At the meshmarketing conference last October, one of the panels was how social media was tearing down the silos between advertising, public relations and digital agencies. Instead of operating in their own realms with little overlap, these different agencies are increasingly finding themselves in direct competition due to social media.
PR agencies, for example, now need to offer social media service, as well as digital content to create campaigns. Advertising agencies need to offer digital to complement their creative efforts, while digital agencies have to provide social media consulting to complement their development work. As a result, we are starting to seeing acquisitions and internal expansion to deal with the growing demands of clients who want one-stop shopping.
In the wake of this activity, it’s interesting to see the creation of Powered, a new 70-person social media agency that was created by combining three different agencies: Crayon, Drillteam Marketing and StepChange Group.
According to AdAge, Powered was created to “compete with digital agencies, public relations shops and an emerging crop of specialists to occupy the lead role in helping brands deal with social media.”
So, the obvious question is whether a “one-trick” pony agency such as Powered can effectively compete with PR, digital and advertising agencies that are driving towards offering a broader portfolio of services, including social media.
My sense is that for a social media agency to be viable, it obviously needs to offer excellent strategic and tactical services. That said, there will be pressure to expand into other areas such as digital to serve clients who don’t want to deal with one agency for consulting and then another agency to create the digital collateral needed to support their social media campaigns.
If Powered becomes successful and establishes itself as a social media powerhouse, it would not be at all surprising to see it snapped up by a digital, advertising or PR agency looking to quickly expand its capabilities – something that would no doubt please Powered’s investor, Austin Ventures.