Social Media Most Common Online Agency Service Offering

April 4, 2012

hubspot-top-agency-service-offerings-april2012.jpg83% of online marketing agencies offer social media marketing services, while an additional 7% plan to do so in the future, according to [download page] a HubSpot report released in April 2012. This is closely followed by the proportion who currently offer brand marketing, email marketing, and web design services (all at 81%), with SEO slightly behind, at 75%. Application development (such as mobile) gets the largest proportion of agencies saying they plan to offer this service in the future (25%), followed by video production (15%), media buying – digital (14%), affiliate marketing (14%), and marketing automation (13%).

The prevalence of social media services may be in response to industry spending patterns: according to the latest CMO Survey from Duke University’s Fuqua School of Business, although CMOs say that social media spending currently accounts for 7.4% of their total marketing budget, they forecast that share to increase 46% to 10.8% in the next 12 months, and to almost triple to 19.5% of total budgets in the next 5 years.

Web Services Prominent

Meanwhile, when the HubSpot survey respondents were asked what their agencies’ top 3 service offerings were, 3 of the top 5 services they cited were web-related. These were web design (15%), social media (12%), and SEO (11%). The other services making up the top 5 were brand marketing (14%) and full-service marketing outsourcing (11%).

Most Agencies Have Less Than 5 Employees

Data from the “State of the Online Marketing Services Industry” indicates that the industry is dominated by independent consultants (35%) and smaller-sized agencies of 2-5 employees (36%). In fact, less than 1 in 5 respondents said that their agency employed more than 10 full-time employees, including just 5% who said their agency employed more than 50 employees.

Content Creation to Become More Outsourced

The most common services outsourced by agencies to contractors are web development (51%) and design and creative (48%). Content creation, though, currently outsourced by 35% of agencies, sees the largest increase in planned contracted services, at 16% of agencies. A significant proportion of agencies also plan to contract out SEO, PPC, and social media in the future (each at 13%).

Overall, respondents reported contracting between 12% and 31% of their work (based on revenue), depending on their size.

Other Findings:

  • Two-thirds of the respondents said their agency has professionals dedicated to specific functions such as sales and copy writing.
  • 91% of agencies use software to deliver their services, with email marketing (73%), web analytics (71%), and social media (64%) the most popular.
  • More than 4 in 5 agencies recommend or resell software. Email tops this list (58%), followed by CMS (52%), web analytics (51%), and social media (46%).
  • Slightly more than one-third of agencies say that their entire revenue stream comes from B2B clients, while a further 29.5% say that approximately three-quarters of their revenue is B2B-based. By comparison just 6.1% report getting all of their revenue from B2C clients. Regardless of their revenue stream, agencies may need to improve their performance, suggests results from a DataXu survey from March 2012. Marketers responding to that survey were more than twice as likely to disagree than agree that their agency of record is effective in driving down the cost of customer acquisition (39% vs. 18%) or that their agency has played an important role in improving their digital marketing efforts (37% vs. 18%).

About the Data: The State of the Online Marketing Services Industry Report was conducted by HubSpot’s Partner Agency Team in the summer and fall of 2011. 750 survey responses were received.

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