If you keep up with the goings-on of the digital marketing world, you may have noticed the increasingly dim outlook for digital marketing agencies.

The story goes something like this: Major consulting firms are leveraging their technology and brand swagger to provide data-driven solutions to marketing departments while simultaneously hiring creative designers or buying up existing digital marketing agencies to meet the creative need.

These ad agency supervillains, the most notable of which might be Deloitte Digital, Accenture Interactive, and IBM iX, are the bain of powerhouse digital marketing agencies across the globe.

Digital marketing agencies that can compete for the business of major global brands are relegated to either getting gobbled up by these behemoths or settling for the scraps.

To prove the trend, a recent study by Advertiser Perceptions discovered that a third of agencies surveyed think consulting-based agencies can provide more services than what might be called today’s traditional digital marketing agency.

To make things worse for digital marketing agencies, another 30% are considering bringing their ad planning in-house.

Source: https://www.marketingcharts.com/business-of-marketing/agency-business-81774

Creative Digital Marketing Agencies are a Thing of the Past

You read that right. Digital ad spend just surpassed TV ad spend in the United States and now we’re saying the days of digital marketing agencies are numbered.

Yes, at least those that rely on a strictly creative marketing strategy and/or too much emphasis on brand awareness as foundations of their marketing solutions. These days, measuring behavior and leveraging the detailed information about consumers available across various digital channels is the key to a successful digital marketing strategy.

Another indication that the trend is moving away from a creative-based strategy is the decline in hiring of creative professionals. In a survey by The Creative Group, just 5% of surveyed marketing and advertising executives intend to add creative positions within their firm.

These agencies are still hiring for existing vacancies but the fact that they aren’t adding creative positions is a sign that times are changing.

Source: https://www.marketingcharts.com/business-of-marketing/staffing-81799

The Trend Is an Unsurprising One

Successful digital marketing agencies are familiar with the trend towards a data-driven marketing strategy. They’re already combining the data in their CRM with performance analytics and customer behavior, sometimes in the same application.

In fact, these days, a digital marketing strategy without considering customer behavior is nothing more than a shot in the dark.

While creative work will always have a place in digital advertising, the consulting firms that are beginning to throw their weight around are banking on companies realizing that increasing revenue is more likely to occur via targeted customers’ experiences as well as brand awareness.

What Does This Mean for Digital Marketing Agencies?

In terms of competition, the entry of consulting firms into the market may not mean a lot depending on the size of the agency. Even large agencies that cater to local businesses won’t be affected. Local businesses don’t have the marketing budgets to attract the attention of consulting firms that have entered the fray so there’s no competition.

Digital marketing agencies that compete for the business of large brands – nationally and globally – may face competition from the advertising wings of these consulting firms.

The strength of digital marketing agencies might just be their creative talent. The creative-types that fill these roles in advertising often prefer the more startup-like feel of digital marketing agencies versus the more corporate atmosphere of consulting firms.

In addition to this creative talent, agencies will need to bolster their ranks with more programmers and analysts that can take data and turn it into tools that drive business for their clients.

One thing is for sure – digital marketing agencies can’t ignore the valuable marketing insight that can only be found at the intersection of digital, mobile and social data.

Conclusion

Reaching new customers is becoming increasingly easier thanks to the number of people using the internet and amount of time they spend there. The only downside is an attention span that lasts as long as it takes to scroll through social media feed on a mobile device – seconds.

Therefore, the new challenge for digital marketing agencies and consulting firms alike is using those precious few seconds to present each person with exactly what they need to see in order to capture their attention.

This is only possible with targeted information about each user including their likes, geolocation, buying habits, and demographics. Perhaps consulting firms are better positioned to be successful because they already have the technology but forward-thinking digital marketing agencies should be ready for the competition.

 

About the Author: Itamar Gero is the founder and CEO of SEOReseller.com, a White Label SEO digital marketing solutions provider that empowers agencies—and their local business clientele—all over the world. When he isn’t working, he’s traveling the world, meditating, or dreaming (in code).