Tuesday, September 11, 2012

Post crisis agency relationship

The relationship between clients and analytical agencies has shifted. This is due to three reasons:
Abundance of data storage and computing power
Need to tighten budgets (especially post 2008)
Time to extract knowledge from agencies
Clients have learned that analysis is not rocket science anymore. They have brought a lot of capacity in-house. New technical solutions have made it possible to get around drawn out, bureaucratic IT projects. The focus has shifted from service to product.
Of the three reasons, the second one is most often neglected, but it means agencies need to prove their viability again and again.
The question is how agencies will respond. One answer can be syndication. By aggregating cross-client data they can create synergetic solutions which all parties can gain from.
Another answer is protection of intellectual property (IP). Previously it was assumed that algorithms cannot be copied because it takes too much time to reverse engineer. With more and more open source solutions, approaches can be borrowed quite easily. The output might not be the same but similar.
A third answer can be analytical talent. If agencies can secure the best talent (ie become more expensive – which goes against the tight budget issue), they could persuade clients to stick with them.

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