Choosing the right path

Slowly but surely even the most dyed-in-the-wool marketing agencies are waking up to the notion that the implications of the digital revolution go far beyond treating it as just another channel to market. But there seems to be no consensus on how they should organise themselves to embrace this relatively new marketing tool.

Within the past few weeks we have witnessed the launch of Digital Marketing Group (DMG), in which Conservative Party deputy chairman Lord Ashcroft has taken a stake. Launched by former Euro RSCG agency chief Ben Langdon, DMG intends to transform two existing direct marketing agencies into "digital direct marketing" agencies. Almost at the same time AKQA, a predominantly digital agency that had merged with a traditional agency in the US, waved farewell to mobile communication manufacturer Palm – a client for whom it had provided digital and non-digital services around the world for several years. Being "in digital" is one thing. Delivering what clients really crave is quite another.

There are traditional agencies – above and below the line – that have hired digitally literate personnel with the aim of providing an in-house capability as an adjunct to their traditional offer. Most of these teams have been given an office and treated as a discrete department available to "support" the agency’s existing offer whenever the client mutters "digital" in a meeting.

Some traditional agencies have tried to integrate digital personnel into their client service teams so that marketing propositions can take account of the digital dimension at the initial planning stage. But old habits die hard and people from traditional creative disciplines tend to resist initiatives that disturb their comfort zone and might undermine their influence.

Then there are specialist digital agencies focusing on creating digital marketing campaigns, while some have ventured into the back-end technology elements as well.

Meanwhile, clients are having to reallocate their limited marketing budgets to accommodate the digital dimension, with the net result that neither traditional nor digital routes are able to deliver the quality clients should expect at a price that yields a reasonable profit margin. As if that was not bad enough, the rapid growth in digital activity has placed a premium price on extremely scarce staff resources.

Something’s got to give and some fairly simple outcomes can be predicted.

Traditional agencies that fail to embrace digital in an efficient and effective manner will have to live with lower incomes and either cut their cloth to match, or merge.

Digital agencies that choose to remain specialist niche players will need to demon-strate a superior range of digital skills if they are to attract and retain major clients as the global groups gradually get to grips with the need to deliver more cohesive multi-channel marketing solutions.

In the short term it will not always be easy for traditional agencies to offer top-quality, multi-channel solutions that embrace digital. The most obvious obstacle is the difficulty in getting the traditional creative resources to embrace the opportunities in new media.

Another potential obstacle is the failure among traditionalists to appreciate the different components that make up a typical digital capability. Clients are likely to expect a digital agency to plan, produce and – to a greater or lesser degree – deliver the campaign using its own specialist resources. Arguably a full-service digital agency might also deliver any e-commerce fulfilment facility that the campaign may require.

So any attempt by a traditional agency to embrace digital effectively may prove more successful if, instead of trying to inject digital thinking into existing organisational structures, an entirely new parallel agency were to be spun off by a team that can ensure past prejudices and practices are left behind. The team should focus on ideas and campaigns that draw in all the channels and skills that will maximise the outcome, without any prejudgement about the type of creative that should be used.

Experience shows that attitudes can be changed more quickly if personnel are removed from an environment where practices have become institutionalised. By running two parallel units it would be possible to please clients looking for all-embracing solutions and satisfy the needs of those who only want a traditional discipline and/or prefer to allocate their digital budget to a specialist agency. It may also prove easier to measure and manage job profitability. That is going to be of crucial importance in the changing times ahead.

Bob Willott is editor of Marketing Services Financial Intelligence, (www.fintellect.com)