A survey commissioned by Sapient has established that marketers are recognising the need to make greater use of digital marketing, and accordingly are looking to marketing agencies with proven expertise in digital marketing techniques. The study, conducted by Redshift Research between July and August 2008, measured current and future usage of digital marketing activities among 500 companies employing more than 1,000 employees across the UK, Germany, Switzerland, Sweden and the Netherlands.

1. Agency of the Future SUMMARY FINDINGS
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2. Agency of the Future SUMMARY FINDINGS
Introduction
The signs of the emerging digital consumer have been clear for some
time: increasing sourcing and purchasing of goods online, the decline of
newsprint (particularly for newspapers) and the parallel rise of internet
usage as entertainment, including video streaming, music downloading,
watching television on the internet and the growth of social networking
sites.
This, of course, creates new challenges and opportunities for marketers
trying to reach consumers, who arguably are becoming more fragmented,
and difficult to reach through traditional mass media. As such, there are
clear signs that marketers are shifting advertising and brand budgets to
online channels.
New Study
A new survey commissioned by Sapient has established that marketers
are recognising the need to make greater use of digital marketing, and
accordingly are looking to marketing agencies with proven expertise in
digital marketing techniques.
The study, conducted by Redshift Research between July and August 2008,
measured current and future usage of digital marketing activities among
500 companies employing more than 1,000 employees across the UK,
Germany, Switzerland, Sweden and the Netherlands.

3. Agency of the Future SUMMARY FINDINGS
Number Employees (Total)*
*Weighted data for pan Europe Total
The study covered five business sectors, as shown below.
Business Sector (Total)*
*Weighted data for pan Europe Total

4. Agency of the Future SUMMARY FINDINGS
Key Survey Findings
> Marketers are moving to agencies with greater knowledge of digital
marketing
> The overall level of digital marketing activities is expected to increase
significantly by up to 45% over the next twelve months, pushing up
digital marketing to account for almost one third of all marketing
activities
> Digital channels are already firmly established, with 20% of current
marketing activities going through digital channels, such as the
internet, mobile or email communication
> Larger enterprises make greater use of digital marketing
opportunities than smaller organisations
> 70% of marketers want their agency to use ‘pull interactions’ such
as online communities rather than traditional ‘push’ campaigns
> 30% of marketers expressed interest in leveraging virtual
communities (public and private) to understand more about their
target audience
> While knowledge of the digital marketing space is increasingly
important, pre-requisite skills of successful agencies continue to
be based on creativity, knowledge of brands and a thorough
understanding of consumers audiences
> 48% of managers felt that expertise in digital and interactive media
is critical or very important for marketing agencies

5. Agency of the Future SUMMARY FINDINGS
Increasing Importance of Digital Marketing
The proportion of digital marketing activities is reported to increase from
20 to 29% in the next twelve months
Currently, 20% of marketing activities across the 500 European companies
surveyed is carried out through a digital channel, such as the internet
or emails. Companies in the Netherlands are making greatest use of
digital marketing, where 29% of marketing is considered to be via a digital
channel. This compares with just 14% in Switzerland.
Currently what % of your marketing is done via a digital channel
(e.g. internet, mobile email, interactive tv)?
In 12 months what % do you anticipate being through a digital
channel?
Figure 1: usage of digital marketing channels, by country

6. Agency of the Future SUMMARY FINDINGS
The survey, however, suggests that companies are making plans for much
greater usage of digital marketing in the future. Within the next twelve
months the proportion of digital marketing activities is expected to rise
from 20% to 29% - an increase of approximately 45%.
While all countries in the survey are expected to show increases in the use
of digital marketing, the relative change will vary considerably between
countries. The lowest rate of increase is in Sweden (22%), followed by the
UK (26%) and the Netherlands (17%)*.
Germany appears to be moving from a country currently showing average
usage of digital marketing, to in 12 months a much higher than average
usage, along with the Netherlands. Compared with Germany and the
Netherlands, the UK, Sweden and Switzerland look to become the laggards
of digital marketing.
* The % change in usage of digital marketing over twelve months. For example, in Sweden
an increase from 18% to 22% represents a change of 22%

7. Agency of the Future SUMMARY FINDINGS
Larger organisations may have greater resources and capabilities to utilise
new digital marketing techniques and technologies compared with smaller
organisations. However, the internet also provides opportunities to smaller
organisations with fewer resources. This research only included enterprise
scale companies, but even here, it is clear that the largest organisations
(defined as 5,000 + employees), already make greater use of digital
marketing compared with companies at the smaller end of the scale
(1,000 – 5,000 employees). See figure 2.
Currently what % of your marketing is done via a digital channel
(e.g. internet, mobile email, interactive tv)?
In 12 months what % do you anticipate being through a digital
channel?
Figure 2: usage of digital marketing channels, by size of organisation

8. Agency of the Future SUMMARY FINDINGS
Required Expertise for Marketing and Advertising
Agencies
The need for expertise in digital marketing is beginning to challenge the
longer established techniques, such as direct marketing
There is much evidence of the growing importance of new media and digital
marketing. This research shows marketers expect their agencies to have
expertise across a range of disciplines, including digital media. The most
important skills, by far, is creativity, knowledge of branding and a proper
understanding of consumer audiences. Despite the growing importance of
digital marketing, expertise in print media is still relatively more important
than digital media. However, expertise in interactive and digital media is
already seen as equally important to the much longer established area of
direct marketing. Although Social media lags behind other disciplines, it is
still a relatively recent phenomenon. In this research there are signs that
is has already gained traction with marketers, with 34% considering social
media expertise to be important.
How important are the following areas of agency’s expertise (% Critical
and very important)
Figure 3: relative importance of agency expertise

