Marketing agencies are facing many challenges moving into the coming year. But perhaps the biggest challenge of all is the shrinking of the average company’s marketing budget.
According to a Gartner report released in early 2024, organizations are scaling back on marketing. But, it’s not the first time this has happened. Marketing budgets were already starting to feel the pinch in 2023.
To win contracts in such a highly competitive economy, marketing agencies have to remain innovative and scrappy. At the same time, they need to bring more to the table for their clients — or risk losing market share. Some already know this and are leading the charge by reinventing their brands, processes, and offerings in a number of fresh, efficient, and effective ways.
1. They’re Joining Forces With Other Agencies and Suppliers
What do you do when you realize your service menu has a gap? In the case of forward-leaning marketing agencies, you consider merging with a company to round out your capabilities.
A great example of how this works is the recent Siteimprove acquisition of MarketMuse. By incorporating MarketMuse’s AI-driven content platform into Siteimprove’s lineup of services, Siteimprove instantly became more valuable to its existing and future clientele. The decision to acquire MarketMuse, led by a team including Izabela Misiomy, Siteimprove’s CMO, was cleverly strategic. In one move, Siteimprove made sure it could serve clients throughout every step of the marketing funnel.
Of course, mergers and acquisitions aren’t always right for every marketing agency. However, forming partnerships, whether formal or informal, shouldn’t be overlooked as one way of staying competitive. In today’s intense market, joining forces can mean the difference between seeming like every other agency or standing out.
2. They’re Embracing AI in All Its Forms
When generative AI and machine learning started entering the business world, many marketing agency executives weren’t sure how to make it work for them. Now, 60% of advertising agencies are leaning into products like ChatGPT.
This is smart thinking, primarily because AI-fueled software and systems can help all types of creative agencies stay productive. The less time their teams spend working on traditionally time-consuming tasks, the easier it is for them to focus on client-facing and revenue-producing efforts.
Some niche agencies are even making AI a core element of their service offerings. For instance, Influencity assists clients in finding influencer matches — including AI influencers. AI influencers are a whole new type of social media influencer, and Influencity is positioning itself as a leading authority on how to work with them. Essentially, the boutique agency is establishing itself as a standout by using AI in unique and innovative ways.
3. They Are Narrowing Their Scope
Sometimes, the way to scale up when staying competitive is to go smaller and deeper. This has certainly worked for plenty of marketing agencies that have narrowed their scopes. Rather than broadening their number of services, they’re concentrating all their resources on a few services that they can “own” within the marketing industry.
Consider the case of Sagefrog. It’s a B2B marketing agency that specializes in several sectors, including manufacturing, healthcare, and tech. Instead of trying to be “all things” to all kinds of clients, it’s designed to appeal to a specific type of company. As such, Sagefrog is making a name as a B2B marketing expert in those fields — and pushing out less knowledgeable competitors.
There’s something to be said for being known as the go-to agency in a select market. While it’s not right for every marketing agency, going narrow can provide a competitive edge that’s hard to match.
4. They Stay Open to “Old School” Solutions
It’s no secret that the modern world revolves around online everything. However, that doesn’t mean that marketing agencies have to stick with just digital solutions. Some are finding that it’s not such a bad idea to explore and use marketing tactics from the past.
From direct mailed pieces to old-school billboards, offline advertising vehicles are producing success for some marketing agencies and their clients. Recently, Digiday talked to marketers about the benefits of diversifying by looking backward, and all agreed that turning to retro techniques can open doors into uncluttered markets.
A notable upshot of going offline is improved engagement across all channels. Since most people require many touchpoints before buying from a brand, having some of those touchpoints in the “real” world makes sense. Some consumers may appreciate getting their marketing somewhere other than through their devices.
Keeping any marketing agency at the leading curve takes the willingness to be inventive and open-minded. As the marketing agency ecosystem only becomes more crowded with a steady influx of startup players all vying for a smaller pool of corporate clients, trying new strategies will only become even more important.
