Commentary

Are Digital Production Companies Yet Another Thorn in Agencies' Sides?

As if there weren't already enough reasons that most agencies should just pack it up and call it a day, the trend toward brands going direct to digital production companies for one-off quick hits and even more lasting work continues. Of the shift, Altimeter Group Analyst Rebecca Lieb said: “It’s about hiring execution. Agencies do a lot of strategy and ideation, which is sometimes not what you need. Sometimes, you just need to get stuff done.”

ShareAbility CEO Tim Staples adds: “The Internet has changed everything in terms of how consumers find, curate and watch branded content, and this is putting tremendous pressure on traditional ad agencies. Succeeding at YouTube requires an expertise that most general ad agencies don’t have, and the smart ones are not willing to risk a $50 million account for a $500,000 piece of content.”

Is it time for holding companies to swoop in and buy the likes of ShareAbility? Or perhaps, launch their own divisions to create bite-sized content? As much as things are shifting in this space, not everyone is convinced. Rapt Media's Erika Trautman said: “Where the production companies can fall short is if the brand is in need of a greater strategic vision, including distribution and how you’re going to get in front of your target audience. I have seen production companies lose business because they can’t compete at that level.”

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