Survival of the Fittest, Agency New Business Style: Will Digital-Only Shops Survive?

If you’re thinking about starting a digital-only Agency, you might want to think again as the growth potential might be somewhat limited long-term.  So say Marketers in our latest 2011 “A Marketer’s Look Ahead at Agencies” survey (to be released Monday in Adweek).  67% of Marketers surveyed state that in order for digital shops to survive they will need to offer more traditional media/marketing services.

This same sentiment was echoed at last week’s Mirren Agency New Business Development Conference, where CMOs from American Express, E*TRADE, Travelocity, and BlueCross BlueShield stated they are less inclined today to hire a digital-only shop that can’t help them operate in traditional media.

The challenges CMOs face are great enough as it is – with corporate boards, Wall Street, communities, and employees all placing increasingly greater demands – leaving little time to manage much more than a single marketing agency capable of helping them carry the entire ball.

We’re also seeing it happen among our RSW/US clients.  We represent five digital firms and all of them are playing cross platforms (digital and traditional).  They recognize Marketers are less likely to accept them if all they are is a singularly focused digital Agency silo.

They’re (and we) are finding that Marketers need the expertise of either a strong full  service firm with excellent digital resources or an exceptional digital firm with strong traditional resources to help them navigate into a smart, integrated marketing  campaign.

Separate, but somewhat related…and merely interesting and  thought-provoking….Andy McMains of Adweek asked me an interesting  question yesterday when interviewing me for the article.  He said,  “all else equal and if nothing were to change, who would survive: the digital firm with traditional capabilities or the traditional firm with  digital.  I voted for the former.  As a Marketer, I can always teach “traditional”.  It’s digital that will prove daunting and challenging.

In our new survey (set to be released Monday in AdWeek) 174 senior Marketing executives state they are more inclined to hire a single firm that can “do it all” versus parsing out the business to different firms.

Rather than taking the time to coordinate and manage a brand’s messaging and equities across a multitude of firms, Marketers in our 2011 survey state they would rather find one firm, particularly when it comes to bringing together digital and traditional media.

We have seen this on our AgencySearch side of our business as well.  Domain Chandon was trying to manage about a half a dozen different firms and found the exercise to be relentless and tiring.  The brand’s character wasn’t consistently represented, they didn’t know if they were getting their best bang for their buck across traditional and digital, and their costs were clearly not well optimized (or controlled).  Finding one Agency (in this case BPN/Pollinate out of Oregon) enabled them to count on one single point of contact and deliver effective cross platform campaigns to market.