The Agency Landscape Is Coming To A Crossroads
by Sean Corcoran
Today we published the Forrester Wave™: US Interactive Agencies – Strategy And Execution, Q3 2009. The objective of this wave was to identify the top interactive agencies in terms of their ability to develop interactive strategy as well as their capabilities in executing that strategy across services. Evaluating the top interactive agencies in the US is a rigorous task. After screening over thirty of the top agencies on AdAge’s “Top 50 Digital Ad Agencies” report, we ended up selecting twelve firms. The goal was to identify the biggest and most visible agencies in the market. The agencies we ended up selecting included Digitas, Razorfish, AKQA, R/GA, Draftfcb, OgilvyInteractive, Sapient Interactive, Rapp, Wunderman (specifically ZAAZ), Organic, VML and Rosetta. While we recognize there are probably dozens more interactive agencies that have a claim to the label of large (and capable) full-service interactive agency, these twelve agencies best met the criteria. When it was all said and done we identified R/GA, VML, OgilvyInteractive, Sapient Interactive, Wunderman, Razorfish and Organic as Leaders in the space. Rapp, Draftfcb, Rosetta and AKQA weren’t far behind as Strong Performers. Digitas declined to fully participate, but we did interview them and consider them at least a Strong Performer.
At Forrester we’ve been expanding our coverage of agencies, specifically related to interactive marketing, and after publishing this wave and our most recent wave on web design one thing is clear – interactive agencies have reached a point of maturity (hence so many leaders). They are at a point that their clients are more than happy with their performance across most of the major criteria in the evaluation. In fact, of the 33 different marketers we surveyed the average score for overall performance was 4.3 out of 5. While there were some very clear and some subtle differences between all of the agencies, most of them scored well in criteria such as strategy development, audience insight, execution & development, emerging & social media and analytics. However, though most of these agencies have built sophisticated analytics teams, they still have work to do in this area as the average score for that criterion by client references was approximately 5% lower than the scores for other criteria.
Maybe even more significantly, we are seeing the agency landscape in general coming to a cross roads. When you consider the fact that traditional budgets are getting slashed, that interactive budgets are expected to grow significantly in the next five years and that technology is becoming more and more integral to marketing overall, you can see how the role of agencies will continue to evolve. Interactive agencies therefore have an enormous opportunity to play bigger roles for their clients and are already beginning to do so. However all agencies are adapting and are now competing more than ever. We already see this playing out as interactive agencies, PR agencies, traditional agencies, media agencies and specialists are all vying to take the lead in social marketing for their clients.
So what does all this mean to interactive marketers? Well for one you can take solace in fact that the leading agencies in the space are considered more than competent by a large group of your peers. However, take note that an already complex industry will continue to get more complicated. We’ve been working several marketers on their agency portfolios lately and taking these few basic steps upfront helps immensely:
- Get your ship in order first – “interactive marketing” means a lot of things, if you have your objectives and even an overall digital strategy in place then it will be much easier to give clear direction to your agencies
- Know the agency’s heritage – while many agencies have successfully expanded their expertise in new areas, we find that most agencies are strongest in their heritage (in their “DNA” as one senior agency exec recently said to me). For instance, R/GA is still great at design and innovation, Sapient is still great at technology and Wunderman is still great at direct marketing. It helps to match their heritage to your needs when evaluating agencies
- Set clear roles – If you have your objectives and strategy set and you know your agencies’ capabilities, you should then be able to set clear roles for each agency partner to help eliminate the agency infighting