The revenue model that had once worked has since been disrupted by programmatic media buying and client expectations to get more for less. Business, as you know it, has changed. But have you altered your practices to adapt to this change?
In understanding how your agency might adapt, you should consider the following questions:
Does Your Agency Revenue Model Include Digital Buys?
I am not saying that traditional media will go away – it won’t, and it shouldn’t. But more and more of the marketing budget is being put towards digital media buys. According to eMarketer, by the end of 2016, US digital ad spending will represent 36.8% of total media ad spending while TV will only represent 36.4% (and that is in a year that saw both the Olympic Games and the US presidential election).
Agencies that spend the majority of their media dollars on “traditional” advertising buys will be left behind as clients become wiser to the benefits of digital media. Additionally, traditional agencies will lose out on the additional revenue potential that digital media brings to table by way of creative and strategic services.
Does Your Agency REALLY Understand Digital Media?
While digital media has become part of the mainstream marketing mix, many agency media buyers struggle to stay informed about evolving technologies. The way in which digital media is purchased is far different from how traditional media is purchased. If you try to apply traditional buying techniques to digital media, it just won’t work.
The management of digital media is also different. Automations in media buying combined with programmatic buying allow for real-time bidding, personalized advertising at scale and increased measurability. If your agency is not planning for, and reporting on, these then you are not efficiently managing your client’s digital media efforts.
Is Your Creative Personalized Based On Persona and Journey State?
Segmentation exists on two levels: persona and journey state. When these are applied to both media planning and creative development, you can deliver hyper-personalized marketing that not only addresses the target audience's wants and needs, but delivers it in a manner that they are open and receptive to based on where they are in the customer journey.
An ability to deliver messaging that makes the consumer feel understood, valued and connected has proven to result in a greater number of engagements, which will lead to increased conversions, as we can see:
- According to Multichannel Merchant, a MyBuy survey found that 40% of consumers buy more from retailers who personalize the shopping experience across multiple channels
- In a study of 650 multi-channel marketing campaigns, personalized campaigns consistently and overwhelmingly beat out static campaigns in generating a high response rate from recipients (MindFireInc)
- Leads who are nurtured with targeted content result in a 20% increase in sales opportunities (DemandGen)
Are You Reporting On KPIs?
For some of your clients, you may not have the opportunity to track direct conversions. In this case, relying on leading and trailing indicators can allow you to report on metrics that are aligned with their business goals.
Once you have identified what you are going to measure, and you have put the ad technology in place and started collecting data, you will come to your next hurdle: figuring out how to report on these metrics accurately, consistently, and in a way that your agency’s value can be clearly communicated to your client. The key is to make sure that these KPIs, which should always tie back to organizational objectives, act as both an action (something you are working towards achieving) and a measurement (something that communicates the contribution that your efforts have made).
Are You Able To Provide The Transparency And Reporting Your Clients Demand?
But it does not necessarily follow that if your client demand these reports you will be able to deliver them. Not only do clients want to know about the media that has been bought on their behalf, they also want to know where it was placed and how much it cost. In addition, they want to see the ROI, to prove that the buy and placement were worth the spend. All of this requires a degree of complex tracking and comprehensive reporting that many agencies do not have the experience, or comfort level, to provide.
Transitioning To A Profitable Agency Of The Future
To deliver what your client wants, you need to add talent. There are two options for adding talent: either hire in-house staff to fill the gaps you have identified, or partner with a marketing consultancy that can bring extensive knowledge and experience to the table (and can easily be scaled, based on your workload).
Interested in seeing if our marketing consultancy can help measure and optimize your digital efforts while providing insights that can be applied to your traditional campaigns? Schedule a free, 30-minute call with us today.