Survival of the Fittest: The Marketing Agency Evolution

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Marketing is alive and well. It’s thriving, in fact.

While the landscape is certainly competitive, platforms and channels are increasing at record speed, meaning that accessibility is at an all-time high.

Why, then, are there constant threats to the health of the marketing agency? After all, the claim that marketing agencies are going extinct is hardly original. According to Scott Rayden of Marketing Land, “Marketing itself is alive and well. But the old breed of performance marketing agencies – channel-based, silo-shaped, pure campaign management performance agencies – is indisputably going extinct.”

If you’re wondering if I agree, all you have to do is take a look at some of my most recent blogs to get my very clear answer—Why You’ll Never Reach Your Audience Unless You’re an Anti-Channel Marketer, Blurred Lines: The De-Silo-Ing of Marketing, Dark Martec: The Need for Marketing and IT Alignment, the list goes on.

The fact is that the dynamic of marketing is changing significantly, and agencies that stick to their tried-and-true modus operandi will find themselves on the losing end of marketing advancements.

Marketing has taken on a life force of its own. And the accessibility of channels and platforms means that brands are catching up just as quickly, if not more so, than marketing agencies. By offering the opportunity to cut out the middle man—one of the most significant inefficiencies in former marketing models—the new dynamics of the marketing space are, of course, creating a whole host of variables that agencies must now overcome.

Darwinism and Marketing: Where Do We Stand Right Now?

Social Darwinism is the idea that humans face the same struggles of ‘survival of the fittest’ that plants and animals do in our day-to-day lives. This what we can see happening in marketing today. Like anything else in marketing, the rise of digital and its associated technologies is the primary influencer in the new marketing landscape, which is requiring extensive adaptation.

Aside from—or, perhaps more accurately, along with—these changes in digital, a substantial trend has arisen of big brands streamlining the number of agencies they work with. Price is a significant factor in this decision, as working with a single agency for a variety of needs is typically more cost-effective, and more efficient in general, than working separately with multiple agencies. Price is also showing to be influential in which agencies a brand chooses to partner with.

After all, now that remote working and collaboration is so accessible, it is just as easy for, let’s say, a big brand in New York City to work with a smaller and more affordable agency in the Midwest as it is for them to work with an equally large agency that is located more proximally. And while it may seem that working with a larger agency would be more beneficial, if these larger agencies are bogged down by siloed operations and heavy channel focuses, they will drag the brand down as well. On the other hand, a smaller agency that is built with agility and flexibility—and has the ability to scale quickly—will provide a brand with higher quality service for a lesser price tag.

In this situation size is certainly not the deciding factor, though. In fact, this new marketing landscape turns the idea that larger agencies are the default better choice on its head. It is structure, instead, that is emerging as the most important criteria for agency success.

Along with cutting down the number of agencies brands work with, some brands are choosing not to partner with a marketing agency at all. In fact, the number of brands that reported they are not currently working with any agencies doubled to 27% in 2015, according to eConsultancy.  This same study also found that more brands are bringing talent in-house to skip the agency middleman.

In other words—all the rules of how brands work with agencies are being broken. Given the oversaturation of the marketing agency space, it’s only fitting that some of these agencies are going to die on the vine.

Adaptation: Learning to Thrive in This New Environment

When it comes to surviving in this competitive landscape, agencies will find themselves needing to diversify skills across the spectrum of specialty areas. Being ‘just digital’ or ‘just traditional’—or just SEO, email, or what not else—will not be enough. Brands are looking for agencies that can function as partners by serving any variation of their marketing needs.

Accordingly, sharpening the knife on business strategy capabilities is quickly becoming a necessity for agencies that previously stuck exclusively to marketing skills . Thanks to marketing attribution technology, marketers and marketing agencies are now getting a seat at the executive table. With great power comes great responsibility, though, and keeping that seat at the table means connecting those marketing efforts to long-term business goals. For the agencies that can manage this, it will be key to separating the wheat from the chaff.

Ultimately, diversification, flexibility, and agility will be the qualities that set successful marketing agencies apart from their competition as well as the internal talent at brands.

Beyond this, though, agencies will need to take a hard look at the way the treat clients and client relationships. After all, being viewed as partner requires behaving like a partner. And a good partner—in business and in life—truly takes the time to get to know their significant other. Developing customer intimacy is a number one priority. Just as personalized marketing is becoming the standard for brands, marketing agencies must be able to personalize what they do for their clients according to that clients’ changing needs–as well as the needs of their clients’ audience. Cookie cutter solutions will not do the trick anymore. This will require working together more than ever before as brands and agencies begin to look equally at each other for guidance, feedback, and collaboration.

Brands Are Benefiting From Increased Competition and Personalized Service

While this article may be a little bit of a doomsday prediction for some agencies, it ultimately is good news for those on the receiving end of agency services. Brands are now afforded more control and more options than ever when it comes to how they want to take on the challenge of marketing themselves. And with the adoption of more internal talent, they are increasingly able to create their own content and manage their own marketing efforts. The smartest brands, though, will leverage the brand intimacy and reliability they gain from their internal talent against the wealth of resources and accompanying agility provided by agencies.

Luckily, the evolution of the marketing agency doesn’t mean that brands are moving from being forced to deal with one model to being forced to deal with a different model–instead, possibilities are expanding and, therefore, are allowing for more tailored capabilities. And in the same vein of evolution in nature, marketing survival of the fittest will result in stronger, more efficient agencies and happier, more productive brands.

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Did you like this post? Let us know why (or why not) in the comments. In the meantime, check out our blog Blurred Lines: The De-Silo-Ing of Marketing to discover why breaking down organizational silos is key to staying agile and ahead of your competition.

Victoria Grieshammer

About Victoria Grieshammer

Victoria Grieshammer is the Marketing Coordinator of Content Development at Fathom. Formerly, she was the Head of Marketing on the Fathom Manufacturing team. Victoria joined Fathom as an Associate Copywriter after graduating from Allegheny College with degrees in English and Psychology. Her previous experience includes e-commerce copywriting at Little Tikes and coordinating social media campaigns for small businesses, giving her a varied background in digital marketing. When she’s not at Fathom writing and learning, you can find her jogging around Cleveland or reading a book. You can also find her on Twitter at @Vgrieshammer1.

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