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Do Digital Shops Need to Worry?

By: Dwayne W. Waite Jr.

Agencies, for quite some time, have been shifting to specialization. From creative shops to crowdsourcing and to specializing in niche markets, many agencies have decided to ditch the general market pitch and hone in on a certain activity or audience. In this technology-driven market, it is only fitting to see that the fastest growing niche agencies are social media and digital.

Big and small agencies alike are fighting to gain the highest foothold in the digital and mobile markets. Truth be told, many agencies in this arena are still trying to figure out what exactly they're doing. Some have a pretty good idea, and seem to be doing well.

Then bigger shops and holding companies do what they do best. Why build a competency when one can buy it?

In a few short months we have seen the biggest independent digital agency, AKQA, and one of its formidable competitors, LBi, get bought out by WPP and Publicis, respectively. With AKQA's purchase, WPP now has the largest digital portfolio out of the holding companies. And with LBi's purchase, Publicis is quickly growing big enough to land harder punches on the likes of IPG, WPP and Omnicom.

Michael Nutley of CMO.com raises the question: Are these deals the beginning of the end for digital specialists? With the downsizing of agency rosters, and brands looking for "biggest impact at the lowest cost," will these deals by holding companies kick smaller digital shops out of the competitive marketplace?

Chances are, probably not.

Will these deals set the smaller shops at a disadvantage? Absolutely. When it comes to a race for resources, all small agencies will be trumped by holding companies. That's a race that cannot be won. But we do politely disagree with the notion that WPP's and Publicis' deals will end the digital specialist. But the digital specialist will have to rely more on their work and show brands that are trying to consolidate that they are worthy of making the cut.

At last, digital shops are now no longer the new guys on the block. They have to face the same issues that the rest of the small agencies have been dealing with.

Time to start proving yourselves relevant, and that you're not 'dead'. Welcome to the club!

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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