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June 30, 2024
7 Min to read

Publishers Becoming Agencies: Is this Really The Right Path for Increasing Revenues?

Over the past several years publishers have started offering marketing services to a significant portion of their customers. This business model shift was heavily influenced by the Covid-19 pandemic, which resulted in a global decrease in advertising revenues. In this article we will examine the hidden forces behind this change, offer an in-depth analysis of what agencies do and recommend alternative solutions publishers can apply. Let’s dive in!

Christian Scherbel
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Why Publishers Adopt Agency Models?

Traditionally, publishers sell first-party inventory – that is, ad space in their own publications. Recently, they've begun offering services typically handled by marketing agencies, such as managing Google Ads, social media campaigns, SEO, and web development.

This shift is primarily driven by the need to address declining revenues from traditional sources, particularly in print. Coupled with the challenge of achieving competitive Cost Per Thousand Impressions (CPM), publishers are exploring becoming a one-stop solution for local advertisers, offering a comprehensive suite of services. This diversification appeals to major shareholders seeking alternatives to maximize stock value.

Types of Digital Marketing Agencies

Before evaluating this transformation, let's define digital marketing and explore agency scopes online. Digital marketing utilizes omnichannel tools to target, reach, and build lasting customer relationships. These efforts aim to prompt direct online purchases or valuable actions like form submissions, calls, or social media inquiries.

Online marketing generally falls into categories such as:

  • Content Marketing
  • Search Engine Optimization (SEO)
  • Google Ads (PPC)
  • Social Media Marketing
  • Email Marketing
  • Video Marketing

Now, let’s delve into popular agency types and their service offerings.

Full-Service Digital Marketing Agency

These agencies provide comprehensive A-to-Z online marketing solutions under one roof, spanning various digital channels. Dedicated teams ensure specialized expertise in specific marketing niches, offering clients a holistic approach with detailed analytics and performance analysis. By managing all communication channels, full-service agencies map out buyer journeys, identify successful paths, and allocate resources strategically for maximum impact.

SEO Agencies

Specializing in improving website visibility in search engine results, SEO agencies focus on three main areas:

  • On-site/On-page SEO: Creating relevant, high-quality content aligned with user search intent. Includes keyword research, optimizing title tags, meta descriptions, URLs, and internal page structures.
  • Off-site/Off-page SEO: Enhancing site reputation through external signals like backlinks from reputable sites, blogs, or influencers to boost authority.
  • Technical SEO: Improving website infrastructure for easier crawling, indexing, navigation, and user experience. Addresses site speed, mobile-friendliness, security, and error resolution.

Pay-Per-Click Agencies (PPC)

These agencies specialize in creating, managing, and optimizing ads on search engines like Google or Bing. Paid advertising ensures advertisers only pay per click, competing in real-time auctions for optimal ad placement. Agencies conduct extensive keyword research, AB test ad copy, and adjust bids to maximize client ROI.

Social Media Agencies

Focused on crafting, managing, and optimizing social media strategies, these agencies create textual, graphical, or video content for platforms like Facebook, Instagram, LinkedIn, and TikTok. They analyze audience behavior changes, plan content in advance, and continuously test new strategies to meet client goals.

Email Marketing Agencies

These agencies build, maintain, and segment large email lists based on client demographics, behaviors, and locations. They optimize email scheduling, subject lines, designs, and images to boost click-through rates and engagement. Agencies drive lead generation and customer engagement through strategic email campaigns.

The Downside of Publishers Becoming Agencies

Despite the benefits, publishers transitioning to agencies face challenges:

  • Selling Third-Party Inventory: Publishers expand to third-party ad space (e.g., Google Display Network), risking exposure to unpredictable traffic and revenue uncertainties from algorithm changes.
  • Recruitment and Global Appeal: Hiring top digital marketing talent is crucial but challenging, impacting agency competitiveness and client satisfaction.
  • Lower Margins & Profitability: Compared to direct sales, agency services often yield lower margins due to platform costs and labor intensiveness.
  • Agency Performance Reporting: Shifting from brand visibility to performance-based metrics can complicate client expectations and traditional revenue models.
  • Maintaining Publisher Identity: Balancing editorial integrity with agency services may dilute brand values, posing internal conflicts and cultural shifts.

What Can Publishers Do Instead?

  • Mergers and Acquisitions (M&A): Acquiring or merging with small agencies can fast-track digital capabilities and client base expansion.
  • Agency with Publisher Mindset: Integrating third-party inventory alongside traditional offerings while leveraging publisher authority and trust.
  • Segmenting Market Offerings: Tailoring agency services based on client size and needs to complement core publishing products.

Smartico Solution

At Smartico, we create bundled products combining traditional publishing with digital agency services. Our offerings include first-party inventory (e.g., display ads, SEO-optimized content), transforming print advertisers into successful digital marketers. We ensure higher engagement rates, increased CPMs, and effective ad campaigns suitable for any budget.

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