Econsultancy has released a new report entitled The Progression of Agency Value in APAC: Developing a Model for Agency Maturity in a Digital World.
The report, sponsored by Adobe, details the challenges faced by agencies within the region, in particular its diversity, the struggle clients face in choosing supply-side offerings, a fragmenting customer landscape and a lack of suitable talent.
While this is countered by the huge opportunities present within a huge and digitalising region, the report states that agencies which fail to address these challenges are unlikely to succeed in the long term.
The research, which focuses on the Asia-Pacific (APAC) region, is a follow-up to the first Progression of Agency Value report written by Neil Perkin and published in 2012.
The aim of this research was to identify how agencies in APAC can future-proof their businesses.
Building on Pine and Gilmore’s Progression of Economic Value model in their book The Experience Economy, a similar approach was taken to creating a framework that agencies could use to assess their progress in being able to offer value to their clients.
Pine and Gilmore’s Progression of Economic Value Model
In the original research, Neil Perkin drew a comparison to this model in which agencies progress from delivering services to creating platforms for customer experiences, and finally to guiding transformation within the client organisation itself and with the relationship that the client has with its customers.
Neil Perkin’s Progression of Agency Value Model
Based on an analysis of the agency landscape in the Asia Pacific, the research proposes a maturity model based on four pillars which can be cross-referenced with the stages above, from ‘delivering services’ to ‘guiding transformations’. The four pillars are:
- Digital media
A model for agency maturity in APAC
So, what does this mean for agencies within the Asia Pacific region?
Agencies need to move away from services that are easily commoditised to be successful
Given the fact that clients within the APAC region have been described as ‘promiscuous’ and quite eager to switch providers, agencies should steer away from a ‘race to the bottom’ in terms of competing on services which can be easily provided by others.
Instead, they should focus on offering a bespoke and customised offering which makes them an integral part of their clients’ operations.
Agencies should ensure all work is tied to goals and objectives
If it cannot be clearly and easily seen how an agency’s services are directly tied to the bottom line, there is a risk that companies will find it easier to dispense with their work.
Tying services to objectives requires close communication and the effort to become a strategic partner. In terms of the maturity model, the agency “guides transformations” to achieve competitive advantage for their clients.
Agencies should look to grow their capabilities in each of the four pillars above
By assessing themselves against the maturity framework, agencies can identify where their strengths and weaknesses are in terms of how they offer value to clients in an environment where digital touches every aspect of business. Through this they can work to improve and better position themselves in a dynamic and constantly evolving region.
What are your thoughts on the agency landscape within APAC? How can agencies differentiate from each other? Have you had any successes or failures?