What value do digital marketing agencies bring to the table? For many years, this has been an easy question to answer. Performance-focused agencies were technical experts who understood digital channels through and through. They knew which buttons to press and which levers to pull to fine-tune the platforms and optimise their brands’ campaigns for return on investment.
Agencies could use the signals from tools like Conversion Tracking and cookie-based interest profiles to power accurate performance measurement and build precise audience segments for highly effective targeting and retargeting.
In this world, creative took something of a back seat. When the right message was being delivered to exactly the right person in exactly the right moment, creative brilliance was less important than generating large volumes of content that could be dynamically tailored to different audiences.
Platform experience – knowing Google Ads or Facebooks Ads inside out and understanding how to test and activate data – was the in-vogue skill and where agencies could make a mark.
Automation and privacy overturn the agency model
However, today this model is being completely overturned and advertisers are looking for digital agencies that can add value in new and innovative ways. One key reason is that digital channels are being automated.
Google, for instance, is using AI and automation in its Smart Bidding solution to make buying ads easier than ever, while remaining effective. And although the platform drives results, it robs advertisers and agencies of the ability to exert granular control and creates more of a black-box effect than ever before. With Google’s algorithms fed by signals from within the Google ecosystem, advertisers and agencies must find new ways to create a competitive advantage.
The second catalyst for change is data privacy. Since 2018, GDPR has mandated that organisations can’t share EU/UK consumers’ personal data without consent, and this principle is increasingly reflected in similar regulations worldwide. The privacy agenda is not just top-down. Consumers are well aware of their rights and are more likely to buy from brands with a good privacy experience.
As a result of these twin pressures, all major browsers have deprecated third party cookies or are set to do so in the near future. Apple, meanwhile, has turned privacy into a USP, forcing consent for advertising identifiers on iOS and creating its own standards for the measurement of online ad performance that are more limited than advertisers are used to.
Agencies are finding that the signals they have traditionally relied on for data-driven marketing are more fragmented than ever, and that they must look for privacy-conscious alternatives for performance evaluation, audience segmentation, targeting, and retargeting. Exploring methods like how to block click farms can provide more secure and reliable avenues for performance evaluation in the digital marketing landscape.
As the industry changes, so must advertisers and agencies. Agencies who previously focused on hyper-targeted campaigns need to embrace a new approach to data and rediscover the role of creative.
New data skills in the era of the algorithm
When it comes to data, there needs to be a shift in focus. The withdrawal of tracking cookies has decimated the data broker landscape and first-party data is now the most valuable intelligence available to marketers. This is the first area in which digital agencies can add value: helping their clients create an effective first-party data strategy that covers what data they can collect, how they can collect it in a privacy-conscious way that builds trust, how they can analyse the data for audience insights, and above all how that data can be activated in media buying.
As discussed, the increasing use of automation in digital marketing platforms means that managing the fundamentals of the channels is more efficient and accessible than ever before. However, there is still an important role for agencies in helping to ensure that algorithms perform optimally. This requires a more holistic approach to data and a laser focus on how marketing campaigns connect to broader business strategy and objectives.
For instance, if a company’s objective is to drive new customer growth, spending budget serving ads to repeat customers is inefficient. Agencies can help brands identify misalignments such as this by analysing their ad spend within digital channels from a technical and strategic perspective.
Armed with the right skills and technologies, agencies can then train the digital platforms’ algorithms by sending the right data signals, and optimising them to help meet their marketing and business goals. In this simple example, switching the traditional signal of revenue for new customers could be a positive first step in harnessing the power of the platforms towards the true business objective.
The creative renaissance
The second key change is to refocus on creative. As agencies lose some of the targeting granularity they enjoyed before the privacy revolution, they need to ensure that their ads have even more impact when they’re seen – and that means having a broader appeal than has been the case for the past decade. In the new digital marketing world that is evolving today, the most successful creative will be designed and tested natively for digital.
That means breaking down internal barriers to digital optimisation (such as obstructive brand “gatekeepers” within businesses) and building agile business structures that allow creative to be connected to business and audience strategy, as well as the platforms.
This is achieved through data-driven, iterative feedback loops that connect brand ideation, business strategy, and creative optimisation. In this way, agencies can help brands balance the artistry and flair of great creative with good data foundations that link directly to their business aims.
Fjällräven, the outdoor clothing brand, is already embracing this creative renaissance, and its experience demonstrates just how powerful the approach can be. In a recent creative campaign, the company put creative testing front and centre. It established a testing framework to drive optimisation against its KPIs and introduced continuous brand lift studies to monitor brand-driven goal performance. The campaign resulted in a 70% increase in ad recall, 285% increase in action intent, and 392% increase in click-through rates.
Adapt and thrive
Performance-based digital agencies are at an important inflection point. The old ways of adding value are fading in relevance, and they must adapt if they’re to survive in the age of automation and privacy. Agencies that master first-party data, understand how to train adtech algorithms, and double down on data-driven creative will find new ways of creating a competitive advantage and ensure that their clients’ marketing campaigns have an outsized impact on their growth.
