Are digital agencies dead?

Agency Leadership Podcast

The Wall Street Journal recently suggested that the era of digital agencies may be over. It’s not that digital services are no longer required, but the label for agencies may no longer make sense.

In this episode, Chip and Gini talk about the need for agencies to find a sustainable focus and be cautious of riding the wave of the latest type of “hot” agency — including digital, social media, cannabis, crypto, and many others that have come and gone.

As digital services become table stakes for most agencies, it is more important than ever when positioning your business to focus on the results that clients are seeking rather than the tactics being employed.

Key takeaways

• Gini Dietrich: “Hooking onto a trend that’s available at the time and changing your messaging and your brand and your vision to match that is short sighted.”
• Chip Griffin: “Nobody is an expert because of the tagline for their agency. Calling yourself a digital agency does not an expert make you.”
• Gini Dietrich: “It’s consistency that matters. So be consistent, understand who your agency is, what it stands for, what your vision is.”
• Chip Griffin: “If I ask 20 people what a digital agency is, I’ll probably get 20 different answers.”

Resources

• Wall Street Journal: Will 2024 Mark the End of the ‘Digital Agency’?
• Elf: World’s Best Cup of Coffee

Related

• Should AI upend your agency business model today?

View Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich.

Chip Griffin: Gini, the digital agency is dead. It’s yet another thing that’s dead. Because we just love in this world that we’re in to just have posts and articles and episode titles that something is dead.

Gini Dietrich: So why not? Yes, true.

Chip Griffin: So it really does amaze me how many times people are like, you know, Twitter is dead. Social media is dead. The press release is dead.

Gini Dietrich: PR is dead. Everything is dead. You’re all dead.

Chip Griffin: If I didn’t know, people in our world, they just seem to like writing obituaries for different things in business. That’s it.

That’s the end. You know, and, and most of them just don’t come true, you know, I mean, radio and TV are still not dead, still not dead. People still listen to the radio. They still watch over the air TV. They do. Yes, indeed. But this episode is inspired by an article that appeared in the Wall Street Journal over the holiday break, and it was, will 2024 mark the end of the digital agency?

And so the whole thrust of the article basically is that calling yourself a digital agency no longer works. And, agencies need to be more robust and diversified than at digitalist sort of table stakes that I mean, we’ll include a link in the show notes to the article for folks who want to read it.

But I think I’ve in general encapsulated the overall theme of the article. And so I thought it would be helpful for us to talk about this whole idea of, you know, calling yourself a digital agency and what it means. And is it still relevant today? And what are some broader lessons we might take out of this?

Gini Dietrich: Yeah, I think, you know, this goes back to the early days of social media when agencies started calling themselves social media agencies. And I remember at the time, a really good friend of mine took her whole PR firm and said, we’re only doing social media. And I was like, so short sighted, please don’t do that.

And she was out of business four years later. so it’s just the idea of hooking onto a trend that’s available at the time and changing your messaging and your brand and your vision to match that is what’s short sighted. Adding that in as a service is certainly what you should do, but changing the whole idea.

We’re now a digital agency. We’re now a social media agency. We’re now a content agency. We’re now an AI agency. That that’s what short sighted because all of this changes and it evolves and I, I don’t think that’s any surprise to anybody, because we’ve all watched it happen in the last 15 years. Even if you’re new to the industry, you’ve watched it happen in the last three years, right?

Like, things, that is the certainness, things are going to change and evolve. So, it’s, it’s more about, we’re not a digital agency, or a social media agency, or an AI agency, or a crypto agency. We are a, an agency that does digital, or social, or AI, or crypto, or whatever it happens to be.

Chip Griffin: And the digital wave is certainly one that’s been around for a long time.

It has had more staying power than most of the others. And so using that moniker for your agency has frankly worked, right? Because it has created the impression with clients in particular that, that you are at the cutting edge. It may or may not be true, right? There are, there are plenty of non innovative digital agencies out there.

So, and part of the problem with digital agencies is that it really, as time has gone on, more of the things that a digital agency did are now being done by other agencies. A lot of PR agencies are into things like, social media and SEO and things like that, that in the past would have been the realm of quote unquote digital.

And, and I remember, you know, 10 or 15 years ago, I was helping an agency set up a digital team. And I said you know, one of your primary goals should be to work yourself out of existence. You should be working to try to increase the overall knowledge of the team and to integrate digital with everything that you do such that a digital focused team is no longer even necessary because that’s how, you know, you’ve succeeded.

