Undergraduate senior thesis about digital agencies and their involvement in integrated marketing campaigns

1. Challenges Faced by Digital Agencies in Creating Integrated Marketing Campaigns for their Clients Senior Thesis by Lindsay O’Hara

2. Agenda Introduction Research questions Literature review Study 1 Method Results Study 2 Method Results Discussion Limitationsand future research

3. Introduction What does the study focus on? Relationships between digital agencies and their clients as well as client’s partner agencies How collaboration and communication between agencies most often occurs Why study this topic? Interest in how digital agencies are integrated into a client’s overarching campaign Lack of current research on the relationship between agency partners

4. Research Questions When and how do partner agencies working with the same client communicate and collaborate? Do digital agencies feel satisfied with their role in working on client campaigns? In which functional areas does most client influence occur? In which functional areas does influence from client’s partner agencies occur? Does agency size contribute to the differences between digital agencies and traditional agencies?

5. Literature Review

6. Integrated Marketing Communications in the Digital Age IMC is “an audience-driven business process of strategically managing stakeholders, content, channels, and results of brand communication programs” (Kliatchko, 2008) By creating a message that transcends multiple channels, the client can coordinate a synergy across all media elements that strengthens the effectiveness of the communication (Stammerjohan, 2005; Kliatchko, 2008) Although a majority of agencies agree they use IMC approaches with their clients, only a quarter of those agencies rated their program’s quality highly (Liodice, 2008) Lack of strategic consistency across communication disciplines and entrenched silos within marketing organizations and agency partners are barriers to successful IMC (Liodice, 2008) Literature Review

7. Digital versus traditional agencies Clients are beginning to place less importance on the type of agency handling their business and more on their creativity and quality of work (Parekh, 2008) Another factor in comparing traditional to digital agencies is their size. In a 1997 study done by Schultz, he found that small agencies contributed more time developing integrated marketing communications with their clients than large agencies. Liz Ross, American President and Global CMO of Tribal DDB Worldwide, also stated “a lot of the old, bigger agencies are trapped in their old structures, so it’s really about who has the best talent” (Parekh, 2008) Clark Kokich, CEO of Razorfish, was quoted in a 2008 article by Parekh stating, “ten years from now, all agencies will be digital agencies” (Parekh, 2008) Literature Review

8. Agencies and their relationships with clients Client influence on their agency’s work may vary depending on the specific agency function (Waller, 2010) Because agencies hold the expert power in creative work, the client should exert less influence on creative work than other functions such as marketing development. (Waller, 2010) Literature Review

9. Integration between a Client’s Partner Agencies While in the past, clients tended to keep strong barriers around individual agency disciplines, today they are coordinating agency functions through IMC and increasing communication effectiveness and consistency (Ewing, 2000) Developing a clear brand strategy first and using it to drive each discipline’s work is important in creating effective IMC campaigns (Liodice, 2008) The synergy created by IMC requires strong coordination among diverse agencies (Ewing, 2000) Literature Review

10. Study 1 Interviews

11. Method Interviews, 20-25 minutes long Questions focused on communication and relationships with client and their clients’ agency partners Officers at digital agencies (names have been changed) Jacob, Chief Operating Officer, Digital Agency, ~40 clients Ethan, Partner, Digital Agency, ~130 clients Alex, Chief Marketing Officer, Digital Agency, ~50 clients Will, Chief Strategy Officer, Digital Agency, ~50 clients Study 1 Method

12. Communication between agencies important on the front end “Alignment around a creative idea that will drive execution across all different mediums” –Alex Communication is “incredibly important early on” - Jacob Study 1 Results

13. Collaboration with other agencies may depend on the agency’s function “Social media is one area where there is more collaboration because often the PR agency has a bigger place there” - Ethan TV and Print have one deliverable, so collaboration occurs on the front end – Alex Digital, PR and media work with a lot of moving parts, so collaboration is important throughout - Alex Study 1 Results

14. Disagreement on degree of satisfaction with the role digital agencies play in a client’s overarching campaign “Increasingly so because clients are spending more of their time including their digital agencies in upfront planning” – Jacob “As a motivated professional, there is always the ability to do more for the client and desire to do more for the client” – Ethan The world is transforming dramatically, actually lead agency for some clients, taking more and more work – Alex “Typically clients gear towards giving the work to the traditional agencies because they’ve always worked with them and they’ve already given them most of the budget to retain the staff, but my argument is that in this new world they just don’t get it. They’re not living, breathing, sleeping, loving the digital world, where we in the digital agency do.” - Will Study 1 Results

15. Clients should influence the business objectives (what and why) of the campaign instead of the creative development (how) “Typically try to focus questions on what they want to accomplish and why they want to accomplish it instead of how do they think it should be accomplished” - Ethan “Know what they’re trying to accomplish, where you are delivering them what they ask for but giving them a new way to look at it” – Alex “The thing you always try to come back with is getting to a good brief at the starting point” – Will Study 1 Results

