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Ad Agencies Slow to Adapt to Online Marketing

January 24, 2012

Only 9% of senior-level marketers say traditional ad agencies are doing a good job of evolving and extending service capabilities in the digital age, according to a study by the CMO Council.

Moreover, such firms are likely to be challenged in their retention of client relationships: 48% of surveyed senior marketers say they are hiring specialized digital marketing solution and service providers to implement new social, mobile, and interactive strategies in 2012, whereas 47% plan to build internal capabilities and use incumbent agency services less.

In addition, 45% of senior marketers say they are bringing in outside consultants to develop digital programs.

Below, additional findings from the Chief Marketing Officer (CMO) Council report on client/agency effectiveness titled "More Gain, Less Strain."

Senior marketers say most agencies are lagging or struggling to modify or adapt their core competencies and capabilities:

  • 29% say traditional agencies are acquiring—but not fully integrating—digital marketing capabilities.
  • 22% say agencies are playing catching up to new technology-driven digital specialists.
  • 22% say agencies are struggling to transition their business models and service offerings.

Overall, senior marketers are frustrated with agency contributions to business value creation, strategic thinking, and digital marketing, the report finds.

The Good and Bad of Working With Agencies

As to identity their top sources of aggravations with agency relationships, senior marketers cite the following top 5:  

  1. Agencies' lack of knowledge or understanding of their business: 50%
  2. Agreement on common analytics and metrics that define success and failure: 50% 
  3. Value-added strategic thinking: 44%
  4. Pricing and budgeting issues: 30%
  5. Integration of marketing plans and services: 28%

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