Idea Transcript
A Forrester Consulting Thought Leadership Spotlight Commissioned By Adobe January 2017
The Future Of Agencies A Spotlight On Data-Driven Marketing
Table Of Contents 1 Executive Summary 2 Customer Insights Fuel Modern Marketing Strategies 5 Agencies Should Put Technology And Data Front And Center 7 Key Recommendations 9 Appendix
ABOUT FORRESTER CONSULTING Project Director: Karin Fenty Contributing Research: Forrester’s B2C Marketing research group
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Executive Summary
57% of marketers said that customer insight drives every important marketing decision they make.
Customer insight is the lifeblood of the modern marketer. To grow the business, marketers must identify high-value audiences and proactively exploit opportunities to turn prospects into loyal customers. Meanwhile, existing customers expect a relevant, personalized experience regardless of channel or touchpoint. Success in this environment depends on connected data: breaking down platform and channel silos to build a holistic view of customers and prospects across interactions. Marketers need agencies to support these data-driven marketing imperatives, and the demand for agency services like customer insights and technology integration are on the rise. To meet these needs, agencies must leverage technology and data to derive and apply customer insight across clients’ paid, owned, and earned channels. Agencies with broad technology partnerships and agile, collaborative processes will find more opportunity for future growth and impact. In October 2016, Adobe commissioned Forrester Consulting to explore marketers’ evolving needs and what the future of agencies looks likes to meet those needs. Forrester surveyed 518 marketers to explore their current needs, future plans, and how they engage with seven types of marketing agencies and service providers: digital and interactive, fullservice/integrated, specialist, creative, direct/performance marketing, media, and systems integrators.1 KEY FINDINGS, OVERALL
Agencies that embrace data and technology to drive customer understanding will win in the future.
›› Agencies must embrace marketing technology and data to survive. Keeping pace with technology is not enough. Agencies need to embrace marketing and advertising technology as core competencies and proactively embed these into service offerings. ›› Technology partnerships are an emerging opportunity. Over the next two to three years, marketers will begin to favor agencies that develop innovative services through technology partnerships. KEY FINDINGS, DATA-DRIVEN MARKETING ›› Modern marketers need data and insight to attract and engage customers. Marketers invest in areas like personalization and analytics to optimize customer interactions and audience targeting across channels. ›› Agencies’ contributions to data-driven marketing today are more tactical than transformative. Marketers leverage various agency partners to execute their data-driven technology strategies across paid, owned, and earned channels by having agencies use a range of marketing and advertising technologies on behalf of their clients. However, gaps in technology services and skillsets leave marketers less than fully satisfied. ›› Agencies of the future will differentiate on data and technology. As the demand for data-driven marketing services continues to rise, the most successful agencies will be cross-channel data experts who create new sources of value for clients through strategic technology partnerships.
1 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
Customer Insights Fuel Modern Marketing Strategies Thriving in the age of the customer requires deep customer understanding rooted in data and insights. Marketing organizations have become increasingly data-driven over the past several years, using data and insights to guide strategy, define target audiences, personalize customer interactions, and measure success. As marketing organizations work to connect data across channels, silos, and technology platforms, they need agencies with digital acumen and service offerings that align with data-driven marketing imperatives. In surveying marketers about their evolving needs, we found that: ›› Data and technology are fundamental to how marketing organizations engage with their customers. The majority of marketers (57%) told us they base every important marketing decision on customer insight. To fuel insight-driven customer interactions, 58% have dramatically increased their use of marketing technologies, and 45% or more have increased spending in areas like personalization and analytics. Over the next three years, marketers will increase investment in data-driven initiatives to fuel marketing efforts across paid, owned, and earned channels (see Figure 1).
56% of companies increased spending over last year on customer insights, and 45% increased spending on personalization.
Figure 1
57%
“Customer insights drive every important marketing decision we make.”
58%
“Our organization’s use of marketing technologies has increased dramatically in the past few years.”
“Which of these are among your marketing organization’s top priorities today? Which do you expect to be top priorities in three years?” Today In three years
44%
50%
Increase organization’s use of data and analytics for customer insight
43%
44%
Better leverage data to drive marketing efforts across paid, owned and earned channels
Base: 518 marketers who manage agency relationships for large companies across the globe Source: A commissioned study conducted by Forrester Consulting on behalf of Adobe, October 2016
2 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
“We recently created a single customer database — all contacts are managed through this platform. Over the next three years, we’ll add new media and new data for the best orchestration of marketing and customers.” Marketing director, global financial services firm
›› Marketers rely on agencies to get smarter about their audiences and customers. Data-driven marketing helps companies get a holistic view of customers across interactions, predict customer and prospect needs, and tap into new audiences with high potential value. Marketers enlist agency partners for a range of services that serve these objectives, including media planning and buying, data analytics and customer insights, search marketing, web and email marketing, mobile, and social media. ›› Agencies are key partners in executing marketers’ data-driven technology strategy across paid, owned, and earned channels. Agencies have taken on a major role as technology users on behalf of their clients. For example, roughly 71% of marketers enlist agencies to use data management platforms on their behalves, and 55% have agencies run online testing and targeting on their behalves (see Figure 2). Digital advertising technologies are a clear strength for media agencies. Marketers are more likely to fully outsource paid bid management to their media agency partners; 49% of those that work with media agencies use this model for paid search, compared with 39% of other respondents.
