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ON: Digital Shops That Take Control

gravatar
 · 
February 28, 2007
 · 
2 min read

THE WEB AND RELATED DIGITAL technologies
are exposing major weaknesses in traditional agency skill sets,
according to a study released yesterday by Forrester Research.

This trend, the study finds, is working in favor of specialist digital
shops, which marketers are increasingly calling upon to fill skill
gaps.

Gavin O'Malley @ Media post writes:

"Marketers first
turned to digital specialists to build Web sites during the dot-com
bubble," explained Peter Kim, Forrester Research analyst and author of
the report. "Now, the specialist trend has expanded as marketers seek
fresh approaches from digital shops--like Avenue A | Razorfish and
Critical Mass--as well as creative independents--like Modernista!,
Tugboat, and Mother--eroding the core value proposition of traditional
ad firms."

Digital agencies, Kim noted, have even begun winning "traditional"
agency work as in the case of Agency.com, which has created print and
outdoor ads for IKEA United Kingdom, and AKQA, which now serves as
Yell.com's main agency.

Beyond confirming what many have long suspected, the study illustrates
a major rift between marketers and agencies with some harsh survey
results: On aggregate, agencies scored a dismal Net Promoter rating of
21%, showing just how few marketers in the fourth quarter of last year
would have recommended the same agency services they themselves pay
for.

"Today, agencies must deliver technology--in addition to
creative--expertise, and many traditional agencies struggle to adapt,"
Kim said. Indeed, according to the study, marketers today view ad
agencies as the least competent among service providers to deliver
marketing technology.

Huge gaps exist between marketer and agency perceptions of the ability
to deal with changes in TV, Internet, and consumer-generated media,
according to Forrester. To illustrate his point, Kim points to recent
agency blunders like Wal-Mart's fake blogs (the product of a PR agency)
and GM's Chevy Tahoe user-generated ads.

Forrester fielded a survey with the American Marketing Association and
interviewed eight vendor and user companies, including: Avenue A |
Razorfish, H&R Block, Hill Holliday, JWT, Kia Motors America, and
Xerox.

Notably, despite the fact that agencies wield influence over a majority
of the marketing budget, a whopping 76% of marketers do not measure the
return on investment of their lead agency relationship.

ON: Digital Shops That Take Control via @jpenabickley
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