Difference between digital marketing agency and advertising agency

Apr 3, 2022Marketing

We are all digital marketers whether we like to admit it or not. We all believe we can do things differently when it comes to marketing and advertising. On the one hand, we have people who are great at understanding what works and what doesn’t work and we have people who have a strong understanding of where the market is and how to position ourselves in the marketplace.

On the other hand, there are those who just don’t give a damn about these things and would rather sit around their desk scowling at their screen than actually think about what they might be doing better next time. For them, this is all meaningless “data analysis” that doesn’t really help them solve real problems.

Or, perhaps they are just plain bad at it and think nothing of wasting money.

That seems like an extreme example but it really can be true: some digital marketers just spend more time on this kind of thing than they do actually doing their jobs. They waste money by throwing money down the drain without getting any return on it, which is probably why most advertising agencies don’t bother with SEO anymore!

So, what do you need to know is What makes a good digital marketing agency? What does a good marketing agency do? And how should you choose one?

The Evolution of Marketing

There are several aspects of marketing that bear thinking about in order to move forward.

The first and most obvious is the difference between an advertising agency and a digital marketing agency.

A digital marketing agency is not an advertising agency, but an “advertising agency” in the sense that they are a company with a business model based on selling services to companies who want to use their products and services. They provide or attempt to provide, a wide range of services; from product design to PR, from testing to social media.

An advertising agency does not do this. They sell advertising products directly to companies (or at least do so for part of their business). This can be something like print ads or video spots. 

Digital Marketing and Traditional Advertising side by side

Can we have both Digital Marketing and Traditional Advertising aligned together? Of course, you can have both types in one company, for example, Adobe could have both its traditional ad agencies and its digital agencies. For many startups, however, this is not what matters most, that is what makes it a startup: the fact that you are trying to get customers without having established relationships with them (or at least without any relationship with them presently).

The next aspect of marketing that bears thinking about is how data affects every aspect of your business (which includes both content and people). A lot has been written recently about how data can be used as a weapon against companies. Sometimes it is used as such; other times it isn’t, take Facebook’s automation tools or Google’s auto-suggestions for instance, but certainly, there are advantages in being able to use data as a tool for either side of your business.

In the case of advertising, there isn’t much need for data because your product already functions far too well as it is. What you need data for is understanding people better than you do now so you can communicate more effectively with them so they will be more likely to tell others about it (proactively communicating value) and ultimately become repeat customers who will buy more from you in the future (retention).

The third major topic here is less tangible than the others but still important nonetheless: ROI (return on investment). This means going through every dollar spent on your product and determining if using it was worth it compared with similar options available at cheaper prices; if so then you should increase your ROI by adding more modes of investment.

The Digital Marketing Turnaround

Last week I had a chance to catch up with some friends of mine from the digital marketing industry. We discussed a range of topics from digital marketing agency vs. advertising agency to the importance of having an exit strategy for your startup.

Although digital marketing agencies exist, it is harder to manage one than it is for an advertising agency. Unlike agencies, which often have multiple divisions and departments, the core competencies at digital marketing agencies are usually understated. This means that they can be more strategic in terms of their approach to business development and product development (and therefore more valuable) than an advertising agency can be (which can be very tactical).

The most obvious reason for this difference is that an ad agency regards itself as a business that exists primarily to advertise products: but the main focus is on delivering those ads through traditional media channels (TV, radio, print). The role of the digital marketing agency is different and has more to do with developing relationships with brands and building long-term business relationships with clients through various channels such as social and mobile.

One way that differences between a digital marketing agency and an advertising agency are seen most clearly in their approaches to achieving ROI is through two different types of metrics:

  • Return on investment: how much money your company has made since you started your campaign
  • Return on sales: how much money your clients have made since they started using your product or service

Now both these metrics are important, but there are differences in how they should be measured and improved upon. Digital marketers often want their companies to achieve “retention”, meaning that as usage increases, usage stays constant or increases, even when things change around them (e.g., when you switch social networks on Facebook or Instagram).

