What’s Behind the New Love Affair Between Ad Agencies and Enterprise Software?

Inplace #2

According to Gartner, by 2017, CMOs will outpace CIOs on IT spending. This shift at enterprises is significant and something that major ad agencies can’t afford to ignore. In today’s new digital marketing ecosystem, leaders at ad agencies and enterprise software companies have begun to solidify relationships on the back of this transition that benefits not only each other, but also the brands they both serve.

There’s no doubt that a new digital marketing ecosystem has arrived.  Analysts have predicted and talked about the shift to mobile for some time, and evidence continues to validate this in the revenues of major companies. Putting aside the timing error of its recent earnings release, Google’s ad sales were up for the quarter but down year-over-year due in large part to brands investing in less expensive mobile ads. In addition to mobile, this new ecosystem includes an increase in social media, interactive display ads, cost-per-view video – and importantly, a sharper focus on metrics that provide actionable insight.

Rupal Parekh, Agency Editor at Advertising Age, recently wrote about software giant IBM’s efforts to leverage relationships with global ad agency partners such as Publicis Groupe and WPP’s Ogilvy to introduce its e-commerce platform to CMOs at major consumer brands. Whether dealing with e-commerce, CRM or performance marketing (search, display, affiliate), brands need to invest in software that helps enable global growth. To accomplish this, CMOs at these brands have started turning more to third-party SaaS platforms that provide scale, centralization and real-time insight into the ever-increasing amount of data.

In the performance-marketing arena, these budding relationships are a win-win-win for ad agencies, brands and software companies that can provide the right solutions for global growth. For an enterprise software company, agency relationships open doors to a variety of brands that seek their technology solutions and global services to unlock the potential of valuable channels like search and affiliate. With the software and infrastructure in place, agencies with global capabilities have a centralized platform to sell in the service side.

For ad agencies, the return benefits of recommending, managing and operating appropriate enterprise-level performance marketing software solutions for its clients are clear. This strengthens both the agency’s existing relationships and makes it more attractive to prospective clients – both of which create new revenue streams. After all, brands benefit when they work with an agency that can both design and implement global performance marketing campaigns on the front end and manage the program’s important analysis, insights and support services on the back end.

There’s no getting away from the fact that CMOs are under pressure to make decisions based on big data, and that ad agencies are perfectly positioned to nurture this shift in IT budget allocation and spending. In light of this, aligning now with the software winners of tomorrow makes a whole lot of sense for ad agencies. There are definitely some exciting opportunities and innovative times ahead for everyone as this new courtship continues.