Agencies leverage many data-driven technologies to help marketers understand and interact with customers.
Figure 2 “Which of the following marketing technologies do you and/or your agency partners currently use?” My agency partners use this on our behalf, but my marketing organization does not
Both my marketing organization and my agency partners use this on our behalf
Data management platform
55%
20%
Social marketing or relationship platform
55%
16%
Recommendation engines
53%
Real-time interaction management
50%
Display advertising: real-time bidding platform
47%
Web analytics/session recording
49%
Cross-channel bid management platform
45%
Predictive marketing analytics
48%
Online testing and targeting
47%
Cross-channel advertising measurement platform
55%
16% 17% 19% 16% 20% 16% 17% 9%
Base: 373 to 487 marketers who manage agency relationships for large companies across the globe; (percentages reflect only the companies that use each technology) Source: A commissioned study conducted by Forrester Consulting on behalf of Adobe, October 2016
3 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
›› Despite this momentum, most marketers are not fully satisfied with agencies’ roles as data-driven marketing partners. On average, 69% of marketers are at least somewhat satisfied with their agencies’ roles as partners in data-driven marketing, but few (17% on average) are very satisfied. Many respondents cited gaps related to technology expertise and data/analytics skillsets, indicating that their agencies’ current roles in data-driven marketing are more tactical than transformative across channels.
“Overall, how satisfied are you with your agencies in terms of their role as strategic partners in data-driven marketing?” 3% Dissatisfied
17% Very satisfied
28% Neutral
Agencies Should Put Technology And Data Front And Center Success for marketers depends on connected data. Customers expect a relevant, personalized experience regardless of channel or touchpoint, which requires breaking down platform and channel silos to reveal a holistic view of the customer across interactions, from acquisition to conversion to ongoing engagement and retention. Agencies can help marketers tackle this challenge by helping them reach customers and prospects with relevant messages across paid, owned, and earned channels — and measuring the impact of these interactions for continuous learning. However, marketers want to own their data-driven marketing strategy rather than outsource it entirely to an agency. The most successful agencies will be collaborative data experts with strong technology partnerships. Our study revealed that: ›› Demand for data-driven agency services will continue to rise. Fifty-seven percent of marketers expect an increase in demand for agencies to deliver data analytics and customer insights across channels, and 45% expect an increase in demand for data-driven marketing services. Media agencies and specialist agencies that dominate the market for data-driven agency services today — including media planning and buying, analytics, technology management, search, and social — stand to benefit from this demand. ›› Agencies must embrace marketing technology and data to survive. Marketers need agencies not only to keep pace with technology but to proactively enhance marketers’ digital competencies to drive differentiation. Most marketers believe that agencies need to embrace technology (57%) and data (55%) as core competencies, not just as tools to support processes (see Figure 3).
4
52% Somewhat satisfied
Figure 3 60% agree
57% agree
“We rely on our agency partners to deliver value that enhances our digital competencies.”
“It is essential that agencies prioritize marketing technology as a core competency, not simply as a tool to support processes.”
55% agree
“It is essential that agencies prioritize data as a core competency, not simply as a tool to support processes.”
Marketers embarking on data-driven marketing initiatives will rely on agencies that embrace technology and data to enhance marketers’ digital competencies.
“In which of the following areas do you believe your agency partner(s) will help your marketing organization achieve its top priorities over the next three years?*” 53% By developing technology partnerships that give us access to innovative solutions
50% By contributing customer insights expertise
48% By contributing industry expertise
44% By developing proprietary solutions
34% By contributing strategy
Agencies will succeed in the future by developing technology partnerships and using customer insights to help marketing clients create connected brand experiences. Base: 518 marketers who manage agency relationships for large companies across the globe; *863 responses counted due to respondents rating multiple agency types Source: A commissioned study conducted by Forrester Consulting on behalf of Adobe, October 2016
5 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
›› Deep technology partnerships are an opportunity for agencies. When we asked marketers how agencies can help them achieve their priorities over the next three years, the top approach they selected was developing partnerships with technology companies that give marketers access to innovative solutions (53%) (see Figure 3). Marketers are starting to seek out this offering; in fact, 48% said they will consider agencies that leverage partnerships with technology companies over those that do not. ›› The most successful agencies will be agile, collaborative data specialists with strong technology partnerships. In addition to looking for breadth of technology partnerships, marketers increasingly seek depth of specialization, data-driven marketing across channels, and highly collaborative processes (see Figure 4). Agencies that leverage technology partnerships to build integrated, data-driven service offerings are more likely to rise to the top.