This creates a situation where the ROI measures not just how much money you make from campaigns rolled out over time but also how often people come back after a campaign has run its course (which typically only happens if things remain stable). Return on sales should reflect that relationship between product usage and revenue; not just one-off revenue generated from campaigns rolled out over time. Ideally, this relationship would be smooth so that there was no volatility in any particular period; otherwise, it would be hard for marketers to measure what they were doing right next time around or identify areas where they could do better (e.g. email opt-ins vs brand mentions)

Social Media Marketing: Why It Matters

So you’ve heard about all the great success stories out there and about the people who are ahead of the curve. But what about the ones who are not? There are obviously a lot of reasons why people aren’t doing well, but in my experience, one of the most common is that they don’t understand how digital marketing works. So let me give you some context:

There are two fundamental pillars to marketing: 

1) Your product and 2) Your value proposition. 

In other words, we have to sell your product and convince our user why they should buy it. And that means you need to understand why your user is interested in your product and how it can help them (or value-add to their lives).

And that starts with understanding their needs and wants.

But unless you understand these needs, you don’t know what to offer them or how to communicate it effectively. It’s like a blind man walking down a hallway: he doesn’t know which way is up so he turns left instead of right. If you ask them what they want from your company, most of them will say something along the lines of “I want a better camera for my camera phone”, “I want a better design for my laptop” or “I want an app store for my tablet that lets me browse apps by category from anywhere I am in the world”. That’s perfectly fine and perfectly understandable, but none of those things can help us determine whether our users actually need those things or not.

In short: digital marketing doesn’t work like advertising because digital marketing, is only as effective as your understanding of the user’s needs, wants and desires; not as much as advertising because advertising works with everything else we do in life, so when we have that understanding, we can have it work with any number of different products/services.

How Marketers Are Using Social Media to Reach Consumers

Social media has changed the way marketers reach consumers and understand the customer. A few years ago, Facebook was the future and Google was an old friend; now, there are more than 300 million active users on Facebook and over 400 million on Google+ and Twitter.

But social media is still new to most companies, with a few exceptions. In order to understand how social media is changing the marketing landscape, it is important to understand how different digital marketing agencies (DMA) and advertising agencies (AA) market differently. They have different goals that lead to different strategies for social media because they use it at different rates:

If you are like most companies and you don’t know which approach to take or even why one would be better than another based on your own business goals, I will try to paint a picture of why each approach works in order to help you determine your strategy for yourself. 

For example: if you want to grow sales through organic search traffic or dynamic content creation or increase user engagement through community engagement with an influencer campaign or get more brand mentions through YouTube views or drive more user growth through email marketing, etc., then you should study some of the differences between DMA & AA approaches in order for you to choose one that suits your needs best. 

Advantages and Challenges of Digital Marketing Strategy

The digital marketing world has evolved in the past few years, and the term “digital marketing agency” has become more and more inclusive. In a nutshell, a digital marketing agency is a company that provides an end-to-end digital marketing strategy: not just Internet advertising but also search engine optimization, social media management, PR, email campaigns and so on. They do this in-house rather than using third-party agencies to do it for them.

The key difference between an advertising agency and a digital marketing agency is that the latter tends to be much more nimble and flexible than an advertising agency. An advertising agency is usually good for only one or two things at a particular time, when it comes to promoting their products or services, whereas with digital marketing agencies you can do many things at once (such as search engine optimization or social media promotion). In other words, you can make your product more accessible or promote it on different platforms at once.

“If you want to run your own business without having to worry about hiring additional staff or paying rent in a competitive market, I think that’s definitely worth looking into.”

