Should Agencies Build Tech?

In the ongoing search for a competitive edge, agencies are developing in-house solutions to avoid reliance on technology vendors and improve communication. But the risk of this approach is that many of these agencies might step away from their core values and develop a bias toward their own tools—ones that might not necessarily be the best in the market or the best match for a client.

“It’s a survival of the fittest mentality,” says Adam Wolf, chief technology officer at global interactive marketing agency POSSIBLE. “We want to make sure that we stay in front of the pack.”

POSSIBLE is the home of POSSIBLE Labs, which Wolf describes as an “innovation initiative” that encourages technological developments through company funding and other resources. In fact, POSSIBLE uses social collaboration tool CoLabs, developed in-house, to keep its international offices informed of recent innovations, activities, and projects—and to collaborate with clients.

“People in Dubai or Shanghai can see what Labs in London, Budapest, or Costa Rica are doing and what they’ve built,” according to Wolf. “It makes it easy to connect…and communicate directly.”

Staying in control

He adds that driving technological innovation in-house prevents POSSIBLE from becoming obsolete and allows for more control than using a vendor’s tools.

“If you’re working with a third party…you have what you have based on their decisions,” Wolf says. “When we do it ourselves, and take the time and resources to invest in it, then we own that codebase and intellectual property, and we have an easier and more nimble way to uniquely morph it as technology and marketing requirements evolve.”

Like POSSIBLE, integrated marketing firm Blue Chip has developed its own tools, such as its Retail Hub, a searchable knowledgebase composed of shopper and retailer information, articles, and other insight. Blue Chip’s VP of shopper marketing, Jamie Olson, says the Hub serves as an education and planning tool for the agency and its clients, which helps strengthen relationships.

Olson notes that maintaining the database by keeping the information precise and relevant is an agency-wide effort, as well as a challenge. “It’s a living, breathing database,” she says. “It has to be updated [regularly] so that it’s accurate and that it’s actually useful. That’s going to continue to be the biggest challenge: continued engagement.”

Despite its challenges, in-house innovation is gaining appeal. Olson attributes the rise in many agencies’ technological spunk to the increased focus on digital and the desire to create an edge using in-house expertise. “We have access to all of that in in-house now,” Olson says, “versus trying to find an outside vendor, freelancer, or someone we can talk to to think through these things.”

However, Malcolm Cowley, CEO at performance marketing service supplier Performance Horizon Group (PHG), says agencies run the risk of putting their own agenda’s ahead of their clients’ and should stick to relying on third-party suppliers.

“If the software is the plumbing, the agency is like the contractor. So, typically, agencies are not well known for building their own technology,” Cowley says. “The challenge is…if you build your own technology it’s hard to be agnostic.”

“Large digital agencies would like to build these platforms internally,” adds Daniel Wright, head of affiliate marketing at iProspect, a provider of digital marketing solutions that uses PHG’s technology, “but the reality can often be that to provide a ‘best-in-class’ or even competitive level of campaign delivery, we need to be maintaining close relationships with our technology partners.”

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