Digital marketing has evolved over the years, and what agencies look like today is not the same as they looked five, ten or fifteen years ago.
The time has come again where agencies must adapt their services to fulfill the needs of their clients. There is no one size fits all approach to digital marketing and, now more than ever, companies require a unique mix of internal and external resources to achieve their digital marketing goals. Every business is different and, depending on factors such as company size, sector, digital maturity, and strategic goals, the role they require agencies to play can drastically vary.
While the need for flexibility was already growing, budget cuts, and even job losses as a result of the pandemic, means many companies require greater flexibility on both a short- and long-term basis, as the mix of internal and external resources may be required to change at short notice.
There have, and always will be, brands who prefer to do all or most of their marketing in-house, rather than outsourced agencies.
There are also brands who prefer to outsource most or even all of their digital marketing activity to one or multiple agencies, with all channels reporting to a single person or team in-house.
The majority of businesses will sit somewhere in the middle of the spectrum, using a mix of both in-house and agency resource to get the benefits of both options (such as the tools and channel expertise agencies are known for, and the brand expertise that comes from being in–house).
Historically, the use of agencies versus in-house teams swings back and forth. There are years when preference turns to in-house, and years when outsourcing is seen as the way forward.
Even with these trends in play, there has never been a clear-cut winner: neither in-housing or outsourcing has come close to capturing 100% of the ‘market share’.
The traditional digital agency model is geared towards managing outsourced campaign work. When search marketing first arose, there were few brands who had in-house SEO or PPC knowledge and so they turned to agencies to manage these channels in full.
Over time, this has changed; as the industries became more widespread, brands have had greater access to hiring in-house specialists. Advancements in the industry’s tools and tech has meant brands are able to get results in–house, even without expert knowledge – a great example of this is Google’s implementation of automation in features such as Google Ads’ smart bidding which makes it easier to get excellent results.
Rather than making agencies redundant, this has simply changed the role that agencies are needed to fulfill. Instead of managing entire channels alone, agencies may now be required to work alongside these in-house experts to fill in the gaps with knowledge, tools, or resource.
There are some things that clients will always struggle with when relying on internal resource. For example, advanced skills, such as data science and data engineering, are hard to come by and these pools of expertise can typically be found in agencies where access to technology leaders and ongoing training is more commonplace.
Many niche tools and technology are costly, and it is often cheaper for brands to work with agencies who already have access to these tools, rather than subscribe to each tool themselves.
In addition, agencies often have better wider market knowledge and channel expertise from working with multiple clients across multiple projects, and agencies also have flexible resourcing across a wide range of skills. It is often better value to work with an agency who can resource across channels and skills, then to hire multiple individuals in-house.
Pre-COVID-19, there was already a growing change in how brands use agencies, but the pandemic has accelerated this client-side need for flexibility.
Many industries suffered financially during the first few months of lockdown, which for some businesses might mean losing access to key resources at short notice. In these situations, having an agency that can step in and adapt the services they provide or cover more areas can ease the burden placed on in-house teams, particularly if they face recruitment freezes as a result of budget cuts.
On the other side of the scale, businesses who are doing well now have access to a job market with more specialist skills, as many marketing experts both in-house and in agencies have found themselves back on the job market as a result of the pandemic. Companies may use this to build expert in-house teams where previously they were unable to, which can reduce the amount or type of work they need to outsource to agencies. Having an agency who can adapt the service they provide, for example to consultancy or training, can mean the difference between retaining an agency or cutting ties completely.
The role of the agency has always been whatever it is the client needs, but the needs of clients have adapted and diversified, which means agencies need to step up and improve their offering.
The role of the agency could be any one or more of the following:
Flexibility is crucial; not only do different clients want different services, how they utilize agencies may need to change over the course of the partnership. Services may be needed on an ongoing retainer or on one-off projects, and budgets may need to be moved fluidly between different services at different times of the year or to achieve different goals.
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