We have seen a rush from almost all agencies to ‘become’ digital as advertisers are more frequently wanting a digital component in their campaigns. The problem is a lot of the agencies that are claiming to be ‘Digital Marketing’ agencies often don’t have the knowledge or deep understanding to provide their clients with the best digital options. Being a digital marketing is not simply about being clever creatively any more or just brokering media buying . It’s far more than that. The ad agencies generally accept that they need to move from a task based approach but they are not well-structured to take on the new digital marketing challenges with performance, measurement and a fuller digital offering being at the heart of their organizations.

In this year of the ox, agencies are facing advertisers that are more far more careful with spend, taking a shorter term outlook and are questioning of the statuesque. Far more important is the need to provide advertisers with clear and measurable outcomes, have realistic expectations and use multiple channels for integrated campaigns. This is why it’s vitally important for agencies to change their outlook on account management and execution.

As a company, SinoTech Group is used to supporting 4A Agencies and managing blue-chip clients to create them with the business cases strategies and provide digital marketing technology and services. We have a strong understanding of the part search and social media plays in a digital marketing campaign and we are seeing more dependence on metrics and objective measures in determining campaign success. As the larger agencies struggle with the costs of carrying high paid executives and ‘heavy’ operational structures, there is a degree of ‘just to hard’ to start over and it is simpler to just add services onto the existing organization. So rather than re-engineer and adapt their is a slash and burn mentality. I see a lot of new nimble/hungry digital shops getting briefs and being able to address advertisers in a way that is meeting there requirements in this business environment.

This sentiment was also echoed by the Ogilvy & Mather China’s chairman TB Song. As reported in “Media”, he sent a stern memo to all staff that lambasts them for a “collective failure” in 2008 that saw Ogilvy miss financial targets. Read the full text of the email at http://media.blog.brandrepublic.asia/davidtiltman/ogilvy-chinas-collective-failure/

Here is an extract from the Chairman’s memo.
1. We, including planners, account service and creative professionals, must be more active and engaged in our clients’ businesses. This means doing a better job of understanding their operations, strategies and market positions. We must stand alongside our clients in facing business challenges and changing market conditions. We must infuse our creativity – our core competency – into our clients’ businesses. Our creative people can’t simply sit at home, receive the brief, and then “do creative.” Our advertising must be more than just TVCs or print ads, as our creativity should blaze new paths of communication which aims to help our client’s business. The best ideas are still undiscovered. If Ogilvy’s creative people think only about the awards, TVCs and print ads, or even scam ads, I will encourage them to leave. Our creative people should be forbidden from working on scam ads. I’m not against awards, but the focus must always be on our clients’ businesses, and let the chips fall where they may.

2. We must work to deeply understand the client’s business model, especially their financial systems/cycles and the up/downstream structure of their industry. These factors will impact the client’s short-term marketing and communications strategy. We should incorporate these considerations in the advice we give clients and adjust our service accordingly.

3. For our operations, to improve flexibility, speed and efficiency, we should pay more attention to written agreements, such as bill estimates. Keep all written business communications transparent and in neat order to avoid potential payment disputes.

4. Go out into the world with your clients. Directly face consumers, retail stores and dealers in the 2nd or 3rd tier markets. Share your views during these investigations, and form a creative strategy from the insights. This is especially important for our senior creative people. The time to do it is now.

5. There won’t be any opportunities for taking it easy. We will not allow this. We will not be a team of “average performers” who drive out people who are destined for excellence. This only happens to teams who do not transform and adapt during the hard times. This will not happen to Ogilvy. Never. We will not tolerate laziness and complacency of any kind!

6. We should pay more attention to on-the-job training. It’s important to train junior staffers by working with them hand-in-hand. Leaders must be generous with their time. No training is better than working directly with a skilled practitioner. Training junior staff is even more important during the hard times, as it solidifies our foundations and gives our clients more confidence. Training during the hard time makes it easier for us to work together, from A/S, planning, and creative, to media, PR, and action- no discipline is exempt. Creative people may have great marketing strategies, planners could be on the front line of business consulting, A/S may have really creative ideas, PR professionals may have the most creative product branding ideas. In bad times especially, we need to be considering all of the available angles and resources to help our clients grow.

7. We need to remember that we are “Brand Stewards.” And branding is a long-term project. In 2009, clients will be looking for quick solutions to their sales problems. Ogilvy should be focused on being “effective in a short amount of time, but also beneficial to long-term branding.” That’s the key to sustained success in hard times.

So in order to survive the digital age, the “digital agency of the future” needs to evolve and embrace the following points:

• Digital Marketing Needs to be Offered as an Integral Services Offering
  
• Digital Marketing Knowledge is Crucial
• Have a Measurement and Analytic’s centric Approach
• Be Creative and Understand the Brand
• Be Proactive, Nimble and Innovative

I expect to see some agencies completely rebuild or at least attempt this. I also predict we will see some new, current ‘unknowns’ (agencies) leap forward and develop a market position as advertisers become less loyal to their agency of record and look at other options.