Friday, March 13, 2009

New 4A's Book Explores the Differences Between Digital and Traditional Agency Services

Earlier this week the 4A’s (American Association of Advertising Agencies) published a detailed report outlining the differences between digital and traditional marketing and the impact those differences have on agency operations and economics.

The report, “Understanding the Economics of Digital Compared to Traditional Advertising and Media Services,” was primarily written for general advertising and media agency executives but is a great reference for any marketing firm that is making the transition to a digital-centric model.

The report validates what a lot of people who work in digital already know; digital is a different and, in many ways, more complex medium in terms of both planning, creative and execution. And while the report’s findings may seem obvious to some, there are a few gems in the report that traditional marketers making the switch would do well to memorize:

  • The amount of agency labor required per dollar of media spend is significantly greater for digital than for traditional media - this is true for all disciplines, but especially for creative, media and data analytics
  • Digital media requires much tighter integration between creative, media and production – managing these functions in silos like most traditional agencies do will not work with digital assignments
  • Digital assignments frequently resemble software development projects – the staffing models and talent that many traditional agencies have are not sufficient for the complexity and size of these types of assignments

As more marketing and media budgets move online, agencies are going to have to make changes in their staffing and operating models to keep up. It’s not going to be easy, but at this point traditional agencies really don’t have a choice if they want to remain relevant.

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