In June of this year, we released a comprehensive guide for mid-market agencies looking to thrive in 2019. This is the third article in our 5 part series that will detail the research results and our extrapolation of the key insights that continues to be relevant as we wrap us this year and head into 2020.
Recent marketplace trends have put increased pressure on advertising agencies—like the rise in the amount of business being rewarded on a project basis. While this puts increased pressure on agencies, it can also open opportunities for smaller-sized agencies to compete.
Further, the agency landscape itself is evolving. There is agency consolidation led by holding companies and now the entrance of Consultancies (e.g., IBM, Deloitte, PwC) as a very legitimate competitor. Such developments incentivize marketers to re-evaluate their existing agency relationships and assess whether they get maximum value. It is critical for agencies to understand this process, and lean into their capabilities and advantages that matter most to marketers.
Perception is a way of regarding, understanding or interpreting something; a mental impression. Often we can confuse perception with reality—that is, we mistake how we understand things for the way that they really are. Despite the overlap between our perceptions and reality, there is indeed a gap between them. According to our Advertiser Perceptions Survey, the perception that agencies have and the reality of their relationship with marketers does not entirely align. By comparing what agencies believe and how marketers rate them, it is possible to narrow or even completely close that gap.
Comparing Mid-Market Agencies with Mid-Sized Brand Marketers
If we look at how mid-sized brand marketers analyze the strengths and weaknesses of their agencies, we see there is an opportunity for mid-market agencies to strengthen their native. Mid-sized brand marketers place a 66% importance on native capabilities, while the mid-sized agency only believes that their strength in this area is at ~50%:
When we take into account the go-to-market capabilities agencies emphasize—a mid-market agency puts more emphasis on ad tech with 85% on targeting capabilities, 78% on Programmatic, 65% on machine learning, business intelligence at 78% and agency culture at 73%:
And when we compare them, some gaps surface that mid-market agencies can potentially capitalize on. The good news for mid-market agencies is that they rate well for many of the most important capabilities (indicated in the upper-right quadrant), though they lag in two critical areas: Targeting and Business Intelligence (BI). Targeting is critical for marketers who prioritize brand relevance and ad personalization. BI enables marketers to analyze and optimize performance, driven by ad tech, software and services. BI will be critical for marketers who seek to align with their customer decision journeys—from awareness through consideration, purchase, and ultimately brand loyalty.
Up the ante on your strengths. Don’t go it alone
New technologies come to market at a rapid pace and each one of them challenges marketers and agencies with the choice of where to experiment, where to invest and where to be patient. Just as you’ve established your agency-client relationship, lean on your technology partner to help if your agency is lagging in the two key areas above: Targeting and BI, or in any area for that matter. Technology should help, not hinder, your ability to excel in several of the capabilities above. With a breadth of clients spanning several industries and a team of experienced practitioners, your agency can continue strengthening these capabilities by leveraging those who can partner with you to provide a boost where you might need it most—and to help you win a bigger book of business.
Regardless of how wide the gap is, focusing on actually delivering what you say you’re going to deliver will impact your agency’s credibility and your personal credibility. Clients don’t really want to shop around—if you don’t come up short, you won’t give them a reason to start. So, as a mid-market agency, if you can accept the need to up your Targeting and BI strengths, you will be better equipped to align with the needs of your clients and your perception will be their reality.
In case you missed the previous two posts in this series, 6 Tips To Ensure Your Agency is Selected by a Potential Brand, and Mid-Market Agency, Large Scale Advantage: The Reasons They Win Business you can read them here and here. We will be revealing more of the invaluable learnings we gained from our Advertiser Perceptions research. Up next, the fourth installment of our 5 part series: A Look Into The Ad Tech Crystal Ball and The Future of the Mid-Market Agency.
For additional resources on targeting, check out Vertical Targeting Series: Intro to Building your Vertical Strategy, Putting 3rd-Party Audiences First: The What, Why and How, and 1st-Party CRM Data: The What, Why and How.
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