Technology is the number one factor driving current transformation in B2B. And to some extent, it has displaced marketing agencies as the purveyors of ‘new’ ideas and innovation. But in the spirit of ‘if you can’t beat them, join them’, many agencies are looking to counteract this shift by becoming tech vendors themselves. The result is a new breed of agency, where classic services are combined and complemented with a bespoke technology offering. This metamorphosis of the traditional agency model not only helps differentiate these agencies from their competitors but significantly creates new revenue generation opportunities.
So, which B2B agencies have joined the tech game? What’s their motivation and experience, and what insight can they share?
Cyance: Reinventing a business
Two years ago, Cyance recognised changes in the market and the need for the agency to adapt. So it invested in data scientists and machine learning technologies, plus expanded its data partnerships. The result was the launch of its SaaS-based Nexus Predictive Marketing engine. The software helps clients detect, predict and focus on their best sales opportunities. The machine learning intelligence built into Nexus means campaign results can then be fed back into the predictive engine, which leads to a virtuous cycle and increased ROI.
“Reinventing a business so radically isn’t an easy process,” explains Mike Housley, founder and director at Cyance. “Effectively we were a new martech start-up using the same Cyance brand. This meant closing down parts of our business and investing in new people with different types of experience and skill sets.”
While it was a steep learning curve, the transformation paid off and Nexus is now an integral part of Cyance’s offering.
Housley concludes: “We have the advantage of developing our tech solution from a heritage of B2B data and marketing experience and understanding. So Cyance is perfectly positioned to create a solution that works.”
Synergy Creative: Understanding the end user
After discussions with B2B clients, Synergy Creative realised there was a gap in the market for an internal social media platform to help brands ramp up internal engagement without any danger of leaking commercially sensitive information.
“Our agency explored current social curation platforms but the problem with internal comms is that you need to be able to share stuff in a closed environment and not just have the feed of information pulled in from a third party like Twitter, Facebook or LinkedIn” explains Chris Giddings, marketing manager at Synergy Creative.
Giddings revealed another aim of developing the new platform was to create something flexible that allowed brands to dip their toe without committing to expensive licensing fees.
The agency collaborated with its tech partners to create the platform – testing, refining and maintaining transparency with all stakeholders throughout the development process.
Giddings divulges: “The challenge was not trying to create something with a million different elements as long as your arm, but instead keep the basics right. At the end of the day it comes down to usability and really understanding the customer. A lot of our clients have a workforce with a large percentage of remote, non-desk workers who are mobile savvy, so the platform’s mobile capabilities were a huge consideration.”
Earnest: Advantages over tech vendors
Earnest’s navigation into the tech space came through its launch of Event Wallet – an app that allows conference and trade-show delegates to access, collect and share content provided by sponsors and exhibitors. On the one hand, it seems a tactical solution, which doesn’t appear to have a direct impact on the main business. But, as Paul Hewerdine, partner and planning director at Earnest points out, it’s actually a pretty astute move with wider business implications.
“If agencies can build a product and get the commercials right, this enables a different kind of business model. It creates recurring revenues (rather than fee-based work) and the ability to scale without adding more people.”
Hewerdine echoes other agency spokespeople when he suggests the primary reason clients choose agency solutions over third-party tech vendor’s offerings is because agencies are usually better at understanding the end customer.
“Tech vendors are very good at developing technology and then finding a problem to solve. Agencies come at it the other way. ‘Find a problem, fix a problem’ has always been our philosophy.”
This ‘outside-in’ approach is not the only lesson Earnest has to share with other agencies looking to take their first steps into the tech development space.
“The most important thing is to develop a minimum viable product (MVP) first and then test it in a commercial scenario,” advises Hewerdine.
“Even if you think you know what people will need, you always be surprised and a MVP-approach means you can iterate on real-life requirements. We’d definitely do it again – in fact we’ve got plenty more tech-based products in the pipeline.”
MomentumABM: Hyper-charging efficiency
Unlike the other agencies featured in this article, MomentumABM developed new technology in order to address its own needs, rather than those of its clients. The agency built a new insight platform, which it uses to automate part of its work without interfering with a client’s tech stack. The agency also built a project workflow tool that enables it to run projects seamlessly through the agency, rather than though a third-party solution.
While the tech solutions are not available to clients, they’re still a deviation for the agency. And, of course, it all has a knock-on effect. More efficient in-house systems have brought down client costs and freed up agency personnel, which has enabled scale across more clients. It also means new client services can be offered, as Alisha Lyndon, CEO at MomentumABM, explains: “We could hone areas to optimise our service offering. For example, if automating more would save time or improve accuracy, we could build this into the roadmap. And we could start offering new services like connecting insights with content logic for sales enablement.”
In the same way that clients are motivated to use an agency’s tech solution rather than a third-party tech vendor’s, MomentumABM also decided it was the right path to take.
“There was nothing in the market to do what we needed,” explains Lyndon. “[Our need for a solution] was so integral to our business that briefing a third-party wasn’t viable. In addition, spending time customising and integrating a third-party stack would’ve taken a similar investment level versus building a priority solution ourselves.”
“We were able to test and develop a platform that would work in practice not just in theory. We built it and used it in multiple cases across the agency and multiple client scenarios. We essentially ended up with focus groups comprising live customers. We were able to find out which features were really making a difference and which were just there for vanity.”
Rooster Punk: Maximising resources
Recognising a gap in the market where people can discover exciting new brands, Rooster Punk embarked on its own tech journey to launch Kampfire – a new social media ‘flirting’ platform.
“Think Pinterest for brands,” explains Paul Cash, CEO of Rooster Punk. “The storytelling platform aims to showcase and catalogue cool new, hot-to-trot and innovative brands, helping them compete on their story, not just their product.”
Cash explains the nature of Kampfire’s technology meant the agency was able to utilise in-house resource and existing skills sets rather than hiring or employ specialist developers. The agency subsequently assigned three full-time members of staff to solely work on the new platform.
“There’s a cost to the agency as there’s now less resource to focus on the core business but we think it’s worth it. Plus, because the Government offers tax relief to brands for technology research and development, we’ve managed to take advantage of this incentive.”
Cost implications and the resulting ROI are definitely a key challenge for any agency looking to enter the tech space. So what plans do Rooster Punk have for Kampfire in terms of it generating that all-important revenue? It’s an ongoing dilemma, as Cash reveals.
“Do we build big and be the first platform of its kind in the market, and then monetise it like Facebook and Twitter? Or do we monetise it while it’s still small to limit growth, but then risk a competitor copying the idea?”
Key drivers and deliberations
Agencies across the board are looking for ways of forming longer-term relationships with clients. Retention fees, particularly in B2B, are less common so there’s a significant level of financial uncertainty due to erratic billing, which is challenging when there are overheads to manage.
Merging into the tech space and developing an agency’s own technology product to complement or enhance a client’s tech stack is a shrewd way of creating that all important ‘sticky engagement’. It helps grow the client user base and create a predictable revenue stream.
However, careful consideration is needed so that it’s not just a box-ticking exercise to create a new line item on the monthly fees, warns Daniel Shaw, co-founder at Encore Digital Media.
Shaw insists agencies offering any kind of new tech solution, platform or app need the upmost transparency and be able to justify why clients should choose their solution over others that already exist in the marketplace. The key question at the start of any new tech project, insists Shaw, must always be: “Why is there a need to create an alternative?”
