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Advertising agencies may be shifting toward becoming one stop shops for online and offline advertising needs, but marketers aren't buying just yet. According to a new study from Forrester, only 23% of digital marketers think that traditional shops are capable of executing interactive marketing.
But digital shops aren't taking over the world just yet. According to the study, interactive marketers aren't ready to put their whole brand in the hands of digital agencies. Forrester says there is a "great race" going on between digital and traditional agencies to win the accounts and confidence of major brands. But the idea that there can be a one-stop-shop for all advertising needs may be wishful thinking as goals and channels diversify.
Forrester interviewed about 100 global interactive marketers for the study. Only 23% thought their "traditional brand agency" could effectively plan and manage interactive marketing activities. About 46% thought they couldn't do it, and the rest didn't have an opinion either way.
Forrester's study also found that few clients are willing to give digital agencies responsibility for their brand's entire direction. Just 22% agreed that their interactive agency is "ready to lead my brand." Another 33% said their digital shops weren't ready. The rest were neutral.
According to Forrester, clients would prefer to work with one agency for all their needs. Over 60% said they would like to use one digital shop. But they don't see that option now. Even within digital, the study found that only one in five clients rely on a single provider. Almost 60% have two or more. Forrester expects that these numbers will fragment even more with emerging media like mobile and social. But the multiple-agency approach leads to higher administrative costs and more coordination.
Sean Corcoran, Forrester
analyst and the report's author, tells MediaPost:
"The complexity of the interactive landscape is creating a fragmentation of interactive agencies, which in turn is creating a whole new set of challenges to marketers. Interactive marketers should prepare their organization for even more agency partners and educate their procurement teams on the value of these relationships."
Digital agencies have made big strides over the last few years, but it's still unclear if large firms will subsume smallers shops into their offerings or if smaller agencies will grow from within. Just last week, digital agency R/GA was named creative agency of record for Ameriprise Financial, which spun off from American Express in 2005. The company's branding was previously handled by Saatchi & Saatchi and Mindshare. But traditional brands are also supplementing their offerings by acquiring digital agencies. Also last week, Korea's biggest ad firm, Cheil Worldwide, acquired eight year old New York based digital agency Barbarian Group.
"We're all waiting for this big moment when a bunch of interactive agencies take over from the traditional guys," says Corcoran. "It's not happening that way, it's a slow evolution. You'll see some interactive guys take over and some traditional agencies hold the fort."