How digitally evolved is your agency? It might matter more than you think

Not everyone was fully embracing digital transformation, however. Fewer than one in five (19%) agencies had fully mature digital management systems, although encouragingly, 37% said they had digital transformation plans under way.

However, 42% were either only in the early stages of developing a digital strategy, or had no initiatives in place. Why does this matter, you might ask? Rolling out new digital systems may feel like less of a priority in the pandemic than, say, employee wellbeing initiatives or incentive schemes.

But when we did a deep dive into the data, we found that agencies with mature or well-advanced plans for digital transformation were actually doing better on a number of fronts than those without. You’ll find more detail on this in our full report, but read on below for some key takeaways.

How digitally evolved agencies are outpacing their rivals

There are several areas in which digitally mature agencies were outperforming the rest. But let’s look at those two areas agencies told us were their key business focuses for 2021: new business and profit.Most (59%) of the most digitally mature agencies had grown their client base year-on-year, compared to an average of 44% ­– and only 35% of those with immature or non-existent digital strategies.

Only one in ten (10%) of mature agencies had shed clients over the year – half as many as the digitally unevolved did (21%).

Meanwhile a third (34%) of digitally mature agencies had managed to increase profit margins year-on-year, compared to just 16% of those with zero digital strategy. 

What’s stopping agencies evolving digitally?

Our research pinpointed several practical and institutional barriers to digital transformation, including lack of capital, prioritisation of investments and specialist skills gaps. With so many other competing challenges for agency leaders’ attention and funds right now, putting the systems and people in place to facilitate digital change hasn’t quite made it to the top of agency leaders’ to-do lists.

Of course, this is a problem that extends far beyond any one sector or industry. Analysts like PwC and McKinsey regularly warn of a widening digital skills gap that has only been accelerated by the upheaval of Covid-19.

So while many agencies may see old-fashioned client acquisition as their top business priority right now, they could also benefit from being more strategic and inward-looking in their approach. Clearly, evolving their own systems could help deliver some of the profitability and efficiency they’re seeking. So acquiring the right talent to bring about that evolution should be a higher priority than ever – but there’s likely to be plenty of competition for that talent. Those agencies that don’t already have an in-house specialist to lead their digital transformation journey may want to consider a SaaS solution with industry expert consulting services or a pre-defined best practice configuration to accelerate their time to value and get up and running faster.

For more insights and the full results from the survey, read our report Reflect, Recharge, Move On: Creative Agencies in 2021, carried out in partnership with Campaign Insight.