The Future of White Label Digital Agencies

April 28, 2016

Some eight years ago, there was a debate if white label digital agencies would survive. Gone are those days. The new debate is if the Fortune 5000 corporate organizations can survive the digital age without them. Many wonder how these corporate giants are shifting their resources towards digital agencies rather than doing the work in-house.

Unlike before, the Fortune 5000 did not face competition from the likes of their digital counterparts. It’s no longer a show down with one lone gunman getting to hurt his rival. And it’s no longer a game of chicken where one side can choose to back out. It’s different.

Now, it’s millions of small startups and other companies going after that one corporate giant with the hope of bleeding him dry. Can these goliaths survive the wrath of these innumerable little attacks? The answer to this question will be determined by what the future agencies would look like, as they play a key role in helping large companies stay nimble and innovative with this new breed of competition.

Narrower Role for Big Players, More Play for the Smaller

White label digital agencies are typically more specialized than in-house teams of engineers at larger corporations for many reasons. The smaller firms can’t bring together such a vast collection of fields and adhere them into one well-functioning unit. And it has always been so. So why should the big guns think about loading in a different way? What’s changed?

Here’s what: the competitor.

Big companies no longer face other big companies with similar resources. Thanks to the newly-emerged dynamics of competition, they face other firms or startups, big or small, with different resource-allocation regimens. Until now, the giant companies would have similar resource allocation for similar projects but things seem to be getting more & more complex at these companies everyday so they are now turning to digital agencies for help.

Growth depended on expansion instead of better penetration in the same market. That has changed. Now, a much smaller firm would show up from nowhere, hire some specialist digital agency and simply drown all the marketing efforts of its big competitors. Why? Because the digital agency is naturally a far more specialized, competitive unit as compared to the behemoth’s small, less-specialized department.

The legal department of Toyota is nothing compared to a big law firm. The latter will simply beat it on any given day. The same goes for white label digital agencies. Unilever, Proctor & Gamble, or Walmart… their small IT departments are no match for the ultra-competitive SEO firms out there. They just can’t compete with them. What does this mean for business?

Rival companies are no longer coming out to fight one another. They are either paying the little guys to do it for them, or the little guys themselves are the rivals. In any case, the nature of the competition has changed. The game has become far more complicated and specialized now.

It’s Never Going Be Like Uber

Advocated by Clive Sirkin, the CMO of Kimberly Clark, is a new theory that sees big companies becoming a lot like Uber. They won’t be doing everything from collecting the raw material to delivering to the shelf. Instead they’ll appear much like Uber. They will outsource the different parts of their work to smaller agencies, and the former will have just one thing to do: manage all the small players and run the show from the background. And this theory has spread like wildfire. It has been picked up by, among others, Forbes and Adage. The theory appears interesting, but with respect, it’s never going to be like Uber. There are two reasons for this.

First, Uber offers no service in the sense we are talking about. When we use Uber for a ride, we don’t trust Uber with anything other than the fare, the car’s condition, and a background check of the driver. We know that we’re going for a middleman-style company and not an A-to-Z end product. In this sense, the smaller agencies appear more like Uber than the big ones.

Second, it’s just not possible that digital agencies will completely wipe out IT departments at large companies. To start, most companies wouldn’t trust an agency with their highly sensitive information. On top of that, search engines like Google try to see through the SEO techniques that are meant to defeat its main purpose: showing the most relevant search results. Google will never let an SEO company gain enough ground that it will hold any major advantage over large companies in searches.

Third, getting everything done by an outsourced company leads to inefficiency. You wouldn’t send your memo to another firm to get it typed—that’s inefficient and costly. A smartly managed company would never do that.

So What Does This All Mean?

Digital agencies will become more specialized. Some will begin focusing on building white label mobile apps for clients. They’ll do the work for large clients where they’re out of their depth—not like now, when they do almost everything.This will transform the world for digital agencies. Over the next few years, more work will likely be outsourced to specialists, giving white label mobile app resellers working with Bizness Apps a bigger market share and more opportunity.

Digital & Social Articles on Business 2 Community

(19)