Digital Margins for Agencies: 5 Ways To Increase Margins

If you’re an experiential ad agency, digital needs to be a big part of your day-to-day routine. Unfortunately, digital often takes a back seat to customer experience and an agency's digital margins.

Despite this, digital provides a real opportunity. As there’s a huge digital universe that happens before, during, and after an experience:

• Before the experience, digital can drive customers to your event through pre-registrations.
• During the experience, there’s an opportunity to interact digitally with your audience.
• After the experience, there’s a big amplification or consumer follow up that continues the conversation and nurtures your valued guests.

Digital amplifies the consumer experience and provides a great deal of client value. Making decent margins on digital tends to be a challenge for experiential ad agencies. Why? Digital elements are all one-offs and are relatively inexpensive items that clients won’t invest heavily in. It’s hard to maintain your profit margins for the digital pieces you develop.

Here are five ways you can maximize digital margins:

1. Cut the freelancers.

   Of course, freelancers are a necessary part of any agency. We’re finding an increasing amount of factors to consider and things to do in order to develop truly effective digital experiences before, during, and after the event. This may mean that you need to hire a lot of different freelancers to get the job done. Unfortunately, freelancers are still expensive. It’s difficult with the overhead costs of managing those freelancers, freelancers’ fees, and everything else to maintain favourable margins.You need to find a way to cut the freelancers, either by replacing them with in-house resources—which can be expensive if you don’t have a degree of work to support it—or software products, as software products are increasingly filling that void.

2. Productize the repeatable stuff.

   Although every client’s strategy is unique, there are core building blocks that are repeated over and over again. Whether it’s lead generation, web registration, social amplification, social media walls, or photo booths—all of that should be productized across clients. By doing this, your clients will get the same output, but you don’t have to put in the same inputs. That difference between inputs and outputs is absolutely where you maximize your margins.

3. Automatically connect your digital.

   You need to connect the before, during, and after. If they’re not connected, it causes you—and your customer—a lot of extra work. You have to figure out what works and what doesn’t. So you have to make sure that everything is hyper-connected. It’ll save you time, which translates into realized profit.

4. Amplify the experience.

   You need to ensure that you’re amplifying the experience during and after every event or customer interaction. You need to make sure that the experience itself is shareable by creating content, photos, and videos. Everything should be socially-enabled from the start. This increases your margins because it’s not only inexpensive - but easy to do. A single entry level employee can manage the social experience with very little overhead. It’s also something you can bill with more favourable margins.

5. Capture real time data.

   It’s extremely important to get your data and metrics in real time. This allows for:

   • Better client result, and
   • Identifying problems and challenges before they start. In real time, you’ll see if segments in the digital sphere or even onsite aren’t working. By being able to see problems before they start you save yourself costly cleanup efforts by having to double up your staff, change the code or do any of those things that clients typically don’t want to pay for. To protect your margins, you really need to get those metrics in real time and stop problems before they become big ones.

By employing these five strategies together, experiential ad agencies can effectively protect and increase their digital margins.