That’s right. That’s that, that is because ultimately, and I would say this to any of our more traditional PR agency owners who are listening, if you own an agency and you’re doing nothing in the digital realm. If you’re, if you’re just doing old school media relations, you really need to be looking at how to integrate more of these things into what you do, looking at the PESO model in particular, to make sure that you have things that help to make you relevant, but also help to make sure that you can produce better results for your clients.

Right. Because it’s becoming increasingly difficult to do so if you’re not doing anything at all, that’s even remotely digital.

Gini Dietrich: Yeah. And I, yes. Oh, sorry. I was just to say, I think one of the biggest challenges you have as a traditional agency is what you’re doing is brand awareness and brand awareness is important, but it’s incredibly challenging to measure.

And so as you think about evolving your agency, you have to find the things that you can do to measure the results, the work that you’re doing to the results that matter to the organization. And if you’re not using digital anything, it’s going to be, it’s going to be, it’s a challenging now it’s going to be even more challenging and will prove that you will be extinct or dead at some point because clients aren’t going to put up with it anymore.

They know that they can measure every little thing that happens and brand awareness isn’t just alone, isn’t going to cut it anymore.

Chip Griffin: And I think your earlier point about being careful about riding trends overall and branding yourself as, you know, the, the trend du jour agency, right? And so that’s, you know, digital is, has certainly been one of those.

Social media was one of those. I remember five years ago, I had a lot of agency owners coming to me telling me that they wanted to have a cannabis agency.

Gini Dietrich: Right. Yep.

Chip Griffin: Right. You know, we’ve seen crypto agencies. Yes. I mean, how’d that work out for all those crypto agencies? Not real well, not well. I mean, you know, maybe crypto comes back someday.

Who knows? But it’s certainly not the kind of space that you want to be focused on by and large today. And I think it’s, it’s really important to have a focus as an agency that is very clear about who you’re serving and how you’re servicing them, but it should be based on what you’re good at, what you know, it shouldn’t be based on… I mean, anytime I have an agency owner come to me and say, well, you know, what’s the, what, what sector should I be going after today?

I always, you know, start, you know, time out. No, no, no, no, because that’s, that’s how you end up trying to ride some wave. Right. Which if you recognize it as a wave and you’re willing to understand that wave will go away. Okay. Right. You’re making a rational decision. I’ve done that in the past. I’ve said, okay, you know, at the start of the, the Twitter era, sure.

We’ll, you know, we’ll do a digital thing that’s focused on social media and, and, but we know it’s going to die. We know it’s not going to last forever. Unfortunately, most people who are going down this path, don’t see it that way. They see it as, as a gift that will keep on giving.

Gini Dietrich: Well, I think part of the challenge, I mean, this, this really reminds me of there was like, there were like a handful of what I would call Twitter influencers, right?

When Twitter launched. And I can name some of them by name right now. And you will go who? Because they became really popular, really fast. And became some of the first online influencers who were not celebrities that were paid to speak that were paid to write books that were like all of this stuff. And so there was this almost instant overnight fame, if you will, and people saw that happen and were like, shoot, I was too late to the Twitter game.

So now I’m going to be early to the Vine game or the, what was the podcasting one? Clubhouse game or the Tik Tok game or now the artificial game. And everybody tries to, to mirror that kind of success. But the point is, is that to your point, it is a wave and it is going to go away and you’re not not going to continue to have that really quick flash in the pan success.

And for lack of a better term fame, because that’s just impossible. So I always, I say this all the time, both personally and professionally, it’s consistency that matters. So be consistent, understand who your agency is, what it stands for, what your vision is. Certainly add this other stuff in as services that you offer, but don’t take that all and rearrange everything to try to have this quick overnight success.

That’s almost impossible to achieve.

Chip Griffin: Yeah. And really you need to be focused first and foremost on who you’re serving and the results you’re producing. Only after that, do you worry about the tactics? If you are a tactics first agency, whether that’s digital or AI or social media or whatever, that’s where you start to run into problems because if those things fall out of favor, or if they’re not as effective, or if I mean, so many different things can happen and then you lose your direction.

If you’re, if you understand who you’re trying to help and what you’re trying to help them do, then you can figure out which levers to pull and you can evolve more intelligently. And you’re not having to reinvent yourself every two years. Because if you were a cannabis agency five years ago, and then you became a crypto agency, and now you’re becoming an AI agency, you know, you’re not able to build any staying power.

Right . But if you’re riding these waves, that’s where you end up being. And, and we’re seeing that a lot with people who are fixating on AI today. And, and you know, we’ve already had an episode about that, but I just, I want to continue to beat that drum. Stop focusing on AI to the exclusion of other things.

