Digital Agency vs Ad Agency

May 13, 2011
Digital Agency vs Ad Agency

The distinction between ad agencies and interactive agencies, or digital agencies, can be fuzzy and confusing. Part of the reason for this is that many traditional ad agencies refer to themselves as a digital agency even though many are struggling to get up to speed with digital design, marketing, and development concepts.

Distinguishing the capability differences between a traditional ad agency and a digital agency can be difficult. As with most experiences, it isn’t until you’ve had the experience that you have the insight to know the difference.

A Tale of Two Agencies

I have had the experience of working in both of these environments; specialized digital agency, and traditional advertising agency that was getting into digital design and development late in the game. On the surface it is easy to say that digital design is seen very differently between the two as a result of philosophical, technical, and financial approaches. But there is more to it.

Digital agencies have grown rapidly in recent years due in part by the explosion of social media. Important to note is that digitally-inclined firms were in a position to easily adapt and take advantage of increasing ad revenue generated by the Internet and more recently the social network, whereas traditional ad agencies were still attempting to understand the more basic, fundamental concepts of the digital landscape. It strikes me as ironic that this is the case since ad agencies should have an advantage, having long understood the value of online marketing and advertising over comparatively young digital agencies. The obstacle for them has primarily been a technical one.

Digital agencies grew out of the initial technical domain of the Internet, and therefore had the advantage in bringing technical solutions, and innovation, to the Internet quickly. Their rapid expansion into the advertising field was fueled by forward-thinking marketing professionals migrating to the digital realm.

The traditional agency model that focused on traditional media first, which has grown increasingly expensive, was faced with the viral growth of the Internet user base where marketing activity was relatively inexpensive by comparison. Using a hierarchical and linear approach to creativity and execution that consists of account service teams, senior creative directors, art directors, production artists, and traffic managers, contributes to a slow, lumbering workflow with no ability to innovate and adapt quickly to the changing digital world.

Digital agencies had the technical prowess to position themselves as the innovators of the Internet, while traditional ad agencies were dependent upon the established solutions created by these same companies.

For the record

I will go on record as saying that although I have worked in the traditional ad agency environment, my background and inclination has always been creative and technical, resulting in a bias towards the digital agency model. My first attempt to join a traditional ad agency was driven by an awareness of the need to sublimate these two forces in the market, both having unique advantages. I learned that my desire to have the best of both worlds required overcoming a new set of obstacles.

The first overwhelming, and ultimately insurmountable, obstacle was the lack of desire amongst staff to learn something new. The technical requirements and coordination needed to bridge the traditional creative process with interactive execution was a collision of cultures, and sometimes overwhelming for non-technical staff. Overcoming the habits of reacting to client’s needs as opposed to the thorough planning and execution required for digital solutions proved to be a challenge.

Time Equals Money

With a tentative buy-in from agency directors, the next step was to integrate the processes required to manage a medium to large online solution — such as a website or online application. With only token acknowledgement of the requirements, that process never became rooted in the agency’s process, resulting in extensive confusion and inefficiencies. Interactive projects were re-engineered long after development was done, creating many delays, cost overruns, and worst of all, unhappy clients.

What I took away from these experiences seems so obvious that I question my reasons for spending the many years that I did moving back and forth between the two worlds: time equals money.

A large slow-moving organization with high overhead and a low threshold for the technical cannot compete with a smaller, flexible, technically-inclined organization that already understands the value and power of the Internet and the social network. Costs are less due to smaller overhead, and time to delivery is faster due to the intrinsic technical expertise on which digital firms built their businesses.

Should you hire a traditional ad agency that has digital services, or should you hire a digital agency that has many of the services of a traditional agency?

Hopefully my experiences will help you decide.