The recently released State of Marketing report from the CMO Council contains great statistics for anyone looking to understand the direction of the marketing department in larger companies.  A key insight from the report addresses the long-established business relationship between ad agencies and their clients. Specifically, several business changes are converging to threaten this relationship.

Report analysts point out that the following trends pose the largest threats:

  • “Campaign execution and audience activation” are going digital
  • Businesses have sufficient digital resources to manage and demand concessions from multiple agencies instead of working with one master agency
  • Traditional agencies often lack capabilities to execute viral and mobile campaigns, especially on a national level

At the same time, businesses have access to more digital tools and are using customer data integration processes to build better relationships directly with customers. This, in turn, allows them to design and deliver “market-ready product and services.” Because agencies lack access to the customer data, they cannot play a role in the important emerging fields of customer analytics, predictive modeling or performance measurement.

The good news for agencies is that over half of marketers do not plan to change this year.  But changes may be on the horizon, based on the answers to the survey question: What agency changes do you plan to make in 2010?

  • None: 58%
  • Web design and development: 18%
  • Public relations: 14%
  • Interactive marketing: 12%

As marketers consider their changing needs for agency services, they also intend to improve go-to-market effectiveness by undertaking the following types of projects in 2010:

  • Digital marketing makeover platforms: 46%
  • Sales/marketing organizational alignment: 40%
  • Customer data integration and analytics: 32%

Numbers like these should convince every agency that expertise in one or more aspects of  digital media and data manipulation must be a key strategy for future growth.

[Source: State of Marketing  Outlook, Intentions and Investments for 2010. CMO Council]