Why Digital Marketing Agencies are Going out of Business
In this evolving technological age, digital marketing has become an essential way in which sellers reach buyers, their customers. With the advent of digital marketing, thousands of digital marketing agencies have opened up over the past 10 years to take advantage of the opportunities associated with handling digital campaigns from clients. Surprisingly however many of these agencies have started to fail at an alarming rate. While there are many reasons for the rapid closing of many digital marketing firms there are a few catalysts that have accelerated their demise.
- Increasing competition in digital marketing
This intense competition among professional marketers around the globe makes it difficult to get visibility and stand out in any single campaign marketing effort. Marketing agencies must devise methods to separate their clients from the crowd and make them stand out. The strategy used must make their clients stand out in social media, with content readers, and PPC campaign. Coping with competition can be overwhelming.
Due to the increasing competition, the best-devised efforts using the latest trend and techniques can seem ordinary when it is realized that everyone else is doing the same thing. You may have been told that a lot of content is needed to give customers information and make you a thought leader. But then you find everyone else has been told the same thing and customers have to cope with an overwhelming flood of information which they won’t find time to read.
As a digital marketer, you have to find a way to cope with the competition and stand out. You will need to realize that you need to focus on quality rather than quantity. The intense competition requires that you produce content with a purpose and strategy. It must have value for the reader and fit with your wider marketing plan. Also, the competition does not require a presence on every social media channel.
It requires finding the place of greatest impact and making the most of it. The main strategy should be to focus on customers and their needs. This would set you apart in an area that is becoming very crowded.
- Tools and software enabling clients to digitally market themselves
Apart from digital marketers having to cope with competition in a crowded field, there are many online tools and software that enable their clients to digitally market themselves with ease. The first tool that comes to mind is social media. There is organic social media, then there is paid social media along with options of social media management tools to digitally manage campaigns.
- Organic Social media
On organic social media, there are over two billion Facebook users, 320 on Twitter, and over 700 million on Instagram. These social media platforms provide the marketer’s clients with a wide scope to market themselves digitally, directly to their consumers. Businesses, both large and small now have direct access to such a large number of people to whom they can reveal products and services.
Social media, with so much time spent by so many people, has become an important channel for companies to market themselves. For this purpose, they have several social media management tools and engagement platforms available and which companies of all sizes are utilizing. Companies can use social media management tools such as Sprout Social, Wyng, and woodbox for their marketing campaigns.
- Paid social media
Then there are paid social media tools that go beyond normal social media reach. With paid social media a company can advertise its products and services to targeted active users. These major social networks have data about users that marketing agencies may not have access to. Using paid social media tools are becoming a better channel for businesses to reach customers directly and could be a factor in the waning of the role of marketing agencies.
Tools in paid social media marketing include the software Nanigans which focuses on Facebook marketing. This software also has features that allow access also to Twitter and Instagram. Facebook also has its own tool, Facebook Power Editor to create and run advertising campaigns without third party fees as that paid to market agencies. Twitter Native Platform is also another social media network that provides for paid advertising.
iii. Email marketing
Email marketing tools are also enabling clients of marketing agencies to market themselves. This tool is considered the most effective marketing tool based on return on investment. It continues to grow and provides companies with a way to reach consumers directly rather than through a marketing agency. Email marketing platforms include MailChimp, Emma, Marketo, and GetResponse.
- The inability to collect payment cause severe cash flow issues.
Like with any other business, healthy cash flow is important to the health of digital marketing agencies. Cash flow for a business is determined by the volume of transactions the business can accomplish and how well the service is paid for and how efficiently payments are processed and collected by the agency.
As discussed above, there are areas in which digital marketing agencies face challenges in their industry. First, there is an increased competition which makes it difficult for agencies to stand out and attract the volume of business to keep a healthy cash flow. Also, the number of ways in which clients can do their own marketing reduces the demand for the services of digital marketing agencies. These challenges are added to problems they may have in collecting payments.
With the challenges of increased competition and direct marketing by clients, marketing agencies would be more inclined to offer deferred payments with more leniency. This situation will ultimately lead to a need for collection. The inability of agencies to collect their payments will cause cash flow issues. Coping with collection would put additional strain on agencies which can be helped by engaging a third-party collection agency.
Having the help of a collection agency will allow marketing companies to focus fully on what they are dedicated to, marketing. They will be able to give their best service and attract more clients. Their problems with collection will be in the hands of an agency equipped and more competent for that task and help improve their financial health. Marketing companies, with collections handled by an agency, will overcome any existing cash flow problem.