AI is important. It plays a role in everything that we do. It is not something that you should reinvent your life around at this point in time.

Gini Dietrich: No. And I think to, to the point that you started with, which is this Wall Street Journal article, is the digital agency dead? That’s the whole, the whole thing, right?

Like, so eventually the big business publications, the big consumer national publications are going to start saying, this is no longer a thing. So now when a client is looking for an agency, they’re not going to be looking for a digital agency anymore. They’re going to be looking for an agency that provides the PESO model, full service.

Whatever it happens to be, that’s what they’re looking for, because that’s, that’s the kind of stuff that has staying power. It’s the kind of stuff that shows that the agency and the people that work there have expertise in something, and can build a program or a campaign for an organization that has lasting power.

And certainly, yes, let’s add in AI. We’ve done that, right? Let’s add in content marketing. Let’s add in social media. Whatever it happens to be, add that in for sure. But don’t lead with that. Lead with what you’re really good at doing, because that’s what’s going to have the staying power.

Chip Griffin: Right? And even with digital, I mean, look at the end of the day, nobody hires a digital agency purely for the digital. They, they hire the digital agency for something else.

And the problem is that so many people, I mean, if I asked 20 people. What a digital agency is. I’ll probably get 20 different answers. Yeah. You’re probably right. Because for some people it’s a web dev shop. For some people, it’s an infrastructure shop. For some people it is social media. For some people it is, Google ads and things like that.

It’s, SEO. There are so many different things that it means to different people that it has lost its value from that perspective. And whatever little bit of extra shine you got from calling yourself a digital agency five or 10 years ago, that is gone. I think that’s the point of the journal article.

And so you need to be thinking about digital for what purpose. Is it, is it for PR? Is it for marketing? Is it for sales? Is it for advertising? And I think if you start thinking more in those terms, you’ll be able to position yourself more effectively with the right kind of clients for you.

Gini Dietrich: Yeah, absolutely.

And it’s really about, I mean, to your point, who, who are you trying to serve and what are you an expert in doing? And when you can combine those two things, you can add in this other stuff. Right. And, and clients are going to see you as the expert, which is, I mean, people say to me all the time, well, of course you’re seen as the expert because you created the PESO model or you wrote a book or whatever, whatever the excuse is.

Yes, you’re right. And I’ve been doing the same thing for 15 years. That’s why clients see us as experts because we’ve been doing the same thing in my agency for 15 years. We’ve added in content. We’ve added in social. We even have added in Google ads and social media ads. We’ve added in native, native advertising, like influencer marketing.

We’ve done this over the years, but we’ve always focused on doing communication. That’s what we do. And so when a client calls us, or a prospect calls us, they know they’re calling us because they need communications help. And whatever that definition is for them is what it is, is how I will go through the new business meeting with them to figure out what that is, but they know that that’s what they’re calling us for.

They’re not calling us for content help. They’re not calling us because they need social media help. They’re not calling us because they’re trying to figure out artificial intelligence. They’re calling us because they need help communicating. That’s why they call.

Chip Griffin: Well, and frankly, nobody is an expert because of the tagline for their agency.

Calling yourself a digital agency does not an expert make you.

Gini Dietrich: Make you an expert.

Chip Griffin: You are an expert because of the thought leadership you’re doing and what you’re putting out. You’re an expert because of what you share in those meetings with prospects. You’re an expert because of the questions you ask in those meetings with prospects.

That’s how you show your expertise. It’s not by saying, we’re the best digital agency in North America or anything like that. I mean, it just. So what, right? I mean, I, I think back to, what is it? The, the, the movie Elf that we rewatched over the holidays.

Gini Dietrich: Such a good movie.

Chip Griffin: And, and in there there’s, there’s a diner that has the sign, you know, best coffee or something like that.

Gini Dietrich: World’s best coffee.

Chip Griffin: And so they go in there and they say it’s a nasty coffee because anybody can say they have the world’s best coffee. There is no actual title for the world’s best coffee. There just isn’t. And if there was, they’d probably charge you to get that right. You know, it’s just like all awards is pay for play I’m sure. It’s the same thing. Calling yourself a digital agency doesn’t make you the expert. It doesn’t mean that you can provide the solution, but yes, with clients, it has made a difference, frankly, in, in agencies getting acquired. It has made a difference because even people who should know better, i.e., the owner of larger agencies that don’t have digital, they look at someone who calls themselves a digital agency and they apply in their mind, a price premium to buying it.

