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The New Model for Digital Agencies

The new model for digital agencies is to transform the agency into a digital consultancy. Find out why in this article.

ByRodrigo Neves
4 min read
The New Model for Digital Agencies

Lately, I've been reading several articles by internet "gurus" saying that the digital agency model has to change or agencies will go out of business.

For the most part, it's fair to agree that digital agencies increasingly need to expand their range of activities and services to cover everything the digital world has to offer, and it's almost impossible to do it all. That's the key point!

How a digital agency is structured

Digital agencies today are made up of numerous departments. There is no clearly defined standard, but the structure can be summarized as follows:

  • Planning - the team responsible for planning not only digital marketing campaigns, but also strategies to help clients achieve the goals outlined in their annual plans;
  • Account Management - the team responsible for maintaining client relationships, gathering briefs and delivering everything requested;
  • Creative - the agency's creative team, which turns ideas into impressive designs aligned with the client's strategy;
  • Technology - brings everything that was planned and created to life;
  • Media - the department responsible for managing all of the client's advertising across the channels that have been selected;

How traditional agencies make money today

Today, most digital agencies generate the bulk of their revenue from managing client media campaigns. There are several compensation models, from a BV to a percentage of the amount the client invests in media.

However, with the growing variety of channels and market competition, these rates have been declining and can no longer be the main source of revenue.

Although the term agency is still used, it has lost its meaning. Agencies are increasingly moving beyond representing clients to doing all the work themselves, often with underqualified staff who are unable to deliver the best results for the client.

Client perception

Clients are increasingly well-informed. They want the agency to be fully aligned with their goals, and they set targets for agencies because everything in digital can be measured.

Clients like the design, and are impressed by the strategy, but at the end of the day, what they want to see is the ROI (return on investment) on the money spent on the agency's work or the media it managed.

So, in this case, the agency has to start changing the way it works with its clients. It needs to immerse itself in the client's strategy and determine what the digital world can deliver for them. It's not just about well-executed media campaigns.

What does an agency need to do to change?

In the new digital agency model, the agency's role is to act as a digital consultant, bringing clients the best solutions on the market at the lowest possible cost and with high quality.

Is this possible? Yes, it is!

Agencies need strategic partners in their business to help them find and implement the best solutions for their clients' businesses.

Today, given the complexity and vastness of the digital world, you can no longer do everything in-house.

Here are a few examples of areas in the digital world that every client needs, but not every agency has the expertise to handle entirely in-house:

Conclusion

"Full-service" agencies need to become true digital consultancies and work with strategic partners such as a Digital Production Company, an SEO agency, a media agency, an inbound agency, and others, to support every deliverable agreed upon with the client, always focused on results.

 

 

 

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