the end of the day, we don’t need an agency to know what happens in the digital space: we all read the same articles and go to the same conferences. So we either need brilliant ideas or flawless execution from an agency.”

An executive summary version of the report is available free from Adobe here.

P.S. On the marketing technology frenemy triangle, there’s this quote in the report from a client-side global marketing leader:

“Traditional agencies that claim to have become digital or ‘full service’ are at risk of being put out of business by what we used to call systems integrations who have discovered that creating a pure digital marketing group (usually staffed by ex-digital agency people) and combining that with some really smart technical people (from the systems integration/technical delivery arm) makes for a very compelling offer in the digital age.”

Republished with author's permission from original post.

Scott Brinker
Scott Brinker is the president & CTO of ion interactive, a leading provider of post-click marketing software and services. He writes the Conversion Science column on Search Engine Land and frequently speaks at industry events such as SMX, Pubcon and Search Insider Summit. He chairs the marketing track at the Semantic Technology Conference. He also writes a blog on marketing technology, Chief Marketing Technologist.


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