So whilst my first scenario looks at the possible rise of true integration the 2nd scenario looks at the fragmentation of the digital space and a surge in specialists…
- Marketing becomes tailored to specialist channels and agencies as a dawn of ‘high maintenance’ marketing commences
- Agencies have retained a digital / traditional split with more coming to market to deal with the specialist requirements
- Consumers are significantly more digitally able and helping to shape communities, channels and brands
- Clients are resourcing their digital team to deal with the multiple channels but agencies are still in charge as they lead clients through the space
‘New Media’ continues to be an over-used term as fresh challenges, and demands on marketers continue to present themselves in the digital space –constantly evolving and therefore always perceived as new and unknown.
The constant stream of new technologies and communication channels create a constant reliance on digital specialists, across a plethora of niche topics, to keep clients up to speed and help shape the industry for marketers. The constant battle to stay on top of change means that the lead agencies driving a client’s digital strategy are leaned heavily upon to lead them through the space.
With recommendations being stemmed from the agency, rather than initiated by the client, digital agencies are constantly adding new specialist individuals and departments to cover off new requirements as they evolve. Small specialist agencies also pick up business as digital agencies outsource some of the more ad-hoc skills (not wanting to pick up the overhead) and clients go direct for one off tactical campaigns.
Consumers are steadily increasingly their consumption of digital media – seeing it as a necessity in their lives. Social media has reached it’s peak in terms of penetration– with consumers tiring of peaking at other peoples lives and, instead, using it as a space to share and play with their closer friends, as well as create new connections with individuals who share similar specialist interests.
Technology has continued to expand rapidly amongst the big platform players with many adopting an open source development approach as they see the value in the power of crowds. Brands are also beginning to see the value of this as a method for reducing their production costs and welcoming creativity, and development, from new sources for both ideation and production alike.
Taking a deeper look
Consumers are heavy (and saavy) digital users
Consumers of 2015 have more options available for their technology needs. Personal computer prices have fallen but costs have remained comparable to 2009 as processing, hard-drive storage and applications demand higher spec machines – outweighing demand for low cost (and lower spec) products.
These higher specs are in part needed to drive online gaming and virtual communities as we see the demise of the console (with individuals fed up of the constant battle to upgrade hardware) and the rise of online gaming sites that stream games on a subscription basis, or within a community structure, direct to your PC or through a TV box.
The use of online subscription accounts is increasingly common with individuals hosting data virtually putting a trust in external partners to manage their music, photos and data. This move has been caused by a general acceptance amongst consumers that they don’t need to have physical products. This acceptance has been caused across the last 5 years by the increase in MP3 downloads, digital photography (and photo-share), the kindle reader and virtual data storage, all working to increase the value consumers place on ‘digital’ ownership of products. This move has driven computer literacy further as consumers start to have to expand their knowledge to use new hardware and manage their digital content. This thirst for personal knowledge continues to help drive the industry further as digital partners are able to add more functionality and tools to their spaces – allowing users to help develop sites and apps as the younger audience in particular begins to master basic CSS and programming skills.
The government have successfully continued in their mission to create a “digital Britain” and successfully met their objectives. Most importantly they’ve managed to develop the nation’s digital skills at all levels and secured universal access to broadband, increasing its take-up and using broadband to deliver more public services more effectively and more efficiently (Digital Britain, 2009).
Landline phones have begun to decline in ownership, particularly amongst younger households, as the growth of VOIP continues to offer a low cost alternative, with providers like Skype being the big winners. In addition to this, mobile phone penetration and tariffs have dropped to a point where 2015 sees mobile phone ownership (by household) exceed fixed telephone line ownership (Euromoniter, 2009).
The growth of mobile phone usage for web access in particular has meant that personal mobile data is being shared more frequently between consumers and third parties. The early days of email is beginning to repeat itself as the government struggle to regulate data protection on mobile devices, and spam becomes a recurring handset nuisance.
Specialist and niche sites are on the rise
As consumption of digital rises users are on the look out for new ways to spend their time online. Consumers become driven by seeking out like minded people with like minded interests and we see a surge in communities and sites tailored around specific topics and interests. With specialist communities forming we also see a move in the number of sites being managed by groups of individuals – for both personal, and professional interest, with a growth in the number of bloggers.
This growth in special interest sites has created challenges for brands as they become unable to create large-scale integrated campaigns. Audiences have become fragmented, and whilst there are still high reach spots available on sites like YouTube and Facebook, brands have to seek out tailored campaigns in order to hit ROI objectives. The addition of also being able to understand specific interests within your brands remit also warrants additional budget. The ability for brands and agencies to enable campaign messages to be tailored to very specific audiences and ensure maximum audience engagement guarantees a better ROI (at a production price).
