Forrester: Few Brands Make Just One Stop For Interactive Shops

Despite the appeal of one agency handling all of a brand's digital duties, an increasingly complex and specialized marketplace requires that marketers tap multiple agencies to execute their interactive strategies. That's according to a new report from Forrester Research, which finds that multiple agencies are key to success because interactive marketers need to outsource certain skill sets, and because agencies help marketers stay ahead of the curve in a fast-changing industry.

"The complexity of the interactive landscape is creating a fragmentation of interactive agencies, which in turn is creating a whole new set of challenges to marketers," said Forrester analyst and the report's author Sean Corcoran. "Interactive marketers should prepare their organization for even more agency partners and educate their procurement teams on the value of these relationships."

According to the report, interactive marketers have a wide range of responsibilities, so it makes sense that they typically rely on their agencies to cover a wide range of services from creative, to Web development, to search marketing and more. Yet, technology has forced the overall agency landscape into flux, and this creates challenges for marketers.

Four out of the five interactive marketers surveyed by Forrester between August and September reported using at least one agency. Agencies have to cover a wide range of responsibilities, and have in fact built specialized skills to help fill the gaps in their capabilities. Yet few agencies, if any, can offer best-in-class services to meet all of their clients' needs, according to Corcoran. "More than half of the marketers we surveyed use at least two agencies for interactive services, and one out of four use three agencies or more," he said. "Yet most interactive marketers would prefer one agency to handle it all."

Interactive marketers need agencies to keep them ahead of the curve, as one of the major roles of an agency is to stay abreast of the emerging trends in the industry and educate its clients.

According to Forrester, agencies are typically in a better position to do this than their clients because the agencies often have dedicated teams working across several clients at once. What's more, many agencies invest heavily in these areas. For example, R/GA has Future Vision, a team dedicated to providing its clients with a perspective of the digital world in the near future to help them prepare their strategy.

Unfortunately, most interactive marketers don't feel they can turn to their traditional agencies for much help. Only a quarter of the interactive marketers Forrester surveyed said they believe traditional brand agencies are equipped to handle digital work.

And while some agencies with traditional roots have grown successful digital capabilities, many still lag behind, leaving interactive agencies with significant opportunity to make inroads in their clients' businesses.

As technology's role in marketing continues to become more important, it also is creating a fragmentation of media consumption and a complex landscape overall, according to Forrester.

While interactive marketers mostly use their agencies for staple services like creative and Web development, the agencies are beginning to adapt and take on new roles outside of their typical walls.

For instance, one out of four interactive marketers Forrester surveyed reported using their interactive agencies for brand strategy, while 26% reported using them for offline creative. To boot, nearly one out of three reported using their interactive agencies for social marketing.

While all are necessary evils, Forrester does concede that more agencies will lead to more administrative work, higher costs, and more reliance on "the often dreaded" procurement team.

Also, while the big agency holding companies such as WPP, Omnicom Group, Publicis, and Interpublic offer their clients a wide selection of agencies, most of the marketers Forrester surveyed aren't taking advantage of the offering when it comes to their traditional brand agencies and interactive agencies.

Only one out of four interactive marketers that Forrester surveyed had primary interactive agencies that were affiliated with their primary traditional agency.

Meanwhile, less than one in four of the interactive marketers surveyed by Forrester believe they were ready to assume full responsibility for a brand's livelihood.

3 comments about "Forrester: Few Brands Make Just One Stop For Interactive Shops".
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  1. Aron Anthony from Digitas, December 8, 2009 at 7:32 p.m.

    "Best of Breed" vs. "One stop shopping" is a much debated topic. Each model has advantages and disadvantages. Don't know whether Forrester looked at the issues with best of breed approach. One of the biggest issues with best in class agency model is the “silo”ed approach. Marketers lose huge opportunities by not being able to measure the effectiveness of the whole brand holistically. Recommend reading Steve Smith’s Media Post article Attributing Behavior 'Wholisitically'.

  2. Tom Cunniff from Combe Incorporated, December 9, 2009 at 1:37 p.m.

    I agree with Aron -- there are definite trade-offs with either model. But as a client even if you go with a "Best of Breed" Interactive agency (and Digitas is one of the best), your marketing is still in silos. What about the impact of the other 80% or more of your spend that remains in traditional?

    I've worked in traditional, digital and now I'm on the client side. Having seen a 360 degree view of this, I'm more convinced than ever that marketers must take the lead across all these silos to drive results. No matter how much they want to be, the agencies can't be entirely objective. Every agency will be passionate about their specialty (if they're not, they can't be good at it) and every agency is in business to sell more of what they do.

    The tough part is that marketing organizations often lack people who have enough experience across silos to leverage their best opportunities.

    Is it time to create the position of Chief Brand Integration Officer?

  3. Aaron Savage from Interactive Mix Ltd, December 10, 2009 at 6:18 a.m.

    Part of the problem with online marketing, is that it has a preoccupation with 'the new'. For me, next year is important but it definitely shouldn't be about what tool is going to grab the headlines next. To me it should be about how to create a joined up <a href="http://www.interactive-mixcom/imix.html">digital marketing strategy</a> as a whole solution to clients.

    We have had digital marketing around now for nearly fifteen years. Since that time various boutiques have grown up as markets peaked and dived, so we have web design, email and eCRM, Social Media, Display advertising, Search etc. All of these are fine as tactical solutions but that isn't what clients are asking for.

    Clients are asking for someone to come along and start with a bunch of people who have never heard of Brand X and create a journey using digital media (all of it) that moves them along to first purchase, regular purchase, retention and referral.

    Social Media is a part of that, but it is only a part and it is a tactical part not a strategic part. The strategy is to win more customers, or retain more customers, or win more referrals, or increase customer spend and regularity of purchase.

    We launched our <a href="http:///www.interactive-mix.com">digital marketing agency</a> with this very aim in mind a year ago and at the time I used to look out at blank faces as I tried to explain why clients needed a complete solution and not just a ‘web guy’, but as the year has gone on more and more people now look back at me with understanding and agreement on their face, so I am definitely hoping that this is the year that digital finally grows up and stops being led by fads.

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