Tech Firms And Consultancies Are Winning Digital Marketing

Interesting reading for the weekend arrived on Friday, and it suggests digital marketing is in rude health.

The annual "Top 100 Digital Agencies" report from Econsultancy is a useful guide for industry players to see where they appear in the table, and as a disclaimer, I should point out that I write articles for the company, including one added to the report. 

The big news for me this year lies in the figures I had no part in researching, but not necessarily in the headline numbers showing impressive growth.

But that overall growth level is worth covering off first.

As with all things involving digital marketing, the outlook remains sunny. Total billings from the top one hundred have risen from GBP2.8 to GBP3.2bn. It's a 15% rise for 2019 which is not quite a as much as the 20% uptick between 2017 and 2018, but in a turbulent year, you are unlikely to find an industry that would be disappointed with 15% revenue growth.

This growth looks set to continue next year with nine in ten agencies predicting more income next year, with more than two in three agreeing the rise will be up to either 10% or 20%,  in keeping with the growth seen over the past two years.

The good news comes with a secondary finding, however, and whether people look on it as good news will depend on whether they are a top 10 agency or one of the other 90. 

Take a closer look at the figures and it becomes clear that the top ten are pulling away from the rest of the pack.

Looking at fee income since 2015, the top 10 agencies have more than doubled their average earnings from GBP73m to GBP185m. Meanwhile, for the other 90, growth has been more steady, a 50% increase from GBP10m to GBP15m, on average.

The trajectory of the chart showing the rest of the pack as a slight incline compared to the steep rise of the big names in the industry at the top of the league table speaks volumes. 

The identities of those at the top of the pile make interesting reading because in the main, they are the tech players and consultancies.

Accenture and IBM top the overall "Top 100" with an acknowledgement that the huge consultancies are always likely to dominate because they are already massive and they offer a far wider array of digital services, compared to digital agencies that will generally have a speciality.

The only holding company agency that makes it into the top 10 is Dentsu's Merkle -- Digitas and Tribal make it into 11th and 12th spot for Publicis and Omnicom, respectively.

So that means the top 10 who are pulling away are generally massive technology and consultancy firms such as Atos, Capgemini and Cognizant Interactive, which make up the top five, behind Accenture and IBM. 

The big guys are pulling away and those big players are not, for the most part, agencies working within the big holding companies as one might expect.

The massive money that is following this breakaway group is going to tech firms and consultancies, not the digital offerings from the familiar names in advertising. 

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