9. Agency of the Future SUMMARY FINDINGS
The research indicates that different industry sectors have variable
requirements for digital media. The sector least likely to be engaged with
interactive digital media and to require their marketing agencies to have
expertise in digital marketing techniques is the construction sector.
Two sectors stand out for being relatively more interested in digital media –
Retail and Wholesale, and Business and Finance. In the case of the business
and finance sectors, while the fundamental skills of creativity, branding
and understanding consumer behaviour are still considered to be the most
important skills, interactive/digital media is much more important than
direct marketing, but also the gap between print media and digital media is
far less pronounced. See Figure 4, below.
How important are the following areas of agency’s expertise (% Critical
and very important)?
Figure 4: relative importance of agency expertise, by industry sector

10. Agency of the Future SUMMARY FINDINGS
Observers have written a great deal in recent years about the challenge
of digital technologies on traditional media. The consumption of media
has moved from passively watching television and reading newspapers to
a more diverse range of media consumption which includes the internet,
mobile phones and timeshifting recorded television.
All of this has placed new demands on advertisers to reach increasingly
fragmented audiences. Marketers are grappling with a string of different
methods, which have one objective in common – to engage with and find
ways to continue a dialogue with consumers.
In this research only a small minority of marketers do not think new
strategies to engage with consumers is necessary. Quite the reverse – 74%
of marketing managers agreed with the priority of using “pull interactions”
to get closer to consumers, 32% of which were strongly in favour.
(see figure 5).
The retail and wholesale sector appears to appreciate the trend most
acutely, where 87% agreed with the objective statement of using pull
interactions.

11. Agency of the Future SUMMARY FINDINGS
Q6 To what extend do you agree with the statement “It’s becoming
increasingly important that my agency uses “pull interactions” to
engage with consumers” (e.g. engaging with consumers through social
media, interactive media rather than pushing messages through mass
media)?
Figure 5: the need for “pull interactions” to engage with consumers

12. Agency of the Future SUMMARY FINDINGS
Social networking has gained significant ground in recent years with the
widespread use of Facebook and other popular sites. Some businesses
(both business to business and business to consumer) have sought to
engage with customers and consumers by establishing exclusive online
communities for their brand, or sought to reach out via existing social
networks.
This research indicates that marketers among UK enterprises are currently
least interested in using social networks, while businesses in Switzerland
and Germany are most likely to see value in engaging with consumers via
social networks. (see Figure 6).
Q9 Are you interested in leveraging public and private virtual
communities (e.g. social networking sites) to understand more about
your target audience?
Figure 6: interest in using social networks to reach target audiences

13. Agency of the Future SUMMARY FINDINGS
Sourcing Marketing Agencies with expertise in
Digital Channels
So how well prepared are organisations for taking advantage of digital
marketing? The research implies (as we have seen) that different industry
sectors and countries are adopting digital marketing at different speeds.
Companies in the UK appear to be falling behind Germany and the
Netherlands in terms of usage of digital marketing. A higher proportion
of companies in the UK are also less confident of the abilities of their
appointed marketing agency to utilise digital marketing techniques.
The reverse is true in Germany. Companies here are placing increasing
importance to the digital space, and feel their agencies are sufficiently
expert to take advantage.
Q1 How confident are you that your current agency is well poised to
take your brand through challenges and opportunities of interactive
advertising and marketing media?
Figure 7: Agency competency in digital marketing activities

14. Agency of the Future SUMMARY FINDINGS
In the last year, overall 20% of marketers indicated that a new agency has
been appointed with greater knowledge of digital media.
In Germany, 25% of companies indicated that an agency has been appointed
in the last or next twelve months with greater digital media expertise.
(see figure 8).
Q2 Have you switched agencies in the last twelve months, or plan to in
the next twelve months to an agency with greater knowledge of digital
media?
Figure 8: Timeframe of appointing a new marketing agency
As well as appointing new agencies, many companies choose to hire an
additional agency for the purposes of specific campaigns which utilise
digital or interactive techniques

15. Agency of the Future SUMMARY FINDINGS
In most of the countries surveyed there was a clear tendency to use
additional agencies, but particularly in the UK, where 41% of managers
claimed to have hired an additional agency in the last twelve months, or
plan to in the next twelve months. (See figure 9).
The exception was in Germany, where only 13% have appointed an additional
agency in the last twelve months. The reason for this maybe cultural, insofar
as the research indicates an overwhelming preference in Germany to use
a single, full service agency, rather than several specialised agencies. 62%
of managers in Germany preferred a single agency, as opposed to 37% in
the Netherlands, 44% in the UK, and 52% for all companies included in the
survey.
Q3 Have you hired an additional agency to handle digital or
interactive campaigns in the last twelve months, or plan to in the next
twelve months?
Figure 9: Timeframe of appointing an additional marketing agency for digital
campaigns

16. Agency of the Future SUMMARY FINDINGS
More information...
Beate Keller, Sapient
bkeller@sapient.com
Fon: +49 89 552 987-111
www.sapient.com