Think bragging about your digital chops will still give you an edge in years to come? Think again.
A new Global Digital Outlook Study released by digital-agency society SoDA and Forrester found that more than three-quarters of client-side marketers and agency leaders believe the term “digital” will disappear within five years as a meaningful differentiator.
The report included responses from 90 client-side marketing and tech leaders and 126 agency executives, primarily from mid-sized digital agencies. Some of them think the term is already dunzo: Just over half (54%) of client-side marketers said the term digital is still a meaningful way to differentiate agencies and marketing activities related to technology while 27% of agency leaders feel the term has lost relevance.
“It’s too blunt an instrument at this point. It’s not a term that tells you anything anymore, but we don’t have any more nuanced vocabulary yet, so we keep going back to it,” said Michael Lebowitz, founder and CEO of Big Spaceship and guest editor for the SoDA report, which ecompasses the Global Digital Outlook Study.
Lebowitz said his company stopped calling itself a digital agency in the last two years (though its soon-to-be-updated website still uses the word).
“It’s more limiting than it is a good way of differentiating,” he said. Big Spaceship now calls itself a “modern partner.”
Lebowitz said clients putting digital efforts into silos is partly at fault. For example, he said social media teams should not be separate from digital teams. “What you really want is a comprehensive partner that’s thinking about how to reach consumers and provide business value and human value in equal measure, and all the ways that you can do that.”
What is ‘innovation?’
Though innovation is on the tip of every tongue in the ad industry, it turns out agency leaders and marketers think about the topic in very different ways. According to the report, agency leaders think of “innovation” through the lens of solving problems in unique ways, while marketers define it by being first.
And how the two sides work together to innovate isn’t quite connecting: While 73% of marketers believe their organizational structure helps their ability to innovate, 48% of agency leaders believe their clients’ organizational structures actually hinder that ability.
“We’ve got an industry that is very focused on being the first to do something, which, there’s a ton of value in that, because that breaks through, that gets attention — but it’s also a spike of attention,” Lebowitz said. “Sometimes it’s the agency’s job to caution against rushing into something new because it’s shiny and people are talking about it.”
He used virtual and augmented reality as an example. Though marketers are bullish on those technologies, with 43% of those surveyed saying they plan “significant investments” in them over the next 12-to-18 months, Lebowitz said agency leaders might steer their clients to prioritize other areas because the user base for VR is low and highly fragmented. According to the report, only 26% of agency leaders anticipate VR will significantly impact their clients’ marketing approach.
The influence of consultancies and digital media partners
When it comes to digital, new players are partnering with clients for innovation efforts. The SoDA survey has been done for five years and in last year’s report, half of the marketers surveyed said they were working with agency partners on innovation. This year, that number dropped to 37% as consultants and other rivals move in.
Meanwhile, 42% of client-side marketers worked with digital media partners like Facebook or Google on innovation, and 47% worked with consultancies including Accenture or Deloitte.
Consultancies also gained traction as viable alternatives in the digital agency landscape: 77% of client-side respondents said they were open to working with a consultancy for digital work, a jump from 41% last year.