What Differentiates a Digital Agency?

Back in March there was a fantastic post on Digiday about how agencies are experiencing a branding problem.  John Marshall writes,


The problem is especially pronounced in digital. In an effort to capture what relatively little budget gets devoted by major marketers for online efforts, digital agencies claim to do almost everything under the sun. Mobile app? Sure. Social strategy? Of course. Banner ads? Absolutely. R/GA is “the agency for the digital age,” while rival AKQA purports, “The future inspires us. We work to inspire.”

Because of this lack of differentiation, agencies continue to have to compete on price, driving down margins. Clearly, there needs to be a greater distinction within this world for agencies to continue to thrive. Indeed, interesting business models are popping up left and right. Recently, a company launched that will turn around any project for you in 24 hours and $1,000 budget – granted that the request comes in through twitter and is subsequently limited to 140 characters.

The crux of the differentiation problem lies in people. It has been said that the only way to get a raise at an agency is to quit and go to another agency. This has created an immense amount of talent to jump from agency to agency, bringing with them ideas and methodologies that  the new agency then can train new employees with. The talent pool, while incredibly good at what they do, becomes homogenized.

One commentator on the Digiday post mentioned above hits the nail on the head , “If you're Weiden and Kennedy, the agency that conceived and executed the still memorable Old Spice campaign, then that's what differentiated you and continues to do so. The creative person or persons who devised that campaign however, should they move to another agency, will take with them much of the reputed magic that helped or helps to distinguish W&K from other agencies. It's like when LeBron went from Cleveland to Miami. Both teams' brand changed considerably when that happened but it had nothing to do with the teams themselves, it had to do with the roster each could boast.”

But why not compete on price given access to the same talent pool? Can agencies accept that there may be efficiencies that would help them still provide a great working environment, but reduce overhead?

We did and this line of thinking is exactly whyour digital agency of sorts continue to provide great work at reasonable prices. 


Just to add some additional competing on cost flavor - http://www.digiday.com/brands/brands-continue-to-focus-on-cost/

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