A healthy dose of competition

CMO Council director Donovan Neale-May describes how the agency landscape is changing to offer new alternatives for marketers and firms alike.

Q: How has the role of a direct agency changed since the onset of the recession?

A: The major transformation happening is the switch from traditional print to digital and now to multichannel. The challenge is a cultural and economic one, because the client needs to integrate online and offline and be able to deliver e-mail, web, mobile and print. Agencies need to determine where is the optimal application of the direct channels.

Q: Has competition among types of agencies changed? How are direct firms faring against digital agencies and marketing services providers, for instance?

A: You are seeing a number of different agencies looking at how they can create diverse offerings. The PR agencies are looking at how they get into social, search and word-of-mouth campaigns, and you also have the content production and syndication agencies, as well. With digital, there is a whole landscape of specialized agencies – web content development, website development, microsite development.
There are a lot of digital service providers that are great with content. When you say digital, it’s getting more broad and diverse, and one agency can’t do it all. That’s why companies tend to have contracts with multiple vendors.

Q: What does this complicated, diverse agency landscape mean for marketers?

A: Clearly marketers are moving into digital, and so the challenge is how to map and model the marketing mix. The different strategies and the different placements on the web and mobile communications are enabling direct contact, interaction and messaging with consumers in a variety of ways. The direct business has really changed because the different marketing avenues have multiplied.

Q: Are marketers obtaining agency services from sources other than their traditional agency partners?

A: Absolutely. There is no question that the big advertising holding companies want to move with the flow, but some marketers are building their own digital marketing teams and consultants internally. They are also thinking about who else is in the mix – there are creative digital boutiques, firms that are very inventive and interactive and they create cool apps and other cool stuff. There are also those that are very highly creative – the digital “artiste” agencies. On the other side, there are website and development agencies moving into the interactive marketing zone with new services, as well as mobile specialists with specialized competencies. The new players are IT consulting services with marketing and sales practices.

Q: What are the biggest changes in the relationship between clients and agencies?

A: I think the biggest change is that agencies have more options, and they have more ways to impact and influence a client’s businesses. The smart agencies will be out there looking for every new technology and have a much wider assortment of options for their clients.

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