Who Wins in the Marketing Services Sandbox?

Go ahead.  Name your competitors.  There are the obvious ones you keep bumping into at your client, or always seem to be in the waiting area when you leave the pitch.  Make a Top 10 list.  If your agency is like most places, the first 5 are pretty standard, the next 3-4 are probably  slightly different, perhaps based on size, or location, or specialty.  And maybe there are 1 or 2 that seem further out there. But it's probably a good bet that your list is built from the inside-out, starting with where you position your own firm. 

Times have changed.  Agencies are branching out to develop original content and programming.  Consulting firms are buying creative shops.  Traditional technology consulting shops are integrating digital agencies upstream.  Digital tech firms are linking fees to commerce results.  Facebook and Google and tech shops have hired brilliant creatives to help sell their services to brands.  Brands are bringing pieces in-house, fueled by ad-tech and critical social media channels.  Traditional media companies are creating ad products to dis-intermediate the agencies and work with brands directly.  And clients are getting smarter, both in terms of selecting their desired partners and in leveraging procurement to control costs, further disrupting the landscape.

But the stakes remain high.  Over $500bb in advertising spend occurs annually, with $180bb in paid media just in the US.  Several estimates suggest that $25bb-$50bb in media billings are currently under review, or about to go into review.  Oh, and the landscape is crowded -- Agency Spotter estimates that there are over 120,000 agencies in the US alone, all going after that same opportunity.  

So how does one keep score, and truly understand the broader competitor set?  Here's one cut at 10 different agency/firm types, with my take on some strengths/reasons to believe, and one potential Achilles heel/watch-out for each as they all try to defend their share, and grow their offering.

Strategy/Brand Consultants

• Reasons to Believe:  CEO level attention, incredible alumni network embedded as clients, and, well, as a former client once told me "no one ever gets fired for hiring McKinsey."
• Potential Achilles Heel:  Real (or perceived) depth of chops in creative and marketing execution areas plus collisions over rates/costs with procurement/CMOs.

Technology Consultants

• Reasons to Believe:  C-Suite attention, and well-trained teams embedded into the client organization. Deep, deep implementation chops and a complementary operating model.
• Potential Achilles Heel:  CMO concern about creativity and “getting” the emotion of the brand.

Advertising Agencies

• Reasons to Believe: Creativity at the core, long-term client relationships, “owner” of the brand, track record of designing/implementing campaigns.
• Potential Achilles Heel: The 30-second spot center of gravity and a marketing campaign mindset increase the likelihood of antsy clients exploring ideas from other types of partners, eroding the long-standing AOR from multiple directions.

Digital Agencies

• Reasons to Believe: Linkage to sales/commerce, relationship with procurement, skilled in digital, social, analytics, and media.
• Potential Achilles Heel: The “what am I?” question – tech shop? creative powerhouse? CRM leader? Analytic-led? – blurring discussions with clients, and internally in the battle for talent.

Media Agencies

• Reasons to Believe: Oversee on the big $ spend, are frequently at the table when partnerships/value exchange ideas are surfaced, can be a springboard for great ideas and innovation.
• Potential Achilles Heel: Destruction of the historically profitable model through procurement/cost pressures. Perceived weakness in creative talent.

Public Relations Firms

• Reasons to Believe: True storytellers with a communications mindset, crisis/corporate reputation chops are a deep link to the C-Suite, large global footprint to fuel “localization”.
• Potential Achilles Heel: Billable hour structure and Corporate voice slows the shift to an organization where creative freedom and “building/producing things” can thrive.

Media Companies

• Reasons to Believe: Scaled audience with rich amounts of relevant content, long-standing brand relationships, urgency to drive innovation.
• Potential Achilles Heel: The ad sales business model vs. a service-level agency model, and the scale/integration/unleashing of creative, technology, analytics, and marketing talent.

Google & Facebook

• Reasons to Believe: They deserve their own category given scale and perception of a mandatory partner. To echo the comment above, one senior media buyer told me “we’d be insane to come to a client without a big search buy and a major Facebook recommendation.”
• Potential Achilles Heel: Frienemy meets “all about me”. Concern that when all is said and done, it’s about selling more Google services, or consolidating ad spending with Facebook – more than helping the individual client.

Technology Firms

• Reasons to Believe: Yes, it’s a broad category of players showing strength and growth, from Snapchat to LinkedIn to ad tech to social listening/marketing technology providers. But where they have a foothold and demonstrate impact, they have the ability to add on adjacent services. And their economics will be wildly different from a traditional agency’s fee for service model.
• Potential Achilles Heel: Skepticism that they can play a broader agency role tapping both the rational and emotional customer marketing opportunities.

Research/Analytic Firms

• Reasons to Believe: Presence in the biggest spending area and increasingly positioned as an unbiased, critical partner. Longitudinal data, impact transparency, and historical relationships fuel trust with the C-suite.
• Potential Achilles Heel: CMO perception and questions of the ability to drive bigger creative ideas and broad marketing program implementation.

 So there you have it.  Ten categories, strengths for each, and some thoughts on a potential roadblock to land grab.  And while there are numerous agencies that cross the above categories (thereby fueling all sorts of complaints about the above segmentation), I would suggest the categorization still resonates with the most important audiences -- CMOs, CEOs, CCOs, and key finance, IT, and procurement folks at the clients.  You know, the ones who control the dollars in the sandbox.

So, what did I miss?  Did your Top 10 list just change?  Share your thoughts here or follow me on Twitter at @Glennengler.

(Image via pando.com)