There’s been a steady drumbeat of technology IPOs this year, with staggering valuations of software stocks. Recent IPOs are up an average of 28% in the last month alone versus the entire software market that’s up 13% in the same period, according to Investor’s Business Daily.
If you’re an advertising agency, you’ve contributed to the success of these software stocks by recommending various products to your clients or investing in multiple SaaS solutions. But how many of those solutions are making money for you? Agencies shouldn’t put money toward more tools that could potentially have zero ROI. You really need to invest in technology that easily allows you to add new services so that you can be more competitive and profitable. These new services should benefit your clients so much so that they can be billed directly, helping you cover the tech investment.
CHALLENGE THE STATUS QUO
It’s already an incredibly challenging market for all ad agencies. For small to mid-size agencies, you’re facing competition from large shops that have tremendous scale, service providers like Google and Facebook are trying to cut you out of media planning, vendor solutions are going brand direct, and consulting firms like Deloitte are building competitive practices. You’re also dealing with having to choose from a growing number of tech solutions for executing digital and mobile strategies.
But what we’ve noticed over the last few years is a disconnect in how agencies standardize their practices for clients. You’re limited by the technology you’ve already invested in and by the ability of that technology to create multiple avenues of excellence.
Traditionally, if you wanted a programmatic solution, you used a DSP. If you wanted a way to access third-party data, you or your client licensed a DMP. If you wanted to understand the people visiting your client’s site, you leveraged another combination of three letter acronyms, from TMS to GTM to CDP. We need to break the cycle of disconnected technology and data if agencies are going to succeed.
MAKE DATA YOUR KING
You should be making the transformation to the agency of the future by weaving deep consumer insights into all aspects of what you do. Data-aware and data conversant are table stakes. There’s a recurring theme around how customer data will keep transforming marketing, according to AdAge. Brands will need a data strategy and the right technology to allow them to analyze and draw insights from data to better inform their overall marketing strategy and drive more effective engagement through activation or other channels.
Agencies have the ability to adapt. We’ve seen smaller and independent shops successfully taking business from larger firms as clients want faster innovation and more focus on one-to-one marketing and less focus on massive scale media plans that have looked the same for the last five years. This is good news but you still need to deliver value.
Agencies need to rethink the way they’re using technology to help clients as brands demand more data-driven solutions for their advertising and messaging. You should be investing in technology that isn’t just a SaaS product that checks off a box, but actually gives you a way to offer something new to your clients like “outcomes as a service,” “persona development as a service,” “audience insights and reporting as a service.”
START SEEING INCREMENTAL DOLLARS
Based on this “as a service” model, we’ve been urging our agency clients to treat the Resonate consumer intelligence platform as a client-funded initiative. We’re leaving it up to you to build the price points for these “as a service” offerings. This allows you to sell outside your current scope of work for incremental dollars.
Did you catch that? Incremental dollars? You can add value to the work you do for your clients by offering deeper, richer analytics and insights while seeing the ROI of your tech investment much faster.
Want to learn more about how Resonate can help you grow revenue? Reach out and we’ll tell you!