After the Digital Agency: The Three New Archetypes for Winning Agencies

Digital Expertise Isn't Enough Anymore -- You Must Be Customer-Obsessed

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As marketers race to serve the digital shifts in consumer behavior, agencies have raced alongside to help them. At this point, digital expertise no longer differentiates these firms. So what's the next big thing that can distinguish marketing agencies in the chief marketing officer's eye?

Smart agencies will redefine their core competencies to help brands succeed in what Forrester Research calls the Age of the Customer. This is a 20-year business cycle in which the most successful enterprises will reinvent themselves to understand and serve customers who are increasingly powerful. Marketers will need to to prove that they operate as a customer-obsessed enterprise. Agencies, in support of this strategy, will take on one of three primary roles: innovator, integrator or implementer.

The innovator. Low-power location sensors, virtual-reality film and video editing and wearable technology are fascinating individually. Combine them and you can change the nature of play, shopping and even work. Businesses that face digital disruption such as this increasingly need help from agencies to out-innovate competitors, create awareness among empowered consumers and redefine the boundaries of customer experiences.

Take T3 as an early example. The agency developed a service bridge concept in its innovation lab to revolutionize UPS's customer service. This became UPS My Choice, a program that allows UPS customers to reroute packages so they don't miss deliveries. This type of service will work best for CMOs attempting radical business or product development.

The integrator. Consumers' short attention spans and cross-platform utilization will become more pronounced in the digital future. Already, spend on digital media will account for 27% of all paid advertising in 2013, according to a Forrester forecast. But marketers will continue to rely on traditional advertising, too. Agencies that can deliver on the entire marketing mix across the customer life cycle -- even as the mix of channels evolves -- will complete the picture for traditional marketers who need a catalyst to move past push-marketing tactics.

The goal is to deliver on a fully integrated marketing strategy, where the brand and customer experience are not just replicated from channel to channel, message to message, but translated into the most appropriate form for each interaction.

The implementor. The challenge that traditional shops have had supporting demand from marketers is similar to the internal challenges faced by CMOs and CIOs as they try to get their teams to collaborate: They don't speak a common language in terms of timing, goals and expectations. But implementers can connect these two very different disciplines that now depend on each other more than ever. For example, IBM connects internal supply chains with eCommerce teams to ensure accurate inventory levels, while SapientNitro builds immersive digital experiences through partnerships with Adobe and acquisitions like Second Story.

The technology skills organic to traditional systems integrators will become more and more important to marketers. These firms will act as a bridge between marketing and technology, working to build or implement business technology like e-commerce systems, loyalty and customer relationship management platforms or marketing analytics applications.

It's not impossible for one agency to seek to serve marketers across all three of these focus areas. But no one agency will be able to meet all of a CMO's needs. Agencies that try to be all things to all CMOs will find themselves undifferentiated in a market that increasingly demands clarity. That is why we expect tomorrow's agency frontrunners to hone in on what they're great at.

David Cooperstein is a vice president and research director at Forrester Research.
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