Digital only agencies aren’t making the grade

According to the Q2 Pearlfinders Index, which is digital marketing research based on interviews with more than 4,000 marketing executives across all industries —  digital and social media services have become more sought-after disciplines, while consumer PR, though still popular, is becoming less of a consideration. However, agencies that only offer digital services are not getting the nod.

Despite shifting their budgets towards digital and social media, 3 in 4 marketers aren’t using exclusively digital agencies for their social or digital needs, and the majority of those don’t foresee using them in the near future, according to June 2012 survey results from RSW/US. In fact, only about 2 in 5 think such agencies can survive, with the remainder believing that digital agencies need to offer more traditional services to maintain their relevancy.

In Q2, among the times that marketing decision-makers advised that they were considering a particular service category, digital made up 19% of these demands, up from 13% a year earlier. Similarly, social media was mentioned 17.1% of the time, up from 14.1% in Q2 2011. Consumer PR, at 14%, was the third most-desirable discipline, though it fell from 18.6% a year earlier.

Advertising and corporate PR rounded out the top 5 desirable agency disciplines for Q2 according to this digital marketing research, though both fell substantially from the previous quarter.

Customer Acquisition the Dominant Marketing Objective

In Q2 2012, companies’ primary customer marketing objective was acquisition (93.8%), compared to just 5% focusing on retention and 3.8% on development. A year earlier, 71.3% had focused on acquisition, with retention (17.1%) and development (11.6%) figuring more prominently into the equation.

Other Findings:

  • NPD/innovation was the strongest source of opportunity for agencies, accounting for 35% of new business opportunities for agencies of all disciplines during the quarter.
  • 12% of all live opportunities uncovered in Q2 focused on advertising. The most opportunities for advertising agencies came from the retail (14.8%), CPG (12.6%) and industry (11.5%) sectors.
  • For design and branding work, demand for agencies with a global reach grew from 7% to 29%. Retail was the largest source of briefs for design and branding agencies, at 24% of opportunities.
  • Leisure brands leapfrogged food brands to become the largest source of digital opportunities, at 19% share. 45% of all digital opportunities were for agencies with national capabilities.
  • PR was the primary channel of investment for marketers focused on customer development in Q2. 39% of PR decision-makers sought national support, surpassing regional, which was the primary requirement last quarter.

About the Data: Pearlfinders’s digital marketing research tracks planned corporate activity likely to drive marketing expenditure, using indicators that include: expansion; innovation; M&A; decision-maker appointments; and formal reviews. The company then interviews the executives responsible for making decisions at the brand in question. A supplier opportunity is defined as a live opportunity to interact with a decision-maker over the next 18 months.

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