You hear this frequently from digital agencies when they pitch their services to marketers:
“We are full-service”. “We handle all parts of the customer experience”.
My recommendation for all marketers is to stay away from any small agency with that offering… unless you want just-good-enough results.
I started in digital in 1997, and in 2000 joined Blast Radius. We were the “digital” agency and often referred to ourselves as specialists. But today, as we move into the latter half of 2017, the marketing technology landscape has become larger and more diverse than ever before. Technology continues to evolve at a frantic pace, digital competition increases, skill-sets deepen, and processes become specific. The very simplified diagram below conceptually elaborates the changes in the digital landscape from 2000 to now:
It’s far from perfect, but it represents the growth in digital, and the creation of sub-categories, and even sub-sub-categories over time. In 2000, agencies were able to grow and flourish by offering an “all-inclusive” digital experience. In 2017, this is no longer the case. We are deep in the “digital era” with technology and process depth in each sub-category and increasingly high user expectations; simply put, it is impossible for any small or medium size agency to master every category.
Mature agencies recognize that differentiation is the key to success. Specializing in a particular sub-category creates uniqueness and advances one’s growth rate over the competition. By mastering a particular specialty, smaller agencies begin to attract the attention of bigger global brands — who despite building their own teams, still want the specialist. All the other full-service ones are just-good-enough.
Smart marketers today pick agencies similar to how a general contractor would pick sub-trades for building a home. A good contractor doesn’t go to one person to do everything, instead they will find the best people in a specific trade to do the necessary tasks. The accumulation and organization of these experts create your home. Marketers put together their digital strategy in a similar fashion; they don’t look for the all-in-one marketing firm of yesteryear, but rather, they look for agencies that are the best in a particular category.
What is specialization?
Specialization is created through unique skills, processes, and technology.
- Aligned Skill Sets
- Advanced Process
- Deep Technology Expertise
- Unique Culture
The 3 Types of Specialization: In a market analysis of 200+ small companies conducted in 2015 and early 2016, we found a plethora of digital agencies in every city, of every size. The conclusion was that the agencies with less than 100 employees are best suited to specialize in a particular category or sub-category. If you look at the service offering on their website or LinkedIn, it is easy to distinguish the generalist from the specialist. For example, below is the profile of a 50 person digital shop in Toronto (Agency A) that specializes in consumer engagement.
You can clearly see their focus.
Here is the service offering of another small agency (Agency B) on the west coast that focuses on e-commerce conversion.
They work with many global brands and have an excellent retained business.
We categorize into 3 buckets…
- The Builders of the House
These are the builders of marketing platforms like Starbucks.com or flagship stores like lululemon.com. These agencies combine variety of elements like strategy, technology, and UX to create and manage consumer engagement experiences. They have excellent processes, tech partnerships with platform vendors in the areas of CMS, Commerce, mobile frameworks, and project management rigour.
They will be experts in:
- Content Platforms
2. The Party Planners
Content is king in 2017. A great marketing strategy ultimately starts and ends with great content. You can build the best platform, design the best website, but if the content you produce doesn’t elicit engagement, it doesn’t matter what you do on the backend. The “Party Planners” are your content producers and brand engagement specialists. Agencies that offer these services are specialists in designing content-led experiences that are meant to grab your attention and elicit participation. “Party Planners” may have the most liberal freedom to specialize in multiple areas, because brand content covers such a vast range; however, they will still be seen as content and social marketing experts, that are the best at driving engagement for your brand.
- Branded Content
- Social Marketing
- Technology-enabled content
3. Number Crunchers
Marketers are overwhelmed with the volume of data that is available to them, coupled with the demanding requirements of executing marketing efforts. Agencies that fall under “Number Crunchers” help marketers understand the data and drive better results based upon what information that data tells them. They will use data architects and technology to generate leads and conversions. They can go deep and broad but their core skill set is analysis and recommendations based upon data.
They will be experts in:
- Media Optimization
- Data Intelligence
- Conversion Optimization
If you look back at Agency A, it is clear from their offering that they are a Party Planner. And Agency B is a Number Cruncher.
What isn’t specialization?
Nowadays, when you hear the term “digital agency” offering a full-service experience, there is a good chance that they are not specializing in any one particular area. The sanity check is a quick look at the extent of their service offering as compared to their size. Here is an agency in New York whose service offering is extremely broad — from social media to e-commerce to advertising…and they list less than 50 people on LinkedIn.
Ask them what are they the best at?
Can your agency be an expert in every category?
You may be thinking to yourself, why can’t we be a one-stop-shop for all things marketing? Simply put, the landscape now is just too big and requires too many skills for any one person, or agency with less than 100 employees to be able to master every technology and every process.
Being the best in a specific area requires time, knowledge, and strategic experience that drives results. If your agency is seen as the “expert” in a particular platform or field, you are more likely to be sought out for your particular skill set. Erin Keeley (CEO of mono) explains this idea in this Hubspot article:
“It’s incredibly difficult to differentiate among agencies…locally, specializing, either by focusing on an area of service (i.e. digital or social) or a particular industry makes sense because these are often the criteria by which prospective clients categorize agency partners. When an agency can enter a pitch room with a specialized area of expertise, it provides clarity and credibility”
Marketers are now reaching out to multiple agencies that each specialize in a particular domain to get the most effective results. As a result, to catch the attention of marketers, you will need to become the very best in a particular area of digital, whether it’s web design, content marketing, SEO or social media. Specialization truly drives the results that global brands are looking for.
The key message for agencies:
When deciding on the best strategy for your agency, pick an area of specialization that will best align with your expertise. Describe what you do succinctly, but more importantly, describe what you don’t do! Once your agency gets some traction in a particular niche, marketers will begin to notice. Now if you’re content on staying small, then this may not apply to you. But if you want to grow, specialization in a particular area is key. To succeed at this, you must perfect your craft, drive inbound sales, add value and ultimately, become the best in your field.
The conversation of specialists versus generalists doesn’t stop here — comment below or tweet us @apply_digital and let us know your thoughts.