David Thaler

Here are some specific points about starting up your own business:

  • You can choose what strategies work best for you (same as choosing what products to sell), instead of trying to figure out how well they sell by trying different strategies on different platforms (i.e., many approaches don’t work) 
  • You don’t have any employees 
  • You don’t have any expenses 
  • You don’t need agreements with employees 
  • The cost of running your business is low 
  • You are motivated by results 

The Differences Between Digital Marketing Agencies and Advertising Agencies

What is an ad agency?

An advertising agency is a company that is responsible for creating, managing and distributing advertisements in the media. Advertising agencies are often large, multi-division businesses with large budgets (and therefore high fixed costs) or they can be small, boutique-based shops that specialize in a single type of advertising (such as digital marketing agencies or social media agencies). In either case, their work generally involves using the media to promote products or services.

When it comes to digital marketing agencies vs. advertising agencies, there are some important distinctions. One difference between the two is how they use their budget: an ad agency will spend a fixed amount of money on each campaign (and therefore will only be able to create and manage one campaign per month), whereas a digital marketing agency will have more flexibility in its budget and can create different campaigns each month depending on the results it hopes to achieve from them. 

Another key difference is whether the work is delivered through direct mail or other forms of traditional advertising; digital marketing agencies tend to deliver more complex, highly targeted campaigns (which are much more effective) through web-based means, whereas traditional advertising agencies prefer direct mail and other forms of mass-market communication.

The general approach for all brands is essentially the same: put your message out there, communicate with your target audience and optimize for success with as little effort as possible by seeing who your audience really wants and understanding who they are (because what they want you to do will differ from what you want them to do). 

In many cases, this means figuring out how people respond when you give them certain kinds of messages, but in some cases it means figuring out how people respond when you don’t give them as per their expectations.

Advantages of Digital Marketing Agencies for Businesses

The opinion of this post is that there are four major advantages to having a digital marketing agency for your business.

1) They are cheaper than traditional advertising. 

You can use these agencies to reach out to customers without spending the time and money it would take you to do a traditional advertising campaign (and you can do this as many times as you want).

2) They are much more efficient. 

A digital marketing agency will target different users on different platforms at different times and in different ways (for example, they might send out an email of one type to the people who are reading the blog but not buying shoes but send out an email of another type on a more important day when they’re more likely to be reading the blog.) This means your ads will be far more targeted, far better targeted and far less expensive than ones that fall flat.

3) They get results faster. 

For example, a fraction of an ad spend can make or break your business in terms of sales or customer loyalty. Digital marketing agencies will deliver results much faster than traditional advertising agencies because they manage all data from start to finish with real-time analytics and reporting solutions like Google Analytics or Chartbeat. 

4) They facilitate lead generation for your business 

They help you grow your business by assisting in finding leads, acquiring new customers and building relationships with existing ones. You could be using the same digital marketing agency for both types of work (marketing and sales), but we’ll often recommend that you hire them just for marketing because they’re so much cheaper than traditional advertising. Where traditional agencies might cost $10 on average per lead, digital agencies might charge under $1 per lead ($7/lead if you pay them daily).

A digital marketing agency usually handles things like social media, video and email (and sometimes even email autoresponders). This allows them to target an audience with a specific interest or problem. Often this is done through a variety of channels, including but not limited to search and other online platforms such as Google AdWords and Facebook Advertising.

Difference between digital marketing agency and advertising agency – Conclusion

This post has discussed in good detail, the difference between a digital media agency and an advertising agency

A traditional advertising agency represents the advertiser who is trying to sell something, such as a product or service, to an audience. They do this by creating advertising that tells people what it is about the product or service and how people will be able to use it. For example, they might create TV commercials with actors talking about what the product does, how great it is, and how people can get one.

Digital media agencies represent the advertiser’s digital marketing team (the agencies themselves are called “digital media agencies” because they deal with digital). They do this by creating ads that tell people things like the brand’s history of innovation, what other brands do well in their industry, etc., and how people can use that brand. For example, they might create TV commercials with celebrities talking about what the brand does and how to use it.


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