By Bob Tesar
My firm, Tesar-Reynes, is a Chicago-based executive search firm specializing in the world of Integrated Marketing Communications (IMC). We are basically matchmakers. While we usually find specific people for specific firms, we also use these same skills further up the food chain, like helping an agency acquire another agency.
In late 2010 we were retained by a 200-person agency to look in the Midwest for an independent digital agency as a possible acquisition target. We met with a number of the presidents of these relatively new service organizations. We also met with several larger, older and more established digital agencies for their prospective. In all, we spoke to about 50 companies. Below are some observations from our work.
A Large Variance in Attitude
Larger Digital Agencies: This group was surprisingly conservative and even somewhat arrogant. They tended to work for larger Fortune-500 firms. They viewed themselves as strategic consultants who lead their clients, whom they saw as largely clueless, on how to use digital in the integrated communications mix. They viewed smaller digital shops as narrow, understaffed, and mostly executional, though they will sometimes admit that they are not as competitive, cost-wise, as those smaller agencies. They are also concerned about their turnover of personnel, many of whom leave for smaller shops or start their own.
Small to Mid-sized Digital Agencies: These firms tend not to be the agency of record for large clients. They usually seek project work to get their feet in the door with a big client. They often do “white label” work, in which they act as an unnamed resource for larger agencies. They normally have no real strategic thinking in house, and they know it. They hold the large agencies in disdain because they are slow moving, risk adverse, and expensive. These smaller firms sell themselves as cutting edge, agile, and willing to take risks — and at a far lower price.
A Broad Spectrum of Expertise
We found there to be at least 15 different flavors of digital agencies. I will not detail all of them here, but several are highlighted below. Typically, the owners of these agencies had a special expertise or passion when they started their shop, and it tends to remain that way today.
1. The Generalist – This group is strong on strategics, and understands integration / IMC. They strive to oversee the entire process and may or may not outsource their work to freelancers or other digital shops who then “white label” their work.
2. The Front-End Shop – These are design / graphics-driven agencies, mostly concerned about the creative look and feel that will be carried through the entire project.
3. The Website Factory – They make all type of websites, and refresh old sites.
4. The UX Specialist – This group is concerned with making the user’s time on-site easier and more fulfilling. They take the complex and make it easier to do.
5. The B-to-B Shop – They are focused on getting better leads for their client’s sales force.
6. The Mobile Agency – This group is all about the technology of bringing filtered data to the user on the go using mobile devices.
7. The Creative Boutique – Their specialty is bringing cutting-edge creative talent to the Web.
8. The Social Media Specialist – They know word of mouth (WOM) and buzz better than anyone else and are closely aligned to what a public relations agency does.
9. The Online Marketing Shop – They bring people to a client site and have an advanced understanding of ROI and sales conversions.
10. The PPC (Pay-Per-Click) Specialist – They will monetize your site by pay-per-click, and will pay sites to refer traffic to you.
11. The SEO & SEM Specialist – This group works to find a way to get the client an impactful place on Google, Youtube, Facebook, or whatever search engine is relevant to the industry.
12. The Retail / Commerce Operation – They make the click-and-brick side of a company seamless; they negotiate with search engines to make the company visible, and with banks to streamline finances aggregators to get new distribution.
While this study was done in the Midwest some time ago, I think the comments would be just as apt today, anywhere in the United States.
Bob Tesar is co-founder of Tesar-Reynes, one of the largest integrated marketing and communications (IMC) search firm in the United States since 1982.
Originally published: Feb 27, 2012