Marketing agencies face a challenging environment heading into 2020. There’s the slowing economy. There’s also an increased disruption brought on by machine learning, artificial intelligence (AI) and marketing automation. Because of this, agency CEOs will be under great pressure. Here are a few challenges they may see and their possible solutions:

Continued digital disintermediation is happening.

Not so long ago, agencies were content to receive a 15% commission on all media placed on behalf of customers. This approach may seem like a relic of the past for many. However, it’s still prevalent within digital marketing companies. Today, it’s still common for SEM agencies to charge their customers a percentage of paid search spend. The same goes for social media advertising agencies as well.

Big social and search media platforms are becoming more desperate to pad their revenue and profit margin growth numbers. Therefore, they are increasingly becoming agencies themselves. They may use improved tools that make advertising on their platforms even easier. For example, LinkedIn recently revamped its advertiser center to include more targeting capabilities.

The more these giants try to make it easier for advertisers to go direct, the harder it will be for marketing agencies to justify their fees.

The extinction of the account executive and account coordinator is real and accelerating.

Most agencies have a standard staff structure. The account executive manages the day-to-day relationships with the clients. This includes project and task management. On the other hand, the account supervisor manages clients at the executive level and provides marketing strategy. The account coordinator handles the marketing campaign.

If the agency is big enough, they may have one or more engineers. These people will be responsible for providing basic technical support for the implementation, management and analysis of the campaigns.

Marketing automation, AI and machine learning are progressing faster. Thus, most marketing agency CEOs will find that their staff structure is not aligned. Their engineers may not have the technical depth required to execute and manage.

Account executives and, especially, account coordinators are becoming increasingly redundant as marketing automation systems are taking control of their tasks.

Here’s an example: Without a content marketing platform like Tempesta Media, a typical account coordinator could conceive, write, edit and publish a couple of articles per week. With Tempesta Media, they can now get dozens of articles out the door weekly. This is a 10x+ improvement on return-on-time.

The disruption is not limited to content marketing.

Marketing technology automation is not limited to niche areas like content marketing. In fact, it is pervasive across all marketing channels.

Agencies can quickly perform sequential, multi-variate creative tests on their landing pages. They can use solutions like Unbounce, LeadPages and others. This cuts down setup and configuration time between tests. Additionally, the technology lets marketers optimize pages in real-time. As a result, conversion rates incrementally improve in a fraction of the time.

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Micro-influencer marketing is ripe for automation.

Influencer marketing is another example where automation is replacing the human. Without influencer automation technology, marketers have to identify, target, negotiate, traffic, measure and pay manually.

Because getting these campaigns has been so challenging and manual in nature, influencer campaigns have been limited largely to celebrity influencers.

However, with new influencer marketing technology, like Tempesta Media’s Simple Social Share™, marketers can implement influencer campaigns in minutes. This can save agencies thousands of dollars in campaign labor costs.

How do CEOs of marketing agencies need to adapt?

More means less. CEOs need to invest more in the skills and talents of their technology personnel and scale back on account coordinators and account executives. They need to do the unthinkable: Make investments in technology tools and systems.

In 2019, doing this was a perk. In 2020, it will be necessary. If marketing agencies don’t make these painful and profound changes,they are likely to:

  • Lose customers to better-performing peers.
  • Erode their margins.
  • Lose key staff.
  • Be forced to take on lower quality customers.

These are the rudiments of what efficient agencies are dropping.

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