Closing the digital intelligence gap
Brand/creative agencies continue to add to and improve their digital capabilities in an effort to integrate those capabilities with the services that they already provide. This is no longer something agencies simply want to do but something they need to do in order to keep competitive in today's communications industry. It has reached the point where the majority of any client's media mix is in some way digitally oriented. It's time for agencies to realize that digital is no longer a set of specialty capabilities; rather, it is something that permeates an agency's ether as a part of their employees' discipline and skills.
Ultimately, the goal is to achieve balance across their digital and brand/creative expertise, allowing them to perform competently within an integrated marketing communication model. So, agencies need to constantly ask themselves just how digitally savvy their staff is.
For instance, consider a typical agency's account staff—can they articulate brand and digital strategy in the same breath? Are they digitally savvy enough to compose and present an integrated media plan to clients? Internally, can they hold their own when discussing digital strategy with agency creative and user experience personnel? These are the kind of assessments and questions agency leadership should be asking of their talent mix. Net-net, agencies need to get a better grip on what impact the lack of digital skills has on their financial bottom line.
Agency leadership can start by assessing the variances in their employees' digital skill levels when executing projects. It should be apparent who is digitally qualified and who lacks the degree of digital knowledge required to fully execute their agency roles. When digital knowledge is imbalanced, agencies tend to overwork their digitally qualified employees by having them fill the void created by those who lack digital skills. Furthermore, while the digitally qualified employees are stretched thin compensating for others, they are still expected to perform their own duties with 100% efficiency.
Realistically, these overworked individuals will either exhaust themselves to a point of severe dissatisfaction (possibly resigning from their roles), or they will distribute their efforts. As an example, instead of operating at 100% efficiency in the roles for which they were hired, they may operate at 70%, with the remaining 30% applied to responsibilities that should not be theirs. Meanwhile, the digitally inexperienced employees continue operating at lower efficiency.
The sum of these role variances and the associated lack of qualified digital skills is a circumstance that I theorize as the Digital Intelligence Gap (DIG). It's the void caused by the aggregate lack of employees' digital contributions—a gap that must be filled with other resources. Why is DIG an important concept? The answer is simple: Failing to recognize the DIG within an agency can negatively impact that agency's bottom line. If the DIG goes unacknowledged and unaddressed, the consequences can include a drain in agency profits. An unaddressed DIG can also lead to compromised relationships with clients that are likely to further compound an agency's financial outlook in lost revenue opportunities.
Quantification of the DIG effects comes down to the actual efficiency of each employee (in terms of their digital contributions), as compared to what is required of them in their agency roles. Of course, this is not an exact science, but we can conceptualize this assessment as a percentage. Logic will reveal that the further an employee is from 100% efficiency (i.e., the bigger the DIG), then the more effort it takes from others to make his or her role “digitally whole.”
Imagine an employee whose digital skill level is only at 50% of what is required in their role. I have already illustrated the draining effect that this can have on digitally qualified individuals within the agency. However, if internal digital knowledge is notably deficient, external resources may also be utilized, including outside freelancers, contractors, or partnerships with other firms who can provide services that the agency lacks. In possibly the most disturbing scenario, the agency will hire (or reassign) another individual who also possesses 50% of the requisite digital expertise, thereby employing two individuals to fulfill a role that could easily be performed by just one digitally qualified employee. The concrete impact on an agency's profit margin is fairly obvious here, but it is also worth noting the “softer” impact that DIG can have on things like internal workflow process, as well as other critical areas like company culture and employee morale.
It is important to note that the gap applies on the other side of the equation as well: an agency can be too digital in its expertise and almost completely lacking in brand experience. In this scenario, the negative consequences are conceptually similar to those experienced with a digital intelligence gap, but the specific issues and solutions are slightly different. Specifically, these digital agencies lack the brand and category knowledge required to create successful communication strategies and content in certain industry verticals (e.g., healthcare, financial services, etc.).
In today's expanded digital realm of online channels, understanding the customer is more critically important than ever before; it is essential to know their behaviors and attitudes in relation to a brand and its category. As customers acquire greater knowledge of their needs, so too should the marketer. Hence, digital agencies need to expand their talent base with brand and category expertise in any given set of business verticals.
Why is this important? As brand/creative agencies add more digitally focused services, they move toward an integrated agency model that makes them more relevant to their vertical target client base, and which exposes the digital agencies as deficient in expertise.
All agencies have some degree of DIG. Closing the digital intelligence gap starts with agencies being introspective and honest with themselves. It means taking a close look at the breadth of their DIG and asking realistically what they can do to narrow it.
I am not suggesting that any of this is easy. Getting to an integrated marketing-communication model is a difficult task, especially when the industry is lacking a precedent. What I am saying, however, is that the DIG cannot go unaddressed. Because the solution is not something you probably find in textbooks, I believe that agencies must navigate the issue independently. They must be aware of their DIG and mindful of how to improve it in order to stay financially healthy and competitive in our rapidly changing industry.
Geoff Melick is EVP, chief creative and innovation officer, GA Communication Group.