Why Digital Agencies Are Poised to Take Over the Ad Market


By: Reid Carr, President and CEO of Red Door Interactive
Featured in MarketingProfs November 29, 2012

For the last several years, ad agencies and holding companies have boldly and stridently bought digital marketing firms to add to their coffers. In most cases, the acquired talent is subsequently sequestered in one area of the office—if not in a completely separate location—to do their “magic” while the rest of the agency goes about business as usual. In the background, the traditional creative team’s concepts play in digital and vice versa while they kick execution to the person best suited to punch the right sequence of buttons on the keyboard. While the acquisitions have reduced the total competitive landscape, they have increasingly fragmented the execution of great ideas and stymied information flow. Thereby, the inability of ad shops to integrate the business approach of digital firms into their culture has provided even greater opportunities for the tides to turn. Soon, I venture that we’ll see a different approach: Digital agencies taking on integrated duties. It will happen with little fanfare or sizzle; it will simply be the case. In fact, the assimilation has already begun. Catalogs now beget an iPad app version, which, in turn, informs improvements to those catalogs. Then a mobile campaign begets a direct mail piece to supplement the reach of that mobile campaign. And, yes, digital agencies are handling the online and offline components of both these initiatives simply because it is easier that way.

What About the Strategy?
Traditional counterparts and even marketers sometimes forget that digital agencies that handle social media duties for their clients talk to their clients’ customers every single day. So, it is no wonder they “get it” more quickly than those agencies that continue to await research from their planners. The digital agencies know the voices of the customers, and they feel their pain in some cases. Beyond that, those digital agencies have more behavioral data (in real time) than most agencies care to go through. Which subject lines work better than others? What do consumers search for and are not finding? Each bit of data gets them deeper into the minds of the customer. The closer they are to the customer, the better and more relevant the ideas that motivate them. Despite the early indicators, I’m certain many “Mad Men” will scoff at this prediction, stating that the need for offline marketing has never been greater and the notions of their demise is very much premature. I would go one step further: Offline advertising and marketing initiatives will never go away. They are as vital as they have ever been. The dilemma is not in the strategy but rather in their execution, measurement, feedback, and continuous improvement cycle. The overwhelming majority of advertising firms remain mired in their insistence that many offline tactics (though necessary) cannot be directly tracked for their direct benefits. Rather, it’s the overall impact to brand awareness and sales that must be looked at to know if a more traditional marketing campaign is working—and not whether a company can pinpoint if a certain print or broadcast ad “tipped the scales in their favor.” In contrast, the discipline and methodologies that digital agencies provide their clients determine what programs are generating more interest and how that interest is converting to conversations and engagement as well as new and—as important—repeat customers. To digital markers, the term “interactive” means more than a new social media follower or improved Google search ranking. It means understanding and responding to what the customer, partner, investor, and other important audience member wants wherever they are and whenever they desire. That commitment is driven by a fierce passion to comprehend how to exceed a key constituent’s expectations on a very personal level. A digital agency’s DNA is one that is unique but very much sought after by companies wanting to profit from its marketing initiatives. It means more than knowing the code behind the latest mobile app or the ever-evolving Facebook campaign rules; it means also understanding fundamental edicts.

Traits of the Digital Marketer
The three most unique characteristics of a digital marketer’s mindset in comparison to those found in traditional ad shops include… Being driven by results. Measurability and analytics come with the digital territory, but somehow the more “traditional” touch points escape without much questioning by the established ad firms. In contrast, the leading digital agencies believe every piece of communication—no matter the media—has to deliver real results with real successes. Being a relatively new service at the time, such firms had to prove that what they were doing was actually working. Now these same digital agencies are poised to help organizations realize that their entire communications program can be held to the same measurable standards. Having one firm manage it all is also the only way to see how each execution is truly affecting the other. Knowing their audiences. Digital marketing firms make their strategic decisions based on insightful behavioral, emotional, and cultural research. The data they capture tells them what motivates customers, so they can create meaningful, measurable solutions based on intelligent and real customer actions. It’s because digital agencies know their audiences so well that they can strategically execute communications that engage, motivate, move, and inspire. They act consistently. And they can effectively produce the smart things we envision because those things are based on such a detailed portrait of our consumer. Being interaction-oriented. Digital firms believe everything—online and offline—is intended to be interactive. Their belief is that all communications must engage and influence behavior across multiple touch points. The success of any marketing campaign lies in carrying out continued conversations wherever our consumers live, work, and play. What’s more, digital agencies don’t let the media dictate the message or the other way around. Instead, they uncover their clients’ business problems and give them what is needed to solve it—be it a website, a print ad, or a radio spot. Connecting with audiences across multiple touch points is what allows organizations to strengthen the conversations with them over time. Now that digital marketing has become mainstream, firms need to open up the “black box” of offline marketing initiatives and make them as accountable as their online counterparts for their contribution to acquiring, converting, retaining and engaging audiences. I look forward to the day when the marketing industry no longer accepts the “you just know it’s working” as an appropriate measuring stick. We’ll be a more effective business service as a result.

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