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I spend a lot of time talking to people in the performance agency world. Lately, I’ve been hearing concern from all corners about performance agencies’ daily struggle to remain relevant in a landscape that’s changing faster than you can say “dynamic search ads.”
Not so long ago, brands were clamoring to get some of that performance agency “secret sauce.” But today there are any number of tools available that make it easier for brands to take charge of their own digital advertising, including search. As a result, some performance agencies might be struggling to find new ways to add value to client relationships. This raises a tough question: With so many challenges to overcome, is it possible for the performance agency model to survive and thrive?
We wanted to find out. So we teamed up with Econsultancy and asked leading performance agencies — defined for this study as those that grew revenue by 10% or more in 2018 — how they were driving sustainable growth.
What we found was insightful. While there’s no doubt that the marketing and advertising landscape has changed significantly over the past decade, the agencies that are thriving in this hypercompetitive environment are those that don’t shy away from their problems. Instead, they embrace these challenges as new opportunities to grow, adapt, and change.
Below, I’ve outlined the three most common marketing challenges confronting performance agencies — and what your agency can do to overcome them.
Automation and machine learning are here to stay. And savvy performance agencies aren’t ignoring technology — they’re finding ways to embrace it. These technologies can help performance agencies the same way they help other businesses: by efficiently managing general and mundane tasks so your teams and brightest minds can focus on strategic activities that drive your business forward.
Of those leading agencies that said they had been able to reallocate time thanks to machine learning, more than half said that they had shifted more than 30% of their time to more strategic activities (1)
Agencies willing to lean into automation are more likely to thrive in the current marketing environment. These agencies will be able to maintain a competitive edge by focusing their attention where clients need it, like data strategy, insights, and the consumer experience. By moving away from manual operations, they’ll free up more time to expand existing client relationships, go after new clients, and develop additional services that aren’t wholly dependent on media spend to drive profits.
Just because the marketing landscape has changed doesn’t mean performance agencies should totally disregard their roots. Instead, understand the value of your legacy in search and consumer intent; harness technology; and invest in talent to help uncover deeper insights that add value beyond just tactical execution.
Your experience with search gives you a first-class understanding of consumer intent. You’re able to dig deep into search data, and surface intent insights that inform not just search campaigns, but overall marketing and business strategy. This makes you the perfect partner to help brands drive growth.
But don’t just take my word for it — this is something leading performance agencies are already doing. They are 74% more likely than the mainstream to say that they use machine learning to process data signals to better understand consumer intent. (2)
These leaders use search data to predict and capture intent in other media channels so they can inform full-funnel marketing strategies. In doing so, they’re shifting perceptions that they are only bottom-of-the-funnel executioners, and, at the same time, diversifying and deepening their relationships with clients by demonstrating their strategic worth.
Many successful performance agencies already leverage data-driven attribution to inform their clients’ marketing strategies and improve ROI. Leading performance agencies are 1.6X as likely as mainstream ones to strongly agree that their agency has shifted to data-driven attribution as their primary attribution model.(3)
These agencies are in a unique position. They can help clients make a critical shift in how to measure success — from traditional media metrics to business outcomes that actually drive growth. This creates the foundation for a much more strategic partnership between agency and client, as agencies can help brands achieve business objectives rather than just vanity KPIs.
And you can take your client partnerships to the next level if you can bring together your client’s siloed data sources — website and app analytics, CRM systems, and ad campaigns — to build a holistic understanding of the consumer journey. Tap your data scientists to lead this transformation, and invest in technology like machine learning to ensure your team can distill and act on these new insights in real time.
While there’s no escaping the hard truth that performance agencies have to adapt with the times, they still have an important role to play in today’s marketplace. So turn these challenges upside down, and embrace the growth opportunities that this exciting new landscape offers.
(1) (2) (3) EConsultancy, Performance Agencies Survey 09/2018