SAN MATEO, California: Boutique social media agencies are "threatening the budgets" of more established rivals, a report has argued.
The Altimeter Group, the consultancy, surveyed 140 corporate social strategists representing firms with at least 1,000 staff, finding that organisations at the early stages of using services like Facebook and YouTube normally relied on traditional digital agencies, and posted an average annual spend of $51,000 (€38,898; £33,028).
By contrast, marketers tapping dedicated social media shops during this experimental period typically allocated just $31,000 to leveraging such properties.
Mainstream new media agencies are also generally afforded $162,000 in billings as activity becomes more "formalised", measured against $96,000 for their smaller counterparts.
As brand owners reach a "mature" or "advanced" level, the situation undergoes a substantial shift.
At this point, the resources made available to boutiques hits $238,000, compared with $87,000 for more established agencies.
According to the Altimeter Group, the rise of social specialists marks the next phase in the sector's evolution after a "fast consolidation" in the downturn.
The consultancy further suggested these new entrants are "threatening the budgets" of bigger competitors, if clients' behaviour to date continues.
"They often rely on traditional agencies for education (often a loss leader) research and strategy and implementation," Jeremiah Owyang, a partner at the Altimeter Group, said.
"Once corporations realise that social business is not about short term campaigns, they give dollars to boutique agencies."
The primary contributors to this trend include a lack of flexibility and in-depth knowledge about genuinely engaging consumers among some prominent networks, which "layer" social media on top of existing approaches.
"This is a great opportunity for the boutique agencies, who let the traditional agency do education, set plans in place, experience a few failures letting boutiques swoop in," Owyang added.
However, the fact these agencies are small means running multi-market or truly integrated marketing initiatives is largely not viable.
Moreover, major players like Edelman and Ogilvy are rapidly, and effectively, enhancing their capabilities in this area.
It can thus be expected many start-ups will attract the attention of holding companies keen to make acquisitions.
Greater collaboration between shops covering all disciplines, irrespective of whether they belong to the same company or act independently, should also increase.
Previous research from the Altimeter Group revealed social media "beginners" provide an average budget of $68,000 to the channel, rising to $1m among the "formalised" group and $1.4m concerning their "mature" peers.
Around 76% of companies now use social media for tracking brand metrics and 67% use it within the R&D process.
Meanwhile, 65% direct advertising and marketing expenditure to social media.
Data sourced from The Altimeter Group; additional content by Warc staff