16. Digital is increasingly integrated into the central idea of a campaign, causing need for collaboration throughout campaign development “Collaboration is really critical around the touch points” – Ethan “We need to have more collaboration than ever to get that consistency” – Will Study 1 Results

17. Much of the digital vs. traditional agency debate may come back to size of the agency “Less around digital vs. traditional, more about the size of the company. Smaller companies tend to be more innovative and larger companies tend to be more process-focused” – Jacob “Digital agencies are often smaller, growing companies that are used to taking risks. They’re entrepreneurs, they’re people that have had to grow their business from scratch, and fight and push and sell and put the foot in the door if they can get more work, which leads to a cultural way of thinking.” – Will Study 1 Results

18. Digital and traditional agencies may continue to merge and just become “the agency” “What 5 years from now is a ‘traditional agency’ will have pretty decent digital shops.” – Ethan “Stop defining them that way, but just defining great work. Model in future holistic agencies aren’t defined by what they deliver, just great work” – Alex Digital agencies are trying to get “better and better and [develop] the skills to approach being ‘the agency’” - Will Study 1 Results

19. Study 2 surveys

20. Method Online survey, 5 minutes to complete Questions developed based on Study 1’s interview results Invited 86 agencies via email from Top 50 Digital Agencies (Advertising Age) Member list from Society of Digital Agencies 11 participants Study 2 Method

21. Respondent demographics Study 2 Results

22. Respondent demographics Study 2 Results

23. Client influence on Digital agency functions Study 2 Results

24. agency partner influence on Digital agency functions Study 2 Results

25. Client vs. agency partner influence Clients may exert more influence (M=3.0) than agency partners (M=2.4) on brand and business strategy (T=1.348, p=.214) Clients may exert more influence (M=2.6) than agency partners (M=2.0) on website and app development (T=1.964, p=.081) Clients may exert more influence (M=2.4) than agency partners (M=1.9) on mobile strategy (T=2.236, p=.053) Clients exert more influence (M=2.6) than agency partners (M=1.9) on search performance and optimization (T=2.333, p=.045) Study 2 Results

26. Stages in Communication Prevalence Study 2 Results

27. Stages in Communication PrevalenceLarge vs. small agencies The prevalence of communication during the production of a campaign may be dependent on an agency’s size (X2 = .2.933, p=.087). Large agencies were more likely to view communication with agency partners as important during the production stage because 40% of large agencies ranked it as important compared to 0% of small agencies. The prevalence of communication during review and analysis, implementation, planning, strategy, or research phase of a campaign is not dependent on an agency’s size. Review & analysis (X2 = .749, p = .387) Implementation (X2 = .782, p = .376) Planning (X2 = .1.32, p = .251) Strategy (X2 = .02, p = .887) Research(X2 = .782, p = .376) Study 2 Results

28. Satisfaction with Role in Client’s IMC Efforts Study 2 Results “Less opportunity to drive our own process and it throws off our work as we retrofit our work and insights to fit into other agency and client timelines.” “In our specific case, a lot of agency partners are involved with equal voice and little to no moderation from the leading agency. This leaves agency teams pulling in different directions, often times based on their core competency.”

29. Discussion Integration between client’s agency partners is important on the front end of an IMC campaign’s development Mixed responses to digital agency’s overall satisfaction in the role the agencies play for their clients indicates controversy Client influence is strongest when developing business and marketing objectives rather than tactical creative executions

30. Limitations & Future Study Limitations Limited number of interview studies Limited number of survey results Future Study Speak to other agencies Traditional, PR, media Speak to clients

31. References Ewing, M. T., De Bussy, N. M., & Caruana, A. (2000). Perceived agency politics and conflicts of interest as potential barriers to IMC orientation. Journal of Marketing Communications, 6(2), 107-119. Keller, K. L. (2009). Building strong brands in a modern marketing communications environment. Journal of Marketing Communications, 15(2-3), 139-155. Kliatchko, J. (2008). Revisiting the IMC construct. International Journal of Advertising, 27(1), 133-160. Liodice, B. (2008, June 9). Essentials for integrated marketing. Advertising Age. Retrieved February 16, 2011, from http://adage.com/cmostrategy/article?article_id=127599 Parekh, R., & Klaassen, A. (2008). As the lines blur, digital agencies are taking lead. (Cover story). Advertising Age, 79(40), 1-27. Schultz, D. E., & Kitchen, P. J. (1997). Integrated marketing communications in U.S. advertising agencies: An exploratory study. Journal of Advertising Research, 37(5), 7-18. Stammerjohan, C., Wood, C. M., Chang, Y., & Thorson, E. (2005). An empirical investigation of the interaction between publicity, advertising, and previous brand attitudes and knowledge. Journal of Advertising, 34(4), 55-67. Waller, David, Shao, Alan T. and Bao, Yeqing (2010). ‘Client influence and advertising standardization: a survey of ad agencies’, The Services Industries Journal, First published on: 10 August 2010