Customers have changed, marketing channels have changed, and so have the marketing agencies that serve brand marketers.
Digital agencies dot the landscape with a broad selection of services, from search engine marketing to social media to content marketing.
These niche agencies complement – and often compete with – much larger, do-it-all advertising agencies that are aggressively adding new digital services to their traditional creative and media offerings.
The growing complexity of the agency ecosystem raises a key question: How do brands pick the best agency – or more likely, agencies – to suit their evolving needs and reach a changing customer base?
Everyone is going digital
As consumers spend more of their time online and on social and mobile channels, marketing budgets are also increasingly focused on digital.
Revenues from social media advertising will quadruple from 2010 to 2015, surpassing the $8-billion mark in 2015, according to BIA/Kelsey. Meanwhile, eConsultancy predicts that search engine marketing will grow 16 percent in 2011 to $19.3 billion.
Advertising and PR agencies are getting into the content development space, and media companies are getting into the marketing mix in a symbiotic convergence around content marketing.
In a March 2011 study by the Custom Content Council, 59 percent of CMOs said they had shifted marketing funds from traditional advertising to custom content over the past year. In the B2B sector, content marketing is expected to account for nearly 26 percent of marketing expenditures this year.
With the increasing fragmentation of media channels, many CMOs might be content to continue their traditional “agency of record” relationships, relying on one primary agency to coordinate an increasingly diverse marketing mix.
And with marketers now increasingly under intense scrutiny from CEOs and CFOs looking for tangible ROI before giving budget approval, and analytics being more sophisticated than ever, the need for marketers to be more accountable to the bottom line is becoming increasingly important.
So does it really make sense for brand marketers to turn the keys to the castle over to a single agency?
The benefits of a multi-agency approach
To get more out of their agency investments, brands are beginning to outsource increasingly narrower slices of their marketing efforts to specialized agencies.
Because they are smaller and focus on a specific area of expertise – social media or custom content, for example – these agencies tend to be more agile and more adept at delivering services that meet brands’ specific campaign needs.
This best-of-breed approach offers three important benefits to brand marketers:
Accountability. Agencies that manage specific campaigns, channels or tasks can be tracked more accurately against campaign objectives.
Agility. Smaller agencies often possess a nimbleness that allows them to adapt quickly to changing markets and customer needs.
Targeted expertise. Vertical agencies focus on doing one or two things well, which means they often do these activities better than generalists.
Making the right agency choices
So how do marketing executives separate the wheat from the chaff when assembling a roster of agency partners?
Begin with your corporate objectives. Don’t allow an agency to pitch you on increasing gross rating points or impressions – metrics that don’t necessarily align with your business objectives.
Take the lead. CMOs should not delegate the task of managing agency relationships to mid- and lower-level employees. Overseeing multiple agencies requires a top-down view of how all the partners fit together and how they are expected to collaborate on various campaigns or other marketing initiatives.
Tough love. Don’t fall in love with your agency partners. Establish clear and frequent milestones by which to measure their performance, and if they’re not delivering, replace them quickly.
Playing the field
Marketing is undergoing dynamic changes that are forcing brands to view customer and client relationships through a new lens – one that requires the right message, delivered at the right time, through the right channel.
Rare is the single agency that can help brand marketers to deliver fully on that promise; instead, CMOs should develop a deep roster of agency partners that are nimble, accountable, and possess specific skills that drive results.
This piece is an excerpt from the new King Fish Media e-book “How to Choose the Right Marketing Agency,” edited and adapted for Sparksheet.