On November 23 last year I spoke at the AIMIA V21 Digital Summit in Melbourne. The topic I was invited to talk on was “The future of specialist digital agencies”. In a time when everything is digital, what is the purpose or role of a specialist digital agency?
Preparing the talk was interesting as it involved a review of all of the trends we had noticed in the past 2 – 3 years leading us to the current market. But more importantly, it was considering where the future trends are heading, especially overseas in some of the more technically advanced markets, particularly the USA.
The Digital Agency
The big issue is that marketers are generally still viewing digital agencies as simply operating in an extension of the traditional market. That is that digital agencies are often engaged as a ‘digital’ version of their creative agency. This is because for those marketers, digital is seen simply as another media, alongside television, press, radio and OOH.
In these cases, the digital agency is simply a specialist ‘media/channel’ agency like having a television agency or a radio agency or the like. That may seem ridiculous, but it is largely because for these marketers, they see the solution to their creative agency not ‘getting’ digital, is simply to appoint a specialist.
The types of services required at this level is developing display banners, web-landing pages, websites and setting up Facebook brand pages. The primary purpose is to develop communication concepts and publish or broadcast these out into the media hoping to hit the audience. It is a disruption strategy. Some try to extend this into an engagement strategy by calling it storytelling. i.e.. telling the story of the brand / service / company / product.
The fact is that any creative agency worth considering can operate at this level. After all, almost anyone can and do come up with a digital creative idea. Creative agencies have been creating messages in the form of advertisements for more than 100 years. All they need to be able to do this in the digital media is have the production expertise. We have seen many traditional creative agencies either recruiting or acquiring these skills over the past five years.
But this is an incredibly limited marketing view of the opportunities available through technology. And this is where the distinction between a digital agency and a technology agency becomes important.
The Technology Agency
The fact is digital technology provides marketers with much more than simply a way of gaining attention and awareness. You can engage with your audience in a meaningful way moving beyond simply storytelling into providing the audience with utility or usefulness. Technology allows you to capture data on consumer behaviour and it can facilitate your customers telling stories about their experience of the brand and sharing it with others.
But also digital technology, in a business context, is more than just communications. Within a business, digital technology is also driving inventory systems, payroll systems, financial systems, customer database systems and the like. The same technology platform is used to manage the business and not just run the marketing communications.
It is best demonstrated when we look at the implementation of e-commerce in a large organisation. The IT side of the business usually engages one of the big IT consulting firms who usually get the technology right but forget about brand and consumer experience. On the other side you have communication digital agencies who will get the brand expression right and perhaps the customer experience, but often overlook the integration of the financial system, the inventory system, the stock and distribution system, all of which are required to make the e-commerce platform function seamlessly.
This is where a technology agency is required. Someone that can bridge the gap between marketing on one side, responsible for the consumer and IT on the other responsible for the system integrity and security.
Digital agency versus Technology agency
In November 2011 I wrote a post about the need to get strategic business alignment around your digital agencies. This was around the time that a major global consumer goods brand approached TrinityP3 to assist in selecting a ‘digital’ agency. The discussion was around what was required of a digital agency that the marketers roster of creative agencies could not provide.
The fact was that the client had a number of ‘digital’ agencies – some part of a creative agency and some specialists. But there were conflicts between the various agencies and it was not surprising as most of the agencies on the roster, including a sales promotion / retail activation agency saw themselves as ‘digital’.
The problem was not the requirement for a digital agency. They had more than enough of those pumping out digital concepts and ideas. What they really needed was a technology agency that could pull it all together under their global digital guidelines, which were managed locally by IT. But the IT department was understaffed for the continually growing task and also they were not engaged by the marketing department.
By bringing IT into the process, TrintyP3 managed a tender process to select a technology agency with the capabilities to work with marketing and all of their current roster of agencies and IT to ensure the implementation was compliant and met the integrity of the global technology guidelines.
Although all of the rostered agencies put up their hands for the role, they failed on the first step, which was the technology capability to work with IT across all of the platforms the company currently used. In the end, marketing and IT agreed on a suitable technology partner and two years later this agency is successfully managing the ‘digital’ agencies, marketing and IT.
The future of digital agencies?
To talk about digital as ‘new media’ is a misnomer. All agencies will and by now do have digital as some part or all of their offering. So to simply be a digital specialist is to be like every other agency. However, many of the digital specialist agencies have either come from a technology background or built a solid foundation as technology companies. They are uniquely positioned to take this role. And therefore the future of the digital specialist is to be a technology agency. A much broader remit than simply digital communications and one that cannot be easily faked with a few select hirings or buying another digital agency.
I don't believe that this is as simple as an either/or choice. At a global level, there are a select number of highly technical "digital agencies" which have the unique ability to meld highly creative thinking into highly technical situations. This something that many of the Technology Agencies are very poor at. A good Digital/Technology partner will see the need to build a bridge between the CMO and the CTO/CIO and will initiate this vital connection.
