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Toward a New Global
Digital Agency Structure
While digital efforts are increasingly integrated into the core duties of global marketers, Razorfish has found marketing executives continuing to express a high degree of frustration with the number of partners and complexity associated with managing digital programs globally. Razorfish has identified the disadvantages of traditional models, driving factors that put those models under intense pressure and potential solutions to the problems, including the centers of excellence model.
Matching luggage might be a good travel strategy, but it comes up short as an organizational principle for a global ad campaign. That desire to have all the creative around the world look like its part of a set created in the same factory, by the same designer, is an old one. And yet, it lingers as digital efforts are increasingly integrated into the core duties of global marketers. The effect, weve found, is that marketing executives are frustrated with the number of partners needed to manage global, digital programs and the complexity it breeds. Old structures created to localize traditional media like print and out-of-home often create mediocre digital creative, inefficiency and quality control problems.
Clearly, a new model is needed. It has to be lean, yet with a big enough footprint to ensure global brand consistency. And it needs to be efficiently organized so it can deal with one of the biggest challenges facing digital advertising global scarcity of talent. We believe that the centers of excellence model thats popping up more and more is a viable replacement for the bloated structures of yesterday, but before we get to that lets examine the shortcomings of current models.
There are three traditional models, each with major disadvantages:
1. Global control with local transcreation/localization
While this helps ensure brand and message consistency, it largely ignores the often vastly different ways consumers engage via digital channels in local markets both in terms of content and context. As a result, digital campaigns become less impactful as they are rolled-out across geographies. For example, not only will social media have a larger portion inside the marketing mix in China, Western markets are not familiar with local social media properties. A campaign cooked up in the U.S. or Europe and then localized for China might not account for this.
2. Full local leadership
This clearly makes marketing programs more relevant in local markets, but runs the risk of losing out on building a consistent global brand experience, and it often leads to a high degree of inefficiency due to duplicated efforts and investments. In addition, the availability of digital talent varies between markets. It is not uncommon, for example, for Russian brands to request global, digital executives to be assigned to local markets, or for marketers in India to request an equivalent standard of digital creativity and quality as they see in the U.S. or Europe.
When implemented well, the hybrid approach allows local flexibility to react to local market needs, while maintaining brand consistency and countering some of the redundancy that comes with the purely local approach. However, the shortage of experienced digital talent beyond the realm of production is a real challenge for this model in many markets. As a result, locally driven digital campaigns tend to be fairly tactical in nature particularly in emerging markets and miss the impact they could have by fully leveraging global digital expertise to amplify the campaign.
These models are under intense pressure. First, theres a shortage of talent and diversity in local markets. Even in the most mature markets where agencies not only compete against each other, but with clients, media owners, start-ups, technology firms, etc., the pool is dry. The challenge in emerging markets is even more severe. In addition, the types of talents and skills that are available in different markets can vary significantly. It doesnt help that a broad spectrum of digital expertise is needed. The fragmentation within the sector is enormous and, combined with the speed of change in media, technology and consumer behavior, is confronting marketers with a high degree of complexity.
Another challenge is finding the balance between commodity services and true differentiating offer. Given digitals relative youth, marketers often struggle to draw the line between technology/creative production and innovation. Finally, there are vast differences by markets. The digital media diet, digital media properties, technology adoption and content preferences frequently vary by country and need to be factored into campaign planning and execution.
In response to the shortcoming of the traditional structures and the challenges in designing and deploying impactful digital programs, we see a new model emerging; a structure around centers of excellence such as emerging experiences, social media, media creativity, analytics, etc. often in support of the hybrid model. In other words, a center of excellence as a unit based on a clearly defined vision and goal, such as becoming a market leader in cloud computing worldwide. There is no fixed formula for how to set up such an entity and its size and organizational structure will depend on the subject, the local/regional market needs and its geographic scope.
Step one is to analyze existing talent in key markets so that theres a basis to extend and build from, and so that theres a well-respected leader to attract talent. Assess the availability and diversity of talent in the respective local markets before deciding on a hub location. Once the hub is established, a concerted effort is needed to bundle activities there so as not to undermine the efforts of building a scale in certain areas. China is a good example. While its a well-known fact that China lacks local, digital talent in general, thanks to its fast growth and abundant opportunities, it has become a talent magnet for the region. More and more talent from markets like Hong Kong, Taiwan and Singapore are flowing into China and making up an ever-increasing portion of the workforce. In fact, the most successful marketers and agencies in China today are those who can construct effective teams that consist of talent from different markets in the region.
This approach allows agencies to attract specialized talent at scale into core locations around the globe. These regional centers in turn partner closely with local market teams to design and build breakthrough campaigns. It goes without saying that local offices still need to employ key digital talent locally but it alleviates (to some extent), the massive shortcomings in skilled digital marketers and increases the ability to manage complexity.
The new digital model also builds on the learning that designing and implementing global campaigns no longer mandates physical presence in every single market; this is particularly true for tier-two marketers. When Tourism New Zealand set out to launch its digitally driven global marketing campaign, it initially engaged multiple Razorfish offices to plan and execute the campaigns in parallel. While they had great results in some markets, others were more challenging. Throughout the process, several offices emerged with strong and complimentary skills. We both realized a hub-n-spoke model with distinct centers of excellence probably made more sense. Working together, we established hubs in Seattle, London and Shanghai to manage their global campaign. Success no longer depends on the number of people per market; having physical presence does not equal local, digital skills. We have already seen improvements on multiple fronts like communication efficiency and integrated campaign planning.
So next time when choosing a global digital agency partner, remember to ask the following questions:
- Where are your centers of excellence globally?
- Why did you select those locations?
- What talent and skills do you have in key local markets and how do the centers partner with local offices?
- How have you have delivered digital innovation with positive impact to the bottom line for clients?
- What are examples of digital campaigns you executed with significant impact on brand level metrics?
Regardless of what new approach wins, the increased spend in digital, combined with ongoing shifts in the technology, consumer, and media landscapes will likely lead to more pressure on traditional models in the foreseeable future. The jury is still out on the center of excellence model, but there is increasing evidence that its an efficient way to manage the complexities of a global campaign.