Compared to the rest of the ad industry, digital agencies are sitting pretty. But that doesn't mean they're without concerns. Mainly, they're worried about skittish clients putting off big-ticket projects.
The Society of Digital Agencies concluded in its inaugural 2009 digital marketing outlook report that despite the terrible economic environment, digital shops expect to grow this year, albeit at steeply reduced rates compared to previous years. Overall, SoDA anticipates growth of about 8 percent.
SoDA found that just 10 percent of digital shops expect a decrease in digital projects. About 30 percent expect spending to remain roughly the same.
Traditional shops were even more bullish on their digital work, with nearly 70 percent expecting increases.
The bad news: clients are hesitant to commit to large projects even though such work is already part of annual budgets. The caution, according to Paul Lewis, director of operations for SoDA, stems from marketers fearing the economy's other shoe will drop and force even deeper cuts. Thus far, such cuts have mostly hit traditional ad spending.
In the meantime, digital agencies are making do by collecting smaller projects,
Lewis said. They're also slowing down on hiring -- and finding a greater pool of talent to choose from, he said.
Continue to next page →