How the digital agency of the future will work

Agency landscape is changing rapidly. Digital agencies in particular must constantly reinvent themselves, build up special knowledge and cover more disciplines in order to remain competitive. Where is the digital agency of the future heading?

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Not only companies have to adapt their business models, processes and structures in the course of digital transformation. Agencies are also challenged and are constantly having to reinvent themselves. Who wants to remain competitive, should think disruptively and have technological expertise. The tasks of digital agencies are becoming increasingly complex, granular and require specialist knowledge in various disciplines. A digital agency that offers marketing services to its clients has to deal with a variety of tools and emerging trends, which can inevitably mean specialisation in strategy and implementation. According to a recent survey conducted by iBusiness and Horizont, there are five key challenges in the dynamic business world of digital agencies:

  1. Increasing competitive pressure: More and more media companies and classic management consultancies are entering the market and competing with digital agencies for customers and specialists.
  2. Consolidation: Management consultancies are increasingly buying up digital agencies to provide customers with a full-service experience. As a result, there are fewer and fewer independent, owner-managed interactive agencies.
  3. Lack of skilled workers: There are too few qualified professionals such as UX designers, web/software developers and online marketing experts.
  4. Interaction of data and creativity: Know-how in the areas of data analysis and strategy is an important complement to an agency’s creative services. Those who don’t learn in this regard will fall by the wayside and won’t find buyers for their human creativity.
  5. Speed of innovation: This is driving digital agencies to become inventive. For example, Serviceplan has developed its own Innovation Studio to experiment with new technologies and digital products.

Thinking about your own digitalisation

The challenges and problems of digital agencies are often similar in nature to those of their own customers. It makes sense for digital agencies to try out and test the digitisation ideas, products and services they have conceived for themselves before letting them loose on their customers. This approach is new for many agencies. When it comes to digital products, many lack the willingness to innovate to create something truly groundbreaking.

For Amir Tavakolian, Managing Director of the digital agency Virtual Identity, the future will be about expanding the skillset and at the same time building up specialist knowledge: “On the one hand, I expect increasing specialisation in certain areas such as AI solutions, machine learning and the automation that this makes possible. On the other hand, the expansion in value creation will increase. We are already seeing this trend in the large consulting firms, which are horizontally integrating more and more services into their portfolios.” Digital agencies are thus torn between specialization and the expansion of their own services. Not an easy task in times when talents and specialists are scarce. This is likely to increase in the future as young talents become more and more aware of their own needs right from the start,” says Amir Tavakolian.

The digital agency of the future: between technological progress and human empathy

A digital agency that is familiar with AI solutions, automation and machine learning—is this what the digital agency of the future will look like? This is quite possible, because the use of such technologies is already a reality today. The digital agency Plan.Net designs and develops digital products and solutions in its own Innovation Studio. These include a Facebook chatbot for MINI and the Alexa Skill for HypoVereinsbank, which understands financial terms and converts currencies using voice commands. Specialist knowledge in the field of software and technology is therefore a must for the digital agency of the future.

Another example of the profitable combination of technology and creativity is provided by the digital agency BWM Dentsu, which helps people with the nervous disease ALS to regain their own voice with the Revoice project. For this purpose, the agency, together with the Canadian start-up Lyrebird, developed an AI speech clone that can reconstruct and copy their own voice from personal audio recordings. The non-verbal ALS patient simply controls the output of his words and sentences via eye contact, which are then reproduced in his sound and voice colour. With such innovations, agencies demonstrate their competence, are future-oriented and provide stimulus points for corporate customers.

Amir Tavakolian is convinced that the human-emotional component will continue to be important alongside the full concentration on software and technology: “In addition to technological skills, human empathy and entrepreneurial thinking in the interests of the client will become increasingly important in the future. We are already observing that decision-makers and service providers are repeatedly torn between personal perspectives and contributions to business.”

The bottom line:

If you want to survive in the market, you are well advised to differentiate and deliver quick-witted arguments in the form of special competencies and know-how. In doing so, focus is always placed on the customer’s own success, as Amir Tavakolian describes: “We often take our customers’ goals more seriously than they themselves do. I rarely see that in the market.”

The aim is to identify the digital challenges of the future at an early stage and provide answers to the problems of potential customers with tangible products and services. Digital agencies must constantly rethink and further develop their existing business models. Ultimately, it is up to each digital agency itself to create resources for internal change, knowledge and innovation.