“My marketing organization will consider agencies that leverage partnerships with technology companies to create unique, proprietary technology solutions over those that do not.”
48% Agree
Figure 4 “How important are the following agency qualities to your marketing organization today? How important do you expect them to be 2-3 years from now?” Today
2 to 3 years from now
Breadth of technology partnerships and ecosystem
62%
Depth of specialization in specific capabilities or channels
67%
Data-driven marketing competencies
Highly collaborative processes with clients
High level of agility
71%
71% 68% 71% 61% 69% 63% 69%
Base: 518 marketers who manage agency relationships for large companies across the globe Source: A commissioned study conducted by Forrester Consulting on behalf of Adobe, October 2016
6 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
“There is always a wish to have a partner that has the technical know-how as well as the digital know-how. But it is hard for agencies to do that with their historical background and expertise.” Marketing director, global financial services firm
Key Recommendations Data-driven marketing is the key ingredient for brands looking to deliver personalized, contextually relevant customer experience. Marketers will invest in strategies to fuel audience insight and intelligence. And they will look to agencies for the technology strategy and support to enable data-driven targeting across paid, owned, and earned channels. Agencies, however, aren’t fully meeting these needs right now. To remain relevant and find future success, agencies will need to: Deepen data-driven marketing capabilities. To execute on datadriven strategies, marketers need agency partners to harness the flood of customer information into intelligence that fuels targeted, crosschannel experiences. Smart agencies will seize this opportunity and invest in people, technology, and practices to build these solutions. Proactively drive data-driven strategy. Marketers don’t need agencies to just pull the levers on technology; they need partners to design strategies that deliver highly relevant experiences across paid, earned, and owned channels. Agencies will need to elevate their positions from proxy marketing and ad tech users to data-driven innovators. Marketers will gravitate toward agencies that can use technology to deliver a complete view of the customers and the strategy to reach them. Leverage technology partnerships to differentiate. Agencies already work with technology companies on behalf of their clients. These relationships, however, are tactical. Agencies need to deepen these relationships to create new sources of value for clients. Agencies should seek out technology companies to build integrated platforms and create customized data-driven solutions.
7 | The Future Of Agencies: A Spotlight On Data-Driven Marketing
Appendix A: Methodology In this study, Forrester conducted an online survey of 518 respondents at organizations with 1,000 or more employees in the US, and organizations with 500 or more employees in Canada, the UK, France, Germany, Brazil, Mexico, Australia/New Zealand, China, and India. The survey evaluated marketers’ changing priorities and needs and what qualities and services from agencies are important to meeting those needs, now and over the next three years. Survey participants included marketing and advertising decision-makers in manager-level positions and higher who regularly work with agency counterparts and manage agency relationships. In addition to the survey, Forrester interviewed two Adobe customers in brand-side marketing roles to gain a qualitative perspective on the future of agencies. The study began in September 2016 and was completed in October 2016.
Appendix B: Respondent Details REGION
INDUSTRY North America 21%
EMEA 30%
14%
Financial services and insurance Retail
12%
Healthcare
12% 11%
Media and entertainment APAC 30%
LATAM 19%
RESPONDENT LEVEL
Vice president 21%
Manager 19%
6%
Consumer product manufacturing Manufacturing and materials
4%
Consumer services
4%
Business services/professional services
4%
Telecommunications services
3%
Technology/Software
3%
Energy, utilities, and waste management
3%
Chemicals and metals
3%
Director 30% COMPANY SIZE 5,000-19,999 employees 12%
7%
Electronics
All Marketing/Advertising roles C-level executive 8%
10%
Travel and hospitality
20,000 or more employees 5% 500-999 employees 21%
1,000 to 4,999 employees 56%
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Transportation and logistics
1%
Government
1%
Education and nonprofits
1%
Construction
1%
Agriculture, food, beverage
1%
Appendix C: Supplemental Materials “Revamp Your Agency Roster To Lead A Connected Brand Experience,” Forrester Research, Inc., April 27, 2016 “Predictions 2017: Media Disrupts Itself With New Business Models And Unexpected Partnerships,” Forrester Research, Inc., November 3, 2016
Appendix D: Endnotes 1
For purposes of the survey, we defined the seven agency types as follows: Digital and interactive agencies. Focused on digital strategy, web and interactive design, and build. Full-services/integrated agencies. Broad-based, incorporating a full range of services to clients. Specialist agencies. Focused on a specialist area such as mobile, social, or disciplines such as UX, enterprise, or technology. Creative agencies. Focused on above-the-line and creative or designled business models. Direct or performance marketing agencies. Focused on direct or performance marketing specialties, including paid media. Media agencies. Focused on media planning and buying. Systems integrators. Focused on bringing together various marketing and advertising technologies into a whole and ensuring that they function together.
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