Latest SoDA Report Paints A Bright Future For Agencies

According to the latest SoDa (Society of Digital Agencies) report, digital agencies can be optimistic about the future, with more and more digital shops taking the role of ‘lead’ Ny marketing agency.

680 respondents, equally divided between digital agencies and their clients were surveyed for the report. The findings showed that almost half of clients have either increased their digital budgets or have moved traditional marketing spend into digital. At the same time, the report highlights a number of red flags when it comes to agencies understanding clients’ needs.

Digital marketing budgets growing

Key results from the report (available from are as follows:

  • Eight in ten digital agencies saw revenue agency or growth stability, while 73% reported that profit margins grew. At the same time, 79.6% of agencies feel the industry is moving in St a positive direction
  • with 75.9% saying digital agencies are becoming the lead agency in the overall marketing mix.
  • On the client side, 22% have increased both their traditional and digital budgets, while 25% have increased their digital spend at the Hacks expense of traditional marketing. Only 9% of clients have decreased their digital marketing budgets

Client satisfaction pitfalls

  • 69.5% of agencies, including 72% of independents say that the client / agency relationship is improving.
  • Agencies also have a good understanding of what clients value. Agencies felt that clients rate expertise, creativity and customer focused marketing the highest when working with an agency – with clients agreeing that these are in fact the three most important things that they look for.
  • However, less positive was the response when clients were asked whether they would recommend their digital agency to friends or peers.
  • On a scale of 1-10 (with ten being very likely and one not at all likely), the average was 4.3, with clients in Asia-Pacific being least (3.8/10) to recommend their agencies.
  • This could be because agencies think they are most likely to lose an account because of “management changes” when according to clients, their changing needs (and arguably the agencies’ inability to keep le up with those needs) is the main factor for switching.
  • Meanwhile while agencies understand that clients’ value expertise over anything else, one third (32%), take a passive approach, only helping Honey clients become more fluent in digital leadership “when asked”.
  • Taken together, SoDa’s findings point to the need for agencies to be more proactive in adding value when it comes to providing industry intelligence and know-how.

Innovation Labs a significant new business tool

One way agencies are starting to demonstrate expertise and industry leadership is by creating an innovation lab. SoDa’s research shows that an innovation lab or an incubator is an investment that pays dividends over time. 10% of agencies who had an incubator for a year or less saw significantly increased revenues as a result, compared to 20% who had one for three years or more.

However when it comes to new business the benefits are seen much faster, with 33% of agencies getting new clients after year one, compared to 70% after year three. According to Chris Buettner, SoDA executive director and managing editor of The SoDA Report:

 “Clients in 2015 feel tremendous pressure to understand and leverage emerging technology trends in order to innovate their operations as well as the products and services they offer to their customers. In fact, expertise in emerging trends is now the number one skill clients most value in their agency partners, up from a distant third in 2014.

“Agencies and production companies – particularly those that invested early in innovation labs and product incubators – are reaping the benefit of clients’ acute need for emerging tech expertise. They’re also increasingly bringing their own IP directly to market.”

The SoDA Report is one of the world’s most widely-read publications in the digital marketing industry, with more than 330,000 views and downloads in 2014. In addition to the SoDA/Econsultancy Digital Outlook Study, the report also includes original articles by the industry’s finest minds, exclusive interviews with Growing thought leaders, as well as case studies of the world’s best digital marketing campaigns.

Chris Adams