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The social media agency war: Who’s winning?

While social media has been the industry buzzword for the last couple of years, it looks like 2013 will take the trend to new heights. Several marketers, while declining to reveal figures on the increase of their social media budgets for the year, all confirmed to Marketing that deeper investments would take place.

For example, Damien Cummings, regional marketing director, digital & social media said that the brand’s focus is to increase engagement and digital marketing and social media is the best way of doing this cost-effectively. While declining to reveal the extent of the increase, Cummings confirmed that Samsung’s targets for digital and social media spend are “significantly higher in 2013 than in previous years.”

Samsung USA recently spent US$10 million with Facebook to promote the Galaxy SIII, he added. “Not only was the campaign great for increasing our engagement with our Facebook community but generated over US$129 million in revenue,” said Cummings.

Rod Strother, director,digital and social centre of excellence, Lenovo also said that the brand had increased its budgets particularly for social media.

Rene De Monchy, marketing director, Asia Pacific Breweries(APB) echoed the same answer on the company’s budget increments for social.

Unsurprisingly, agencies have been stepping up social media efforts, with pure play social media agencies slowly taking prominence, pitching “specialist” services for clients.

But do these really have an edge over agencies boasting a more integrated digital offering?

‘Generalist’ versus ‘specialist’ shops

Strother from Lenovo believes in taking the specialist approach. The brand recently gave its global social media duties to social media agency We Are Social.

“Some PR agencies have remodelled their offering to now position themselves as providing social media services with mixed results.  Some international agencies have put some warm bodies around a social offering on the basis that their clients are asking for it. It’s the pure play social media agencies that are the most interesting as I feel they are facing the biggest challenge. As social media is what they focus on, there will be an expectation from clients that they provide a higher level of counsel and expertise,” Lenovo’s Strother, said.

Strother reasoned the social media team needs the ability to scale up when running multiple campaigns globally, which is where its social media agency comes in.

“Would you have your direct marketing agency provide you with PR? Not to say that you can’t have an integrated offering from an agency, but I think that a PR or digital agency needs to demonstrate that they have genuine expertise in the area of social media in order for companies to work with them,” he said.

For Samsung, it seems to favour the integrated approach.

Samsung’s Cummings says that its community management and social media marketing is handled by its two creative agencies Leo Burnett & Cheil Worldwide, backed up by media and analytical support from its media agency Starcom.

“I believe in working closely with an integrated agency that can deliver great work and highly engaging campaigns across all media – not just digital or a particular social platform.”

“Specialist agencies have a strong role to play to help us with gaps in our capability but may lack the scale and local presence in many Asian markets to be a truly integrated partner. This is critical for our local marketing teams,” Cummings, said.

APB’s De Monchy echoes a similar view to Cummings, mentioning how Tiger Beer’s social media account goes under the remit of its digital agency DDB, which manages its Facebook assets, tracking ‘talkability’, views, ‘likes’ and shares for its content.

Agencies slug it out

Simon kemp, managing director, We Are Social says agencies like itself focus on building strategic social solutions that take advantage of the specific opportunities within different social channels, rather than trying to squeeze in content they’ve developed as part of other activities.

He argues also that reaping economies of scale in hiring an integrated offering is a myth.

“Non-dedicated agencies don’t operate a business model that can cater to a genuinely conversational approach, so they have two options: either compromise on quality, or recoup the financial difference somewhere else by using social as a trojan horse to sell other services.”

Ian McKee, chief executive officer, Vocanic also argues that generalists rarely offer the same depth and knowledge of a domain as a specialist, but do offer the convenience that the integration and project management is delegated to the agency.

“Compared to bigger generalist agencies, specialist tend to be leaner, have fewer overheads to cover, and so they can be more cost effective and still be profitable.

Additionally when a firm is aligned around a singular domain, the learning from each client becomes accumulative knowledge which can benefit each client. Conversely, in generalist agencies, experience is spread over many domains and so typically in each domain they have less, and this translates to lower performance and results.

However, Neil Hudspeth, chief digital officer, Leo Burnett Asia Pacific differs from the aforesaid views saying ultimately, clients still need solutions for their problems that span across all the touch points of their ecosystems (or brand worlds), in a cohesive and orchestrated manner, catalysed around one organising thought or big idea.

“This is more efficiently and effectively achieved when one lead agency is orchestrating, rather than working within a fragmented agency and ecosystem approach,” he said.

Additionally, the value a specialist agency can provide can be replicated and available at any good integrated agency, whether it is a service, a platform, a tool or people, added Hudspeth.

Basically, social is a fundamental element of engagement that every agency should be fully capable in, and Hudspeth believes many an agency has reached a level of maturity that can rival any “specialist shop.”

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