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The “Agency of the Future” or Bust: A Look at Data, CX, and Tech

Posted by Mark Duval on Apr 12, 2018 6:45:38 AM
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Agencies have been adapting to change at an exhausting pace. Some of the biggest changes on the horizon relate to data and technology. These terms appear again and again in descriptions of what marketers want from “agencies of the future.” What does that mean, and what will that require of your agency?

agency of the future

Many creative agencies are challenged simply tying their case studies to data that demonstrates business results. Can excellent, even award-winning, creative be enough, by itself? Excellent creative may always be in demand, but can creative that’s divorced from data rightly be called “excellent,” and if so, for how long? Brigitte Majewski, VP and research director for Forester has said that the creative-only focus of many traditional agencies isn’t going to work anymore, that “the future will be about marrying creativity with data” (AdAge).

Enter 2018. Nearly everything “future” for agencies is data and technology. Data and tech-dependent CX (already a major marketing priority) is also projected to be huge in the coming years. According to Forrester (via Adobe), “agencies must embrace marketing technology and data as core competencies to survive. Keeping pace with technology is not enough,” (Adobe; Mediapost). If that’s true, and you don’t intend to roll over and await the death of your agency, you will need a plan of action.

Adobe’s Future of Agencies study (pdf) concluded that “the agencies embracing marketing technology and data will prevail.”

data and technology skills for agencies

Here’s what you need to know about what marketers are looking for from agencies related to data and technology (including customer experience, or CX):

Develop strategic technology partnerships

How should you acquire your data capabilities? Andrew Essex, former CEO of Droga5 suggests collaborating with (vs. competing with) “tech giants in the data space” (AdAge). Forrester also bets on collaboration with tech firms, speculating that “the most successful agencies will be cross-channel data experts who create new sources of value for clients through strategic technology partnerships (Mediapost).

These technology partnerships are an opportunity for agencies to create new sources of value for clients. When Adobe asked marketers how agencies can help them achieve their priorities over the next three years, 53% said “developing partnerships with technology companies that give marketers access to innovative solutions.” Marketers want agencies that have strategic technology partnerships in place, with nearly half of them (48%) saying they will consider agencies that leverage technology partnerships over those that do not (Future of Agencies, via Adobe).

If your agency can’t develop data and technology competencies quickly enough or well enough, explore partnerships with other providers that offer these services.

Desired competencies

Competencies said to be in demand now and for the future include:

  • Data strategy
  • Data analytics technology
  • Marketing technology
  • Advertising technology
  • Experience design
  • Technology integration
  • CX-supporting services
  • Cross-channel personalization
  • Cross-discipline and multi-stage digital experience development
  • Seamless multichannel and omnichannel marketing

Marketers are specifically asking agencies to develop these as core competencies, rather than skills they are generally versed in. Additionally, marketers want help from agencies to “enhance [their] digital competencies to drive differentiation,” (Future of Agencies, via Adobe).

As it stands, marketers are “less than fully satisfied” with agencies’ abilities in the data and analytic space, (Forrester survey, via Mediapost). That’s a good thing because it means the opportunities to develop better offerings are still ripe for agencies. When it comes to data and CX, brands are looking to agencies for help collecting and managing a single, unified layer of data, to discover insights and build strategies from that data, and then execute those strategies across digital channels (Forrester Survey, via Adobe).

Adobe has suggested that agencies may even have an opportunity to differentiate themselves by focusing only on delivering quality CX (Future of Agencies, via Adobe).

What types of agencies are likely to be most in demand?

Fewer marketers use creative agencies for CX services, compared to digital agencies. When they need experience design, marketing technology management, and web and mobile development, they typically choose digital/interactive and specialist agencies (Future of Agencies, via Adobe). For that reason, digital agencies have an edge here.

When it comes to specialization, both depth and breadth matter to marketers. A whopping 71% of marketers indicated that depth of specialization and data-driven cross-channel marketing are the most important agency qualities to them in the next three years (Forrester survey, via Mediapost). In another survey, Adobe found two-thirds of respondents (67%) considered depth of specialization important or critical, while 60% said the same about breadth of service offerings (Future of Agencies, via Adobe). That means agencies must have deep expertise in a handful of data, CX, and technology areas, or they need to offer end-to-end multidisciplinary services to remain competitive. Or have some other plan in place to offer those services effectively, such as through an affiliated agency.

What does the future look like for agencies that don’t adopt data and tech? Is there any room for them?

Other influential factors for agencies of the future include agency size (smaller, specialized agencies and larger all-in-one shops are predicted to fare best), big ideas, and diversity. These are among the qualities described for the “agency of the future” in Lindsay Stein’s recent AdAge article.

That said, it’s hard to view any of those factors as so important that they would negate the need to be versed and ready with expertise and partnerships on data and technology. Penny Price wrote about this in AdAge over a year ago, but it’s unclear whether the new reality has fully sunken in yet, particularly while so many other industry changes have been taking place.

What is your agency doing to prepare? Do you think the importance of data and tech is overblown? Join the discussion on social media or in the comments.

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Image credits: Agency of the future © / chombosan; data and technology skills for agencies © / solarseven.

Topics: Agency New Business

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