Commentary

Self-Sufficient Marketers a Challenge to Agencies

by Jack Loechner , Staff Writer, April 27, 2010

According to the Chief Marketing Officer (CMO) Council's latest State of Marketing Report, corporate marketers expect to become less dependent on agencies and more self-sufficient with their own internal digital marketing infrastructures, talents and go-to-market capabilities. 46% of those surveyed said that investing in digital demand generation and online relationship building ranks among the top initiatives being taken to maximize the impact and value of marketing in 2010. 38% say they are exploring alternative media and new routes to market; 62% will be crunching customer data to improve segmentation and targeting. Most of this will be done in-house or by specialist firms and outsourced service providers in the digital marketing and customer analytics space.

This annual Marketing Outlook Audit, involving 46 questions of more than 600 senior marketers drawn from every major region of the world, is representative of most vertical industry sectors and company sizes. Almost 63% of respondents said they reported directly to the CEO, president or COO, while another 21% said they were accountable to a regional vice president, general manager or division/business group head.

35% of marketers expect to initiate or undertake transformational marketing projects to improve go-to-market effectiveness in 2010. Another 19% say this is under consideration, and 8% report this has been proposed but not approved. Most common among the projects to be undertaken are:

Digital marketing makeover - platforms, programs people (46%)
Sales and marketing organizational alignment (40%)
Customer data integration and analytics (32%)
Marketing performance measurement (31%)
Lead qualification and harvesting system (28%)
Reorganization of marketing group (28%)

Donovan Neale-May, executive director of the CMO Council, observes that "... the transformation of marketing organizations, practices and functions... is being driven by the need to engage at an individual level, create more content relevance, and leverage... Internet communities, omnipresent connectivity, and pervasive mobile device ownership."

Attesting to the growing shift to digital modes of engagement, says the report:

59% of marketers are looking to train and develop existing staff
40% are adding or expanding digital marketing agency support
36% expect to bring in new talent resources to their organizations
72% of marketers anticipate no headcount reductions as they re-skill staff
18% expect to review web design and development resources
8% who plan to do ad agency reviews, an all-time low, as marketer attention moves to the digital realm.

Morgan Stewart, Principle of the Research and Education Group at ExactTarget "Companies looking to improve their online capabilities... must find.... people with a successful track record online... who are not only good themselves, but have the ability to train others..."

Asked to rate their online marketing performance capability, only 6% of marketers responded excellent:

44% report they are either growing their capabilities, or struggling to quantify the value of online marketing spend
15% say their ability to convert site visits to customer leads is deficient

In reviewing where digital marketing dollars are likely to be directed:

65% of respondents said they were evaluating investments in new social media and online communities
44% in Internet media channels
33% in mobile messaging
31% in new methods of online content delivery

Requirements for greater top-line growth in 2010 are reflected in how demand generation, sales support and advertising dollars are being directed. Largest shares are being allocated to:

Database marketing (12.5%)
Sales collateral/literature (12%)
Trade shows and conferences (11.5%)
Online advertising (7%)

In contrast to 2009, most marketers are seeing their media budgets stay the same or increase slightly by 5%. Larger gains of over 5% are reflected in interactive/web marketing, social media, search marketing, SEO, and mobile communications areas.

Additional information from the release, including access to the complete report, may be found here.

advertiser-agency relationship, digital, marketing, research

2 comments about "Self-Sufficient Marketers a Challenge to Agencies".

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Juli Schatz from Image Grille, April 27, 2010 at 9:33 a.m.
I'd be willing to bet that, like newspapers, ad agencies have been slow to accept the fact that the world has changed.
In fact, I recall a story 3-4 years ago about the keynote address delivered by the head of the American Association of Advertising Agencies at its annual conference, in which he chastised attendees and the industry in general for being woefully behind the times as far as social and digital marketing.
Like the newspaper industry, ad agencies seemed to believe they could carry on with business as usual, that clients would somehow "miss" the rapidly changing marketing milieu.
So now, I'm sure no one is more surprised about the findings of this report than the denizens of the big agencies that have had it "their way" for decades.
Today's do-it-yourself marketing means that ad agencies had best start brushing up on modern advertising and marketing techniques and stopped depending on that nice fat 15% commission they used to bring home.
Reply

Chris Vinson from Vinson Advertising, April 27, 2010 at 12:02 p.m.

If your agency's media planning can't overwhelmingly save money for your client you shouldn't be in this business. In- house businesses should not even be close to being able to out perform you in social marketing ability or creative either.

Having said that, of all of the hundreds of accounts I have been exposed to that were in-house none were more cost effective than what we have been capable of achieving on a CPM basis.

They believe they are saving because they get a 15% discount but they usually are paying 40% to 100% more than we would for the same media and they don't want to look at it objectively. In-house media buyers drive our costs up by paying too much.

Agencies have the advantage of multiple clients. They know what the media market will do better than an in-house marketing department which only has one client.

Also, most truly talented media people would prefer to work on the agency side. Demand more from or change your agency if you feel they could do more, but I believe giving up on them will stifle your creative, social marketing and cost you big on media expense.

Best of luck and skill with your venture.