However, with overall growth slowing from 2018 – unsurprising, considering the current political and economic climate – the industry is facing a few uncertainties.
So, what will 2020 look like for digital agencies in the UK?
Econsultancy recently held a roundtable in partnership with MIQ at Econsultancy Live, discussing the state of the industry, and the challenges and opportunities that lie ahead. Attendees (all from leading organisations, whose identities have been protected under Chatham House Rule) shared their own opinions as well as insight into how their own agencies are faring.
Here are the biggest talking points from the discussion.
Agencies and consultancies are struggling to define themselves
The group opened the discussion with the topic of consultancies versus agencies – specifically, how the lines between the two are blurring. Questions included what the difference is, and how agencies are trying to navigate both creative and the delivery of services.
Overall, the discussion seemed to reflect a widespread confusion, suggesting that both agencies and consultancies are struggling to define themselves. Is the industry going through an ‘identity crisis’ of sorts?
One participant asked: “Is the perception still that consultants are more involved in strategy, and agencies are more involved in delivery?”
Most agreed, noting that consultancies are increasingly blending the two elements, and creating a hybrid model (and name, in certain instances) to reflect this.
Another attendee suggested that agencies are now “at the bottom of the food chain”, so to speak, meaning that there are big challenges for agencies that want to re-position themselves as consultancy hybrids that also offer strategic support. “The difference is related to scale – do you go into boutique consultancy specialism, or large-scale delivery coupled into a consultancy model?”
Ultimately, the lines are increasingly blurry, but as one participant stated: “Whatever you call yourself, the intent is to always solve the client’s problem.” This aligns with the belief that the focus should be on talent and internal set-up first and foremost – and “assembling the left and right brain” – rather than a preoccupation with labels.
However, any internal confusion is of course dangerous, and could translate to external buyer confusion. This is also one of the reasons why brands are choosing to work in-house.
You need a diverse team to be able to truly innovate, not a selection of senior experts
“The best digital agencies are evolving to be truly collaborative,” stated a roundtable participant. They went on to suggest that you cannot rely on a few experts to lead a project. Rather, to be able to truly innovate, you need a diverse team with varied knowledge.
Of course, there are practical challenges to this, and finding the right talent in a small pool (and a highly competitive industry) is one of the biggest. Econsultancy’s Top 100 report mirrors this, with recruiting talent cited as a key challenge by roughly half of respondents.
A big reason for this is the digital skills shortage, however, an attendee suggested that it is also related to an increasing desire amongst talent to work client or brand-side. Whether it is as a designer or marketing manager – many want the ownership of delivering a project, “plus there is the fact that brands are starting to pay more.”
Another participant also highlighted the gap between junior specialists (often in tech or data) and the C-Suite, leaving the middle ground (of marketing managers) somewhat at sea. “The challenge is to tie those together and improve business performance.”
It’s surprising how many large organisations have no idea what to do with data
The group moved on to the topic of data. With clients increasingly gaining custodianship of the data that is going into campaigns, how is that impacting how agencies work with them? Are clients doing automation correctly?
Interestingly, the general consensus was that clients do not particularly care about taking control of data. Rather, they want help to be able to interpret that data and implement it correctly.
One participant conveyed surprise at how many big organisations are sold massive data platforms, and yet most of them do not understand what the data generated means, or have any idea of how to turn it into something meaningful. Ultimately, agencies are nowhere near where they should be in terms of understanding data. Silos were suggested as the reason why, and the fact that there is usually “no central person who is responsible”.
So, while platforms may be able to contribute in terms of better on-boarding, the solution is to fix the culture first, not to simply buy into platforms and hope for the best. As one attendee put it: “it’s almost like ripping out the plumbing of a house and re-engineering it for a contemporary world. Agencies were not built in this way – a magic water pipe is not going to fix a deep-rooted internal problem.”
2020 and beyond
The roundtable finished by discussing what the biggest industry trends in 2020 and beyond will be. Perhaps unsurprisingly, AI was the first subject mentioned, as participants agreed that the wider conversation about artificial intelligence has resulted in a surge in client interest. This is not just in terms of marketing automation, however, but increasingly into areas of creativity.
Consequently, the near future will be about navigating and taking better command of how humans and machines can work together.
Mirroring the earlier discussions around its challenges, another big focus will be data. However, despite the huge appetite for more of it, the group predicted that agencies will go back to basics. “It’s all about understanding your customers better – not just gathering more information and not knowing what to do with it.”
Finally, one participant mentioned internal strategy, with the group in agreement that “organisations that do great employee experience also do great CX.”
This correlation is not digital agency-specific, of course, but alongside greater recognition about the need for the right skills, there is also the acknowledgement that employee experience can be a tool to both recruit and retain (much-needed) talent. Eventually, this also contributes to diversity in terms of skills and expertise, and a collaborative approach across the board.
Download Econsultancy’s Top 100 Digital Agencies Report 2019, sponsored by MiQ.
