The vast majority of specialist social media agencies, founded during the heady days of the early social boom, will not survive the next couple of years. Their business model remains reliant on selling basic, low margin monitoring and community management services that most clients can now handle in-house. A few years ago it was relatively easy to win small retainers for monitoring, delivering internal training and providing simple market intelligence. That easy money has now largely disappeared, but few agencies have been able to replace it with new, higher margin revenue streams.
The few agencies that survive will be the ones capable of delivering two critically important, added value services for clients:
- Sophisticated data analysis - fusing social, behavioural and commercial data – to help clients establish the commercial impact of their social media investments. At the moment far too many social media specialists are adept at generating screen-grabs (of pretty charts and largely incomprehensible data) rather than commercially-relevant insights.
- Business consulting expertise to help clients address the significant cultural and organisational challenges of putting social media at the heart of their organisations. Getting the technology right is relatively easy for most companies. Changing an organisation’s culture and aligning the behaviour of people from different parts of the business is much more difficult and is the reason why so many of them struggle. This doesn’t mean that social media agencies suddenly have to embrace the language and methods of a McKinsey, but it does require them to be able to understand organisational culture and talk the language of the boardroom rather than the digital department.
I think I already have a good sense of which social media agencies will be capable of meeting these challenges and adding these twin capabilities to their existing creative and technological strengths. Are you one of them?