Top agency trends 2014 | Surviving the changes

There are 8 top agency trends and 4 main success factors for 2014

But first, let’s start with the changing agency landscape

Some agencies have had a difficult time adapting to change and to harnessing new media potential. According to eMarketer, online advertising spending exceeded print magazine and newspaper ad spending for the first time in 2012. Online ad spending will absolutely continue to grow in 2014.

Market saturation is fueling growth through acquisition

The same phenomenon that occurred in the 1990’s with tech consulting is now happening in the agency world; growth through acquisition. When organic growth slows the way it has, growth through acquisition may seem the only way to grow. Social media has given rise to viral marketing, an ad strategy that relies on content such as video that generates large viewership. Social media has caused many agencies to actively purchase companies in the areas of public relations, direct mail, market research and web design to provide clients with full service solutions. And with the coming of age of the “internet of things” the proliferation of digital technology is only expanding and growing in complexity.

But what if your business isn’t large enough to grow through acquisition?

Strategic partnership is the way to go.

Businesses want a one-stop shop. If they have a choice between a purely traditional agency and a full service digital agency, the digital agency will win hands down. They’re looking for a single agency that can produce for them across the whole marketing mix.

If you want to be able to compete, it’ll be tremendously important that you be able to work congruently on all fronts for your client. By rethinking your business model just a bit you absolutely will be able to a) compete with the bigger competitors and b) put your business a step ahead of your niche competition.

And now, here are the trends expected between now and say 2107* that have led me to this conclusion:

 

  1. Agencies will continue looking to specialization and digital media to grow revenue
  2. As traditional services lose demand, advertisers will focus on digital media to remain relevant
  3. Agencies are now looking to increase digital media services to remain competitive
  4. Changing client demands and media consumption habits will continue pressuring firms
  5. Agencies will increasingly use viral marketing methods instead of commission pricing
  6. Industry is becoming more concentrated and a few large global firms will dominate the market
  7. Market saturation has been reached yet niche agencies will continue to enter the market and larger players will acquire many of them
  8. Some clients view small agencies as providing better levels of service, creativity and a lower cost compared with larger ones.

 

Then there are the top success factors also predicted :

 

  1. Ability to quickly adapt to new technology
  2. Ability to compete on tender
  3. Ability to produce unique and creative ideas
  4. Having an effective performance monitoring system

 

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source: *IBISWorld Industry Report | Agencies | February 2014

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