With specialist communities and interests cropping up a whole new requirement for digital specialists to understand the online behaviour of particular audience segments is in demand. Specialist digital agencies and freelancers begin to take advantage of this, looking at common audience types (Over 55’s, 18 – 24’s, Under 16’s) in order to monetise this understanding of digital behaviours, with brands and agencies tapping into them in order to ensure the space is used correctly.
Digital knowledge is concentrated to agencies
This fragmentation of media and sheer volume of channels, audience segments and engagement contact points means that the amount of knowledge needed is immense. Clients aren’t able to physically keep up with channel developments, their audience movements and subsequently place a heavy reliance on the agency to steer them through the space.
With a gradual loss of control (client side) as well as the increase in the number (and type) of campaigns being run by anyone brand, at anyone time, has seen an increased pressure put on the client resource. Brands have begun to resource up their team, dedicating specialists to areas that they see as critical to their strategy (mobile, web and social media are commonly having their own brand managers). Client side these brand managers work closely with each other, and each agency, in order to deliver the digital strategy.
The increase in resource has also led to an increase in the importance placed on getting the digital marketing right as increased investment places an even bigger demand on ROI. Senior marketing staff client side are forced to get involved, increased their understanding, and getting hands on in the decision making process in order to deliver the results back into the business.
This is having a positive effect on the digital agency as technical ignorance begins to disappear. Development, hosting, purging, bugs and virus’ begin to be terminology with problems that occur day to day now seen as something created by the channel, not agency excuses. Clients are forced to deal with these issues and explain them to senior staff making them understand the explanations rather than see it as technical jargon being palmed off on them as excuses.
Growth of specialist agencies
The industry overall is similar in terms of types of agency to 2009 with a range of traditional, digital and specialist agencies co-existing and vying for clients digital investment. The biggest change though is the growth in the amount of competition in the specialist sector with an array of small specialist individuals and agencies springing up to deal with and offer services within the digital area. Services vary massively with reputation management, social media, community generation, social gaming, mobile application development (Android / iPhone and Blackberry specialists) and content specialists pitching within the marketplace.
This continued increase in agency numbers has kept prices down. Smaller specialists can afford to work on lower rate cards with freelance and / or ‘one man band’ mentality and less overheads enabling them to win projects based on price. This competitive pricing also gives clients a reason to deal with the inconvenience of splitting business across multiple agencies.
To retain all elements of the larger client accounts, the larger digital networks and traditional agencies with digital offerings are forced to cut prices or tag on added value ‘free’ services to compete and retain ownership of their clients business.
The amount of agency choice in the marketplace leaves clients broadly sitting in one of two camps. The first that sees adequate resourcing and expertise at the client end to conduct and lead a number of agencies within the digital space enabling them to benefit from competitive prices and carefully juggle multiple communications. The second sees a stretched client resource relying on working with one lead agency, aware of other services available but unable to take real advantage from these, leaning heavily on the agency to master the skills or outsource specialist work when appropriate.
Brands begin to open up their platforms to give consumers more control
With a vast amount of specialist skills, channels and audiences available brands are beginning to feel braver about opening up their brands for consumers to control. Open source, whilst not a new concept is beginning to move into the public space as an area previously used mainly by developers or for feedback begins to expand out further.
Brands are beginning to use crowd sourcing techniques to help the agency create the right digital ideas. This use of panels and / or a section of the public to help shape the brand is increasingly important in areas where the brand, and even agency, hasn’t been before. Using sophisticated reputation monitoring tools brands are able to identify key contributors and influencers in target niche subjects, and areas, and use their power to successfully launch an appropriate campaign to the target market.
Agencies are opening up their planning departments to allow for research into these niche areas and admitting to clients where areas are unchartered. Clients, rather than being nervous about moving into new areas begin to embrace these as it leads to them being able to gain competitive edge (by being first to market). Digital agencies continue to be exploratory but, by now having the experience into how best to enter new areas and channels, the client feels more secure because the methodology of ‘entering new channels’ is now tried and tested even if the solution isn’t.
 OnLive launhing in 2009 give a snapshot into the possibilities for the future: http://news.bbc.co.uk/1/hi/technology/7969044.stm
 Kindle launched in 2009: http://www.guardian.co.uk/technology/2009/oct/07/amazon-ebooks
 Euromoniter: Technology, communications and media report Oct 2009.