That was dumb. They’re now waking up to it. This Wall Street Journal helps contribute or Wall Street Journal article contributes to helping the understanding of how silly it always has been and it’s only going to get worse going from here. So stop doing it. Come up with a real clear message for what you do, who you serve and stop trying to ride some wave of attention whether it’s a wave that’s lasted for 15 or 20 years or one that like Clubhouse lasted about 15 or 20 minutes.

Gini Dietrich: I was going to say seconds, but minutes is probably more accurate.

Chip Griffin: I mean, the success of Clubhouse lasted less long than one of one of the Clubhouse sessions I sat in. Yes. Awful. Yes. Absolutely awful. Yeah. Don’t understand it. But congratulations to all the agencies who went out and hired Clubhouse experts. Oh man. I loved it. That was great. You know, like two days after Clubhouse comes out, we’re, we’re, we’re opening a Clubhouse practice in our agency.

Why?

Gini Dietrich: I’m telling you, it’s because people are like scared they’re going to be left behind and you’re not going to be left behind. You may see people out there that seemingly have some success from it, but I guarantee you. Pay attention right now to who’s all in on artificial intelligence, whether or not they believe you believe that they can do it.

Two years from now. I want you to write this down right now, write down a name or an agency name or a business name. And two years from now, I want you to go back to it and see if they still exist because I guarantee 90 percent of them, 95 percent of them will not. Will, not.

Chip Griffin: Well, I mean, you know, this goes back to, to my days in, in tech and doing angel investing and that kind of stuff, the whole idea of first mover advantage is so far overblown, right?

If you look at some of the most successful businesses out there, they were not the first movers. If you look at Microsoft, MS DOS was basically a rework of a previous product that someone else had put out. If you look at Apple, almost every single product that Apple has put out has been a perfection of something that was already being done.

You know, you look at the Mac and everybody’s like, Oh my God, you know, they came out with the Mac. Yeah, they came out with the Mac, which was a copy of something that had already been done in an enterprise level before they just made it consumer accessible, right? Yes. Very different than being a true first mover.

So being a first mover. It might be nice for a few days, for a few weeks, for even a few years, but ultimately you need to build something sustainable. And, and part of the reason why so many agency owners come to you and me stressed out is because they haven’t built something sustainable. They, they rode some kind of wave, whether it was a trend wave.

Or a wave of a business that they took in carrying over from a previous business or something, and they just never figure out how to make it consistent and sustainable. And that’s what I would encourage everybody to do rather than worrying about what tagline they’re applying to their agency or what category agency they are.

Gini Dietrich: Yes. You said this earlier, who do you serve and what are you an expert in? If you do those two things, it won’t matter what wave we’re in because you can apply those waves to your business every single time. But maintain the vision of who you are and what you stand for and who you serve and what they stand for, and you will be able to survive every single one of these evolutions.

Chip Griffin: Yep. Because clients want results. That’s all they want.

Gini Dietrich: That’s right. That’s all, that’s all they want.

Chip Griffin: Right? Yes. They’re they’re, they’re not, they’re not buying a fancy logo from you or a name. Right. They, they want some kind of result. And if you can figure out what those results are and deliver them, you’re golden.

Gini Dietrich: Yeah. I actually right before the holidays, had a meeting with a client to go through our plan for, for this year and we went through all of the results and because we have the data to back up everything that we do, I was able to say. We now know that after a year of working with you, that if we do X, we’ll be able to deliver Y and at the end of the meeting, the client said, you guys are so expensive, but I know that I’m going to get the results.

So let’s do it. And it’s because we spent an entire year, one full year collecting data and making educated decisions based on that. So he doesn’t care. Like he knows that he’s going to pay us more money. Because we asked for significantly more, but because he’s going to do that, we’re going to be able to do X in results.

And he knows that. And I’m confident in saying that because we have the result, the data to prove it. So that’s where you have to get. And then you can add in, like, we’ve tested all sorts of things we’ve tested. We actually started, the client wanted to do a podcast, a live podcast and do it on Twitter.

That lasted about 20 seconds, right? Because that was right about the same time that Elon Musk took over and everything went to, to hell. So we very quickly pivoted. But the point is, is that you’re able to pivot and evolve and change if you know what the vision is and what you’re trying to achieve by demonstrating results. You can add in every single tactic that you want to try in that, in that area.

Chip Griffin: I think that is a great note to end on if for no other reason than the power just flickered here. So.

Gini Dietrich: I just saw it. I was like, oh.

Chip Griffin: I think the snow outside may be getting too heavy for the power lines. And so we may not be able to continue this recording if we don’t stop soon. So with that, that will draw to an end this episode of the Agency Leadership Podcast.

I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich.

Chip Griffin: And it depends.