On Jul, 14 2021
FOR IMMEDIATE RELEASE
Report from Borrell Associates indicates media agencies and digital services spending reach an all-time high
MOUNTAIN VIEW, CA - July 14, 2021 --
Digital agencies have almost quadrupled in number in the last decade, and spending on digital media services other than advertising has increased faster than media spend in local markets. According to a new report from Borrell Associates Inc. Scaling Digital Agencies, which was sponsored by Frequence, digital agencies associated with legacy media companies stood to benefit from economies of scale as the market increases.
"For local media companies, having a digital agency has become vogue," said Gordon Borrell, CEO of Borrell Associates. “These media-borne agencies have grown at twice the rate -- eightfold in the past decade. There are now about 2,500 of them across the U.S. But many have begun hitting a wall because they haven't been able to scale the business all that well. With the help of Frequence, we identified key characteristics of those who have been able to scale their agency's sales processes beyond just closing a handful of clients every quarter."
Beyond the massive growth of today’s agencies, the report also uncovered the significant rise of digital services spending among agencies and examined common practices. Digital services, including all things required to manage a business’ digital presence and marketing communications, accounted for $748 billion in business spending in 2020. Among those costs, Web Hosting and SEO services led the pack with $44.59 billion and $34.87, billion respectively. Following close behind was Website Design/Maintenance, Social Media Management and Online Video Production.
Additional data from Frequence and Borrell indicated that agencies utilizing software to automate proposal generation and workflow saw significant increases in revenue and efficiency. Across several control groups, monitored from 2019 to 2021, agencies actively engaged in a workflow program saw annual revenue per sales rep increases ranging from 20 to 200 percent - due in large part to increased proposal generation.
“As the digital agency space continues to become more and more crowded, the need to scale operations and create greater efficiencies has never been more vital,” said Tom Cheli, CEO of Frequence. “Staff capabilities will always hit a saturation point, but as this report has shown, scaling is achievable to companies that have, or can implement, a digital focus that broadens their vision beyond their own core product.”
This joint report examined the performance of 271 sales representatives at 35 local media companies between 2019 and the first quarter of 2021, for a total of 27 months. The data examined sales activities, number of proposals submitted, and both the number and value of closed sales. Borrell Associates and Frequence will be hosting a webinar on July 21 at 8:00 am PT/11:00 am ET highlighting key insights on scaling media-borne digital agencies - interested registrants can sign up here. The full report can be accessed by visiting https://borrellassociates.com/frequence.
Frequence is the leading provider of software for media companies to automate and grow their local advertising sales. Through its full-stack workflow and campaign management software, Frequence provides the necessary tools to launch, manage and optimize omnichannel campaigns. From sales intelligence to measurement and analytic tools - all integrated within a platform that creates personalized, multi-channel media proposals with campaign insights - Frequence users have a complete end-to-end solution.
In an industry overwhelmed by point solutions, especially among media companies and buyers, Frequence has developed the first, comprehensive platform that empowers users with state-of-the-art technology while optimizing person-to-person relationships. Leveraging an advanced framework and AI, Frequence makes selling local advertising scalable and profitable.
About Borrell Associates, Inc.
Borrell is the premiere provider of local advertising data and insights. The company's client base includes thousands of investors, ad agencies, and media companies looking for detailed ad-spending data, fact-based consultation, and unique insights. Borrell runs the largest survey of local advertisers in the nation and tracks and forecasts local ad spending across any U.S. market. Its principal product is Compass, which can be seen at www.adspending.com.
Hugh S. Moore
Broadsheet Communications for Frequence