LinkedIn

By Lee Shortall, Agency Partnership Manager, GO!

 

The digital agency landscape has always been fiercely competitive – but now more than ever, brands are taking back control with many leading marketeers using rhetoric such as ‘adapt to win’. The same old approach just isn’t working anymore, brands now require so much more than just agency skill-set – proven results in reducing CPA’s, taking consumer spend away from aggregators, even personality and communication style are all areas that are becoming the new pre-requisites in a brand’s briefing document. With budgets so constrained, and results even more vital, brands now want a ‘digital partner’, not just a digital agency.

The Econsultancy Top 100 Digital Agency Report (2019) highlighted the gap between the top 10 agencies vs the remaining 100. With total digital fee Income 12 times higher (£185m) than those sat in 11-100 (£15.3m). Despite this gap, majority of digital agencies continued to grow and prosper pre-pandemic and there wasn’t so much of a collected concern. However, with the market and landscape now drastically changing, there is a huge weight of importance on Digital agencies to adapt and re-invent themselves.

Findings coming out of “The Impact of COVID-19 on Digital Agencies” have suggested that there has been an average drop in the number of leads an agency generates by 66%, with 90% of the agency participants stating they are actively spending on marketing efforts across multiple channels. Whilst the former stat is alarming, the latter suggests that the majority of digital agencies are attempting to re-allocate budgets and focus their efforts on what is important when it comes to generating new business.

So, where does this leave the smaller independents?

It can be argued that some smaller independent agencies simply rely on referral, word of mouth and recommendations – but I have always questioned how this is enough. My time as an Agency Development Manager on the Google Partners project was aimed at assisting small to medium sized digital agencies, to assess how well equipped they were to win new Google Ads clients, and retain them. Of course, Google had a vested interest in making this project work, as the more Google Ads clients a digital agency won, the more revenue they generated. Nevertheless, we would run things like quarterly business reviews to assess agency health and their new client wins, how the agency was performing against individual campaigns, what their strategy was for the following quarter to bring new clients into their portfolio.

We would work with the agency side by side to ensure they achieved what they wanted/needed to achieve, whether it be education of new Google products, access to BETAs, a joint brand pitch endorsed at the Google offices, or even a ‘one-to-many’ presentation to an audience of a prospected new brand. Anything that was required to help aid their growth, we stepped in. On the most part it worked, for those who were receptive to it & wanted to grow as an agency. But what struck me the most, was the amount of support smaller digital agencies needed with this.

Can smaller independents adapt and grow to be more successful?

One key area that I found most of the agencies really needed support with was education. There were countless times where an agency would be just about to pitch a new brand after running an audit of their current Google Ads campaigns or were recommending the platform to a brand who had never previously invested in it. My role was to suggest the most effective platforms for the brand to allocate their budgets to and present these back to the agency. Often, if I mentioned the word(s) ‘YouTube’, there would be a lack of urgency to include this in the agency proposal. When questioned, it would simply be due to an absence of knowledge and experience within the agency of that paid channel. For any challenger brand, the number one ‘challenge’ is often brand awareness, and whilst any savvy search campaigns can help brands with less budget, directly reach a specific target audience, this doesn’t create long term brand affinity.

The point I’m making is, if a smaller agency has the ability to really open up a proposal and ‘wow’ a brand through exciting awareness campaigns that can be built through products like YouTube – then why isn’t an agency investing all of their time and efforts into becoming certified in that particular channel? Brands are looking for something new, and something different in this climate. They are going to require a digital partner that will help them win, sometimes small additions like this can help the agency win too.

It is evident that now is an extremely important time for a leaner digital agency outfit that has previously relied on referrals/word of mouth to have a clear new business strategy in place over the next 12-18 months. Investment into their own marketing channels, business development, and services and skills offered will all become key components of success. If agencies in this sector of the market do not adapt, they are in danger of being left behind.