Digital Marketing Blog

Tony Ahn's digital marketing blog, bringing you tips and tactics on content marketing, social media marketing, industry news and trends.

Digital Marketing: The Future is Not Pretty for Solo Consultants

- by , in Internet Marketing, News, with 9 comments -

Digital marketing professionals currently fall into three tiers: the solo consultant, the small digital firm, and the large PR or marketing communications agency. If you fall into the first tier, your days are numbered. You will face increasing competition from fellow consultants, as well as stiffer competition from better funded digital firms that have twenty people like you on staff.

Digital Marketing’s Evolution is Like Web Design’s Evolution

The field of digital marketing is evolving in a manner not dissimilar to how web design evolved around the turn of the millennium. In 1997, a friend called me and said “Hey, can you teach me HTML?” 18 months later he was making $70k a year as a web designer, with a firm that contracted with Microsoft. These are the days of wine and roses for digital marketing professionals. In the mid-to-late 90’s, there were few degrees specializing in web design. Supply of qualified professionals was scarce and demand was high. Today we digital marketing professionals find ourselves in the same situation. A knowledgeable social media professional can freelance as an independent consultant and do quite well. However, digital marketing programs are springing up and thousands of people are entering the field. As the supply of qualified professionals increases, solo professionals will have a harder time, especially as they compete with the digital firms that are starting to grab market share.

These digital firms have better resources, and can do more in-house. In the digital arena, it is common for a client to have wide and varied digital marketing needs, including content marketing (in all its various forms), SEO, reputation management, web design, social media marketing, and more. Many solo consultants specialize in a couple of those, and that’s all they do. The more established ones are able offer a wider menu and outsource the work they don’t do themselves. Their clients tend to be small to medium enterprises (SME’s). Digital firms, who can handle more and larger clients, tend to establish reputations that give them a better shot at landing large corporate clients, partly because they have marketing budgets.

Enter the 800 Pound Gorilla

However, a third type of entity is beginning to enter the digital market: forward-thinking full service PR agencies and marketing communications agencies . And these entities are going to one day dominate the landscape, as they pose a threat to both digital marketing consultants/firms as well as firms in their traditional industries. Local firms that service a single major city as well as large global international firms have access to large corporate clients. While most full service PR firms and marketing communications agencies outsource digital marketing to small firms that specialize in it, the ones that see the lay of the digital land are quietly buying small firms or hiring full departments of digital marketing professionals. They are beginning by selling digital marketing services to their current client rosters. As they learn how to integrate their new-found capabilities into their existing marketing services, they’ll innovate new approaches to digital marketing that integrate with non-digital initiatives. How do I know? Because I work for an agency that’s doing just that, and I’m not the only one, although there aren’t that many of us worldwide yet. But we’re coming, and we’re doing well because we’re early. We’re selling something nobody else has, although we won’t be for long, so we’re innovating as we go, in order to capitalize on a first-to-market advantage that won’t be an advantage forever.

The most business-savvy of the current independent digital marketing professionals will go on to start their own digital firms, while others will become heads of digital marketing departments in companies, working for marketing directors. The majority of the rest who stay in the field will eventually go to work for the ones I just mentioned. This is similar to what happened to late 90’s web designers. Digital marketing firms will face increasing competition from large full-service marketing communications agencies that know marketing to the core and have access to larger, better paying clients. If you’re Fortune 500, who do you want to work with? An ad agency, a PR firm, and a digital firm? Or one company that can do serve all those functions and make sure that each part works in concert with the other?

What are your thoughts?

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  • It won't be pretty if these solo consultants just stick to what they're doing now. But more often that not, these guys are probably smart enough to know that they need to roll with the punches. They will constantly evolve with the space and upgrade their skills. Something that these bigger agencies might not be able to do as quickly.

    My two centavos.

    • Hi Ricky! I think that as digital marketing continues to specialize, solo consultants will have to specialize with it. For example, in the late 1990's you just had web designers that did it all. Now you've got content specialists, user experience specialists, coders, and others. Similarly, digital marketing has just started to specialize, with new specialties emerging regularly. I think the consultants that stay solo will either have to supply other firms offering their services out to clients, or will themselves have to offer other services and outsource. And if they're successful at offering outsourced services, they'll eventually become digital firms, as they start to offer those services in-house. Right now, offering a service in-house means a better profit margin. In the future, as price competition increases, it may become necessary just to stay in the game.

  • P-A

    Agreed Tony, the market is very fluid.

    Digital marketing will slowly become a commodity. There will be economies of scales leading to volume game and low margins, High end brands selling little but with a hefty premium, and there will be vertical integration -such as with the innovative Cross-media PR firms that you refer to.

    Unlike most other industries though, I do not think that this dynamism and speed of change will slow down. Speed of change is what gives the Small and Nimble advantage over the Large and Established.

    I do not know what these changes will lead to. But I am sure that the Small and Nimble will continue to survive, even if in a field that can barely be called digital marketing anymore.

    For those who want to stay in digital marketing, I believe you are spot on. Let's give it another 5-10 years?

    Thanks for the great thought triggers!

    P-A

    • Thanks for writing, P-A! I agree that dynamism and speed of change is de rigueur for this industry, but I think that competent large agencies will be able to adopt an agile approach that rivals the smaller players. For example, at my agency (which is emerging into the third tier I mentioned in my article), I can have a blog set up and daily posts coming out within two weeks of the very first meeting with the client. That's fairly agile. If its a crisis situation, we can move faster. That's going to cut into the unique selling proposition of the solo consultants. Not many clients need to move faster than we can handle.

  • Marga

    As a maverick consultant, I can feel the impending sense of doom ha ha ha

  • Agree with Tony's article. What the small guys have to do is really find a niche. Not everyone can afford the services of the big player(s) anyways. I think there's still a big market of SMEs out there that need the "small folk" for their digital campaigns. And yes, like what the other comments said, an evolution of skills will determine who stays and who falls.

    My two cents 🙂

  • manolo almagro

    Nice post, – makes me want to start my own agency 🙂 actually, I think there's one more iteration of digital marketing that will take place. Big brands (especially ones with multiple brands) will start building their own internal digital marketing teams, Creating a shared resource, in-house team to handle digital across all their brands, further pushing digital agencies into a service resource role.

  • This is similar to content distribution on the internet. If you fight these giants head on at the level they rule, medium/small marketers don't stand a chance.

    the trick is to be able to provide an alternative in strategy, scope, methods as well as costing. not everyone will go with Big Gorilla Agency. A lot of medium and small industries may not afford the service or would want another way of doing things.

    my two cents as well. =)

    Awesome Blog, Tony! More Power!

    • I agree. Like others have said, solo consultants with very niche specializations will continue to do okay. But by very niche, I mean something so specialized that an agency or digital firm would not be interested in hiring full time. For example, one commenter mentioned that he specializes in law as it applies to social media, and as that's something that not many clients need (although the ones that need it are probably looking for it desperately), he'll continue to do well as long as enough agencies and digital firms can find him. He's the kind of guy who can make a comfortable living by partnering with two dozen firms across the country and consulting with all of them. However, the consultants that aren't so specialized (and the generalists–people who specialize in being journeymen of virtually ALL the specializations) will face tough competition, as I mentioned in the article.

      Thanks for your kind compliment. I'm glad you find my blog helpful.

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