Hi Doug, nothing is simple and everything is complex. But this is simply a demonstration of a good starting point to distingush between the requirements that a marketer may need. Thanks for you contribution.
Interesting post – I agree with the digital / technical distinction you've made, because these days pretty much any agency around right now does some form of digital. So it is common to hear positioning statements like "we are digital at our core" on the basis that some of their staff can create simple static sites.
I think the split seems to be characterised like this:
"digital" agency – lots of creative and suits, and a small number of technical broadly skilled devs, ability to create static sites, and then use plugin style technologies or outsource any complicated development work that they then project manage
"technical agency" – tends to have far more developers vs other roles, but may still have creatives and suits. Of course there are some which are all devs, but I'd classify them as pure developers rather than technical agencies. These agencies have typically introduced more tech focussed systems to their business, like revision control, continuous integration and automated unit testing, as well as adopting certain development frameworks.
I think there is also a big shift going on in terms of pricing – in a market where I can go and buy a pretty nicely designed website for $30 and install it pretty much on my own, there is increased pressure on the "digital" style agencies to differentiate either into strategy or try to develop stronger technical abilities. The pressure on the tech agencies is keeping up with the fast pace of change in technology.
Hi Ben, and thanks for your comment. I agree. But I noticed that most of your references were website related. I think that this is where I see Technical agencies as applying technology design, development and implementation across the whole customer experience. Where as I have noted that Digital Agencies are producing communications in a digital platform and usually the web. What is the difference? One is applying a full breadth of technology, software, hardware, web-based, mobile apps, WAPs and the like to provide engagement and utility for the customer. Digital agencies seem to just focus on creating storytelling opportunities via the web.
yes- that is a good point of differentiation. Ironically, the positioning of the "digitals" (in my completely biased opinion) is probably going to be something along the lines of "we're full service and we can help you across a number of different channels, including digital", but within digital itself focus on "story via the web" (which is probably a lot nicer term than what I used – "simple static sites")
Another point of differentiation is team structure – a digital agency is typically driven by people with titles like Creative Director, Account Director etc, and then planners underneath that, and then the production team under that executing. Strategy and direction flow down waterfall style. My experience (again completely biased) is that in Technical agencies tend to be the flip, with the lead developers as the most "powerful" team members – they tend to drive direction and strategy.
On a related point, the actual team structure and workflow will probably be different – an Agile structure & approach seems to be more common with Technical teams, whereas the "digital agency" is probably more likely to use Waterfall.
Finally (you can see your post got me thinking) I think there is an interesting spectrum of companies within the Technical area. Some are generalists, and offer services in a number of different technologies (eg: .Net, PHP etc), while others are much more specialised in only certain technologies. Likewise, some do everything from design to setting up networks to hosting to app development, while others focus on some specific areas like mobile.
Hi Ben, yes it is true that digital agencies have usually adopted the structure of the creative agencies, unlike most tech companies who have the developers often front line, or at least project managers front line with the developers. The other point you make on the range of technology agencies is the fact that like most biological systems there is a continuum across all agencies from non-digital tradition creative to heavy tech focused IT companies. The purpose of the post and the presentation was to differentiate based on approach or view of technology and the opportunities it presents marketers. Is it simply another comms channels or does technology open a whole new way of business for the marketer around customer utility and experience, data and the customer story?
Very nice post, this brings us to a thought that not all technology agencies possess creative side to their coin and not all creative agencies possess technical expertise..this is the reason creative agencies are aquiring digital arms to project themselves as 360 degree agency…
On a different line of though..
will it be safe to say they can partner with technical agencies which has hired small creative team in place to think creative in technical terms or digital as a medium?
Its a comparison of acquisition to acquisition, as creative agencies will still require to outsource tech work inspite of acquiring digital agency…but if a age old creaetive agency outsources and supervises the technical agency to ideate, conceptulize, brainstorm and get an innovative idea executed can still work out….
and now enter the Systems Integrators and management consultancies – Accenture Interactive, Deloitte Digital, IBM, Booz, Javelin etc.
Having been part of a 'Technology Agency' for the past 6 years, I couldn't agree more. The main issue though is the grey area of overlap between certain requirements, especially creative. Should a new landing page for a new campaign be done by the Tech Agency or the Digital Agency? Capabilities for delivering this may well exist with both. In my view the digital agency is a little more aligned with Brand thinking than the Tech agency. Tech agency ties a wide spectrum, not just advertising or marketing but anything that is adding business value and bridge the gap between Tech and Marketing.
Hi Pradeep, I agree. The digital agency or even the creative agency should be responsible for the design of the consumer / brand assets, but the tech company is best placed for designing and managing the UX and the underlying tech to deliver the desired customer experience.