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19 April, 2016

Australian Digital Marketing Agencies See Strong Growth and Competition Ahead

How do digital marketing agencies see the rest of 2016 shaping up? Kentico Software has announced a new survey conducted by independent global research agency Millward Brown that looks at the opportunities and aspirations of today’s digital marketing agency decision makers.

The survey interviewed 300 senior managers and directors of digital agencies across Australia, the UK, Europe and North America and explores what many of today’s digital marketing agencies are doing to maintain competitiveness in a market that is experiencing both growth and rapid change.

Local Agencies Leading the Way

A key finding from the global survey was that Australia, together with New Zealand, appears to be the most progressive digital marketing region in the world. Local agencies are planning to outsource work more and will change their CMS/digital marketing platform more than agencies in other regions. Other agencies, especially in the UK and Czech Republic, do not plan such significant changes this year.

The survey found that of the agencies in Australia and New Zealand surveyed:

7 per cent were planning on investing in new software
14 per cent were planning on investing in new hardware
20 per cent were planning in outsourcing more work
21 per cent were planning on changing their CMS/digital marketing platforms
17 per cent were planning on acquiring another company (and 18% were planning on merging with a new company)

“That Australian digital marketing agencies lead other major markets in investment and expansion plans in 2016 illustrates both the health of the local sector and the increased importance organisations are placing on reaching their target audiences through digital channels,” said Wayne Jasek, director of APAC operations for Kentico Software.

According to the global study, the vast majority of digital agencies are expecting high growth. 90 per cent of higher-performing agencies plan to hire new people. 71 per cent of agencies overall expect to invest more money in software.

Half of the agencies surveyed plan to outsource more of their projects while slightly less than half hope to grow through acquisition. Those that plan to hire more people and invest more money in software and hardware have especially high hopes.

But Challenges Remain…

According to the survey, the greatest challenges facing digital agencies around the world are:

Competition (80 per cent)
Clients’ lack of understanding of digital marketing (78 per cent)
Clients expecting a high volume of work at low cost (78 per cent)
Clients acquiring but failing to use digital marketing tools (73 per cent)
Not enough clients (58 per cent)

Australian agencies, in particular, face challenges around not having enough quality staff (14 per cent), being unable to complete the majority of their projects on time (11 per cent), and being unable to deliver profitable projects (12 per cent).

People Remain a Key Driver

When asked about the greatest contributors to success, the digital agencies surveyed report that it came down to people—specifically, clients being able to clearly communicate what they need (#1), employees understanding the task at hand (#2), and clients being willing and able to cooperate (#3).

“This new survey suggests that digital agencies maintain a positive outlook for 2016 and plan to make important investments in people and technology,” said Kentico founder and CEO Petr Palas. “They continue to focus on solving the most pressing digital marketing challenges.”

Show Me the Money

So who are digital agencies most interested in hiring? Graphic designers, says the survey. They are being paid more than developers and marketers, particularly at higher-performing agencies.

Interestingly, when it comes to client fees, Australia leads the way with the top average project prices by country:

Australia/New Zealand: $190,000 USD
Benelux: $140,000 USD
United Kingdom: $125,000 USD
United States: $105,000 USD

The Digital Agencies 2016 Report includes top areas of investment, technology, and more. To download the report, please click here.

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