David and the changing face of Goliath

If you and your clients were to be living 50 years from now and analyse the world in hindsight, one of the pioneering innovations would be the 'Internet'. Over a span of years, Internet has had a significant effect on civilisation as the printing press had and changed the way content gets produced and consumed. A 'digital marketplace' was born with this innovation. In tandem with this changing environment, the world of marketing & communication agencies changed drastically. We have seen an ecosystem built around it. In every country, there are the Davids, from the likes of SMEs and startups, and the Goliaths, the global giants who are increasing their footprint deeper & wider across different service offerings in the field of communication. Digitisation brought a paradigm of change in behaviour and the need of brands. Cutting across fields of marketing, sales, HR and technology, these sectors evolved in this changing scenario.

In this dynamic arena, Marketing and Communication Agency Ecosystem is rapidly evolving from the shadows of the Goliaths. Marcomm agencies no longer want to be known as 'agencies', and are making a shift towards the 'consultant' positioning & mindset. These 'consultants' are groping to develop an ecosystem that can deliver greater value amalgamating traditional and digital services.

There was a clear division between consulting companies and fulfilment partners (the so-called 'agencies'), and also between outsourcing firms in the context of export of services. That divide is increasingly becoming narrower. Industry veterans, whether it is Sir Martin Sorell or Maurice Levy, both have been vocal on the subject of the changing role of agencies. Many established agencies have been doing the job of consulting and helping brands grow for years now, however, they aren't necessarily remunerated for the same.

On the other hand, consulting companies, apart from formulating strategies, have been doing agency work as well; they developed full-fledged delivery teams in-house. Another competition in the same segment is from the BPOs. With digital becoming stronger to drive business, BPOs are fast reshaping their business. And a way forward leads to digital services. Whoever wins on this front, gets the business correct. Clients are now looking for a one-stop shop for digital marketing (search, mobile, social), content marketing (content production, distribution/amplification, influencer engagement), technology (website, app, cloud solution builders), public relations (digital & offline PR), and analytics (web metrics to business matrix). In such a scenario, Davids and Goliaths come to a level-playing field in the competition.

If we were to apply Moore's law, it would point out the fact that a lot has changed in the last five years than the first 100 years of digitisation. Running at this pace, more will change in the next 12 months than the past five years, to say the least. This change is happening across the business landscape, changing the way clients approach their problems, the way brand building is done, and perceptions managed.

As a result, a plethora of opportunities becomes available for the Goliaths - marketing agencies, communication agencies, big global consulting and professional services companies, the BPO’s & KPO’s. Though these Goliaths have a huge client base and enough resources, what they do lack is pace to change with the times. On the other hand comes the Davids with humble & specialised beginnings, energy & agility with experience in niche & a desire to challenge Goliaths. In today's consumer business environment, Davids, the Startup community and SME's of the marketing communication industry have different challenges in front of them, and the only way is to be agile, sharper & faster.

It’s not surprising in this scenario that a digital Goliath, with services of an agency, mindset of a consultant arose in the digital marketplace, trying to catch up and compete.

However, the biggest and the only problem with this changing face of the many Goliaths, is the sheer vastness of services. Content, Technology, Analytics and CRM are just a few of the areas that agencies must be proficient in, besides the regular activities of media planning & buying, social media management, influencer engagement, etc. Clients not only look to communications companies and experts to provide solutions for their marketing problems, but also help them fix their most pressing business problems as well.

Proficiency in such matters requires being able to hire the right heads for it.

Digital technology opened the floodgates to so many opportunities that no one could walk through them all. It became imperative to remember that the race was never about which agency offers the longest list of services; but about how companies can be better equipped in this dynamic landscape.

To be ready to take on clients’ business challenges, one way forward is increased specialisation and integration. Fortunately, there is an existing model that marcomms consultancies can use to get the most productivity out of digital technology.

With the changing face of Goliath, a change in approaching the industry, going for a solution-oriented approach and using the best mix of traditional and digital components is required. For instance, SMEs are not only providing content or media solutions to their multinational clients but are also building their understanding of Indian markets and giving business solution. What suits the status quo are services of an agency but the thought process and business insight of a consultant mind.

Nonetheless, in the midst of an ever-changing landscape, we must not deviate from the constant truth of high creativity leading to great business success.

(The article is authored by Ritesh Singh, CEO and MD, ARM Worldwide.)