Brands are increasingly looking to work with specialised agencies for digital services, rather than 'agencies of record', as they fight to stay ahead of – and even just keep up with – the game.
At the same time, more advertisers are doing away with agencies altogether, with 13% managing all processes in-house. This number has grown for two years running.
These latest trends are revealed in the latest SoDA (Society of Digital Agencies) Report, which states: “More and more of the responsibility for digital marketing efforts is resting with brands.
“While this trend is no doubt a cause for concern, we're not yet seeing it translate into noticeable changes in the budgets that clients are allocating for the companies that touch their digital initiatives.”
Compared to the 2013 study, 17% more respondents pointed to the demise of the traditional 'agency of record' relationships with clients. Fifty-seven per cent of agency respondents said they believe AOR relationships are disappearing.
User experience was cited as the biggest client-side weakness, with 77% of agencies stating it is a shortfall client-side.
Chris Buettner, SoDA executive director, said: “Clients are doing more digital in-house than ever. But increasing levels of sophistication and elaborate in-house digital teams do not have to translate into diminishing revenue for digital agencies. The opportunity is in data, mobile and product innovation – areas of high demand.
“Digital agencies that provide the core value trinity – creative marketing, innovation and expertise in emerging trends and opportunities – can more deeply embed themselves in internal client teams, build stronger digital expertise across marketing and customer experience, and continue to prosper in 2014 and 2015.”
The new edition of the global report, which is conducted annually, attracted 736 respondents. Twenty-one per cent of them were from the APAC region, with 36% from North America and 22% from Europe. About half the respondents were from agencies, and about half client-side.
Read the full SoDA Report here.
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