In 1970s & 1980s, Kolkata was the prime location for all big corporate/advertising agency headquarters. It boasted of being a great pool of talent and creativity.
Gradually, the big clients shifted to Mumbai, and that made big marketing/advertising agencies shift their headquarters to Mumbai. Subsequently, the talent too shifted to Mumbai. Now over a period of time, all big advertising agencies in Kolkata have either closed shop or shifted, making Kolkata lose its charm and leaving it bereft of brilliant minds.
Now in the 20th century, I see all OEM, trading & manufacturing units’ headquarters moving towards Delhi. Only the top Finance/ NDFC/Brands have their headquarters in Mumbai. I can see that in the near future, Mumbai will be like Kolkata, a talent-deficit market. Delhi, similarly, will initially be full of opportunities, due to the sudden increase in demand. It will be quite some time before the talented people shift base too.
India needs a million of digitally skilled resources, and sadly, these are not being developed. Soon it’s going to be a challenge – delivering solutions to the business problems.
The Rise of Digital Agencies
From what we can see now, two decades later, it will be a different India. The digital marketing scenario of Indian business is characterized by the mushrooming of digital agencies in every nook and corner of the country.
Why this sudden rise of Digital Agencies
Digital Transformation became a buzzword and everyone (client) wanted to be a part of this buzz. The buzz meant a demand for digital marketing services and that meant the digital agencies had to somehow haphazardly come into being. The “Make in India” initiative by the Prime Minister of India on September 2014 also acted as a catalyst in digitizing Indian businesses.
So yes, businesses wanted to become digital but there were no digital resources, knowledge, expertise and capabilities to help business transition well. Not just that! After the ill-equipped digital agencies, it’s now the turn of online courses teaching digital marketing.
I was personally involved making such structured courses for some very big online brands in India. As I write this blog, I too am getting ready to launch an advanced digital transformation course for senior level executives.
The Market of 2018
Across the Business Consulting landscape, we have observed that in metro cities like Bangalore, Delhi and Mumbai, agencies can be classified into 4 broad categories (not taking the Big 4 into considerations in this blog):
- BTL Outfits
Agencies which can reach 60% of rural Indian customers in media-dark villages/regions
- Pure Creative Outfits
Agencies showcasing the old creative awards/success and still doing good work, but facing the heat of digital delivery
- Semi-digital Outfits
Mid-sized creative agencies that are struggling thanks to the fact that they have limited/poor digital knowledge
- Lead-generation Focused Digital Outfits
Performance agencies that mainly focus on lead-generation, but run it by using the old traditional mindset or simply using AdWords & SEO.
These agencies do not focus on developing the clients’ brand organically. They do not use the inbound methodology.
The First Three: BTL Agencies, Pure Creative Agencies & Semi-digital Agencies
Agencies are struggling to marry digital with the non-digital approach. They’ve been struggling because there is a constant pressure from the client to enter/expand quickly into digital. Also, the new age customers’ (end-consumers) behavior has changed. Even in the villages, farmers are using smartphones, using telecommunication calls widely, browsing on Facebook and watching videos on YouTube. Since these agencies cannot lose this type of digital business, they are trying fast to adapt and embrace the new-age digital.
Meanwhile, some Semi-digital agencies are finding it difficult to balance non-digital, unskilled people with the aspirations of their clients, thereby compromising on the quality of work. Coping with ever-changing digital ecosystem is quite a task. The algorithm changes every 6–7 months.
The Fourth Type of Outfits
Finally, the fourth category of typical digital agencies is surviving on a combination of services like Search Engine Optimization, GoogleAdWords, website and app development and running social media campaigns.
My point is that the root-causes that are common to all the problems across all these 4 segments include:
- Lack of digital skills
- Lack of Digital Knowledge
- Digital ignorance
- The urge to make money first
- Doing injustice to digital growth & development of employees
This makes the digital outfits incompetent when it comes to leveraging the benefits of different fields of digital marketing such as:
- Data Analytics
- Design (UX and UI)
- Information Architecture Development, based on insights from personas
- Campaign Management, without an in-depth understanding
- Understanding of Content Funnel (ToFu, MoFu, BoFu), by mapping the Customers’ Journey
Recently, some agency businesses have laid off approximately 100 to 300 of their employees in cities like Mumbai and Delhi. While a number of smaller agencies are evolving with teams as small as two or three people, some offshoots from larger agencies are also coming up to open their own shops every day.
This highly chaotic environment is a result of highly confused agencies not being able to integrate all the digital platforms to sync into one digital objective. They don’t know how to join all the dots and make one complete digital roadmap.
Another set of people, who are unable to cope with this changing environment of business are the brand heads and digital heads (barely 35 to 40 years old) who come from a traditional background. They face the issue of not understanding digital and do not know what to ask of agencies in terms of deliverables or how to evaluate the digital work & process. They are also highly incapable of differentiating between a semi-agency and a normal traditional agency, merely pretending to be digital.
Some of the insights that I have gained by being a jury member for so many award ceremonies are:
- 80% of the nominations are copied from Western countries
- Great innovations are not happening on digital simply because people do not understand digital
Where The Digital Fellow stands
There are 2 groups that are prominent in running the digital business: Consulting Firms and Digital Agencies. A consulting firm is very business driven whereas a digital agency is creative-driven. The need of the hour is to create an ecosystem in which both the entities can work in sync with each other.
We, at The Digital Fellow, anticipated this way before and never went into agency format. We chose to adopt the consulting format. This made us different. I was very sure that I wanted to build my business of consulting, and not a creative-based execution agency.
The reason behind this Infographics
I came across this blog (How consultancies and publishers are disrupting the agency model in Asia Pacific) which says the same thing in the context of the western world. Refer to the blog link mentioned below to read more.
We have also made it into an infographic for handy reference. This can also be used by people in universities, business schools as well as marketers to help understand the business scenario in the next 5 years.
A word of caution: This infographic is not intended to be used as a substitute to understanding Digital Agency Vs. Consulting Landscape all over the world or in India. The reader should read the original blog for full understanding. Additionally, the infographic is not meant to supplement or replace the original blog. We have just made it easy to understand the flow and provide an easier visual understanding of the complex landscape. So do not cut, copy and paste. Do give it due credit while sharing.
You should also check of 2nd part of this blogs: The Business Consulting Vs Agency Business ( Cont. — Part 2)
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