Digital agency model to hold strong: report

Marketers are increasingly turning to digital agencies to support their campaigns, according to the 2016 SoDA report.
Copied from Playback - digitalmedia-shutterstock-1

The next year looks promising for the sustainability of the agency model, according to the global SoDA report on digital spend.

The U.K.-based company’s annual digital trends study, conducted by Forrester Research, highlights trends in the digital industry and examines changes in agency and marketer use of digital through a wide-ranging survey with senior client leads and agency heads globally. The 629 marketers polled for the study collectively account for more than $6 billion in digital ad spend.

The report rubbishes concerns around client-agency consolidation, showing an increase in marketers’ use of specialized agencies. Compared with the previous year, the number of marketers planning to take digital in-house has more than halved from 27% in 2015 to 13% in 2016.

Also the number of clients who have more than three digital agencies on their roster has also increased by 42% year-over-year, indicating a need for specialized agency support.

According to the Global Digital Trends Survey, an increase in global digital spend marks an era of confidence in digital, with more than 55% of clients planning to increase their digital spend in the next year, marking an increase of 8% over last year.

Over the past year there has also been a shift in clients working with agencies from holding companies over independent digital shops, from 35% in 2015 to 45.8% in 2016.

But the report also highlights shifts in perception between marketers and agency heads over key issues like client priorities and agency-client break-ups.

Clients reported that one of the key reasons why they let go of their digital agency is because of pricing or value concerns, whereas agency heads tend to lay the blame on changes in management.

In addition to pricing and value, clients also reported being unhappy with strategy (21%) and project management (22%).