A shift in market structures
What is driving this change
This significant market change is not just a result of a whim, or being driven by a lack of quality or service from the current market. It is being driven by the changing nature of advertising from traditional media to an increasingly digital world. Digital spend as a proportion of the advertising budget is increasing all the time, and this trend is set to continue. This movement is fuelled by the reduced effectiveness of traditional advertising methods, and the opportunity that digital presents to overcome barriers and connect directly with the consumer. It is well established that the interruption marketing model is dead or dying , it is the time of relationship marketing and brand engagement - these are now the remit of digital. 47% of UK households are using broadband, so the consumer is not just in front of the TV. They are on YouTube, on Facebook, on Myspace, they are on blogs and forums, they are watching TV but using PDV to skip adverts and edit their own TV schedule. This media fragmentation means the consumer is not going to sit and absorb your message, you need to place your brand where they are, and in a way that they are able (and want to) engage with it. These social media require fleet of foot in terms of content production, which again demands different and direct relationships between brands and production. The rise of e-commerce is also driving companies on-line in order to do battle on the digital high street, where the small companies can compete alongside the global retailers. There is also the rise of the mobile as an information portal. This is a small element of the marketing package now, but has the potential to increase significantly in importance. Digital is growing strongly and this growth does not look like it will come to an end in the near future.
Companies have traditionally relied upon their creative agency to take care of the production of digital marketing assets These agencies manage the process, often outsource the actual production, whilst ensuring the quality of the work. A significant factor in this is that these agencies mark up the production costs with their own (often high) overheads. In some instances, smaller companies have decided to mange their own digital production, often with very poor results. Using small boutiques they have struggled to manage quality and have only had limited access to different technologies, often getting only the core skill of the particular company as opposed to the technology that can deliver the best results for a particular situation. Many companies understand that they need to take control of digital production but have not yet had the resources available to manage the process.
The pressure is mounting on organisations to overcome difficulties with control of digital production as they strive to control budgets and get the maximum return from the resources that are being pulled in more and more directions. Decoupling the creative from the production is already happening on a large scale. It is a trend that was established in other key areas in the past, as although the creative agencies are good at managing quality and production standards, their business model does not encourage them to control budgets with the same enthusiasm. Rebate models from subcontractors and in-house production combine to inflate costs, and for these reasons decoupling became well established in print and advertising and is a trend that has taken hold in TV production. Now, the same factors are starting to emerge in Digital. However, it is important to understand that cost is not the only criteria - quality is an important factor and any move to purchasing direct needs careful management. This guide goes some way to ensuring companies have access to the information and expertise they need if they are going to decouple their digital production successfully.