Global CMO Survey: Digitally Empowered Clients Threaten Traditional Ad Agencies

Technology advancements and a radical shift in the way that customers engage with brands are creating challenges for traditional agencies. Whilst on the one hand the global economy starts to offer the promise of growth, a lack of appropriate skills threatens to remove access to this opportunity.

• Digitally empowered clients dissatisfied with agency online, viral and mobile marketing skills
• CMOs plan on more in-house skills development; less agency dependency
• Customer data management seen as moving up the agenda 

Digital Empowerment

One of the issues highlighted in the CMO Council’s State of Marketing Report, 2010, is that clients who have become more digitally empowered in recent years are dissatisfied with their agencies digital skills. Traditional agencies are struggling to convey to their clients that they can make channels such as mobile and social work. They are also not delivering viral marketing and are finding it harder to justify the online campaigns that they run.

Technology is the issue here. Creativity, branding and targeting have always been key areas of focus for agencies but mobile, social and online campaigning are driven by a combination of technology and vast amounts of customer data.

The rate at which technology continues to be developed makes it hard for traditional agencies to keep pace, leaving clients to bring in specialist agencies to the fill the skills gaps or do it themselves. Digitally empowered clients are also placing more focus on customer data. Specifically, how can the data that they have about their customers be used to improve campaign approach and planning? This highlights another issue with traditional ad agencies which is the lack of infrastructure or technology to manage the ever growing volumes of customer data.

Forward thinking agencies are already developing in-house skills or working with specialist agencies. However, it seems that this is not enough for clients who have started down the road of digital empowerment and believe that the best way forward is to increase their own knowledge, experience and technology assets.