Brands that neglect to ensure that their digital agencies are, at the very least, aware of the likely risks they face are complicit in exposing themselves and their stakeholders to a range of substantive risks which can be minimised, if not eliminated altogether. Unfortunately most of these digital agencies are ignoring this issue, possibly dismissing it altogether as irrelevant even though addressing these risks is actually pretty straightforward.
A digital agency's focus is, obviously, a brand's digital presence and impact. Most of the work being done today is consumer-oriented and there is a gradual shift to what many agencies are referring to as "social business" (I prefer "collaborative enterprise" - Mohammed Yunus defined "social business" as "a non-loss, non-dividend company designed to address a social objective within the highly regulated marketplace of today" which most digital agencies' clients are not) which places more emphasis on business to business engagement.
They have developed their services around customer engagement, content creation and publication, campaign development and planning as well as design and development in many cases.
Most of these digital agencies are "strategy-led" and place considerable emphasis on various strategic services which they render to their clients in order to address risks such as reputational harm, policy gaps and governance (often brand-related). This sounds like they are thinking carefully about a range of risks facing brands but, with few exceptions, their understanding of these risks is woefully limited because they lack a meaningful understanding of risks outside social engagement using social networks, content marketing and community management. What they are missing is significant. I recently wrote about digital agencies' strategy blindspot:
The result, unfortunately, is that digital strategists tend to ignore legal and compliance issues in their analysis, leaving their organisations and clients exposed to potential risks they don't understand and perhaps don't even realise exist. The law is complex and it becomes more and more complex each year due to new legislation (lately, increasingly poorly drafted legislation), new developments and trends and changing norms which require a lot of skill, experience and focus.
We live in a society that is structured using a dizzying array of laws and regulations. Those laws may be unfair, unjust or even applied poorly but law informs the underlying structure of virtually everything you do. You are probably not aware of most of it but it is there nonetheless.Case study
I read an interesting article in a recent issue of Fortune magazine titled "The proboscis files" which highlights this problem quite nicely. The article is about an American plastic surgeon, Steven M. Denenberg, who discovered that his before and after photos from nose jobs he had done were being used without his permission, literally worldwide.
He and his father (also his attorney) began suing other plastic surgeons and marketers who used Denenberg's photos in their marketing campaigns without his permission. The following paragraph caught my attention (I added emphasis):
Agencies may argue that it is up to their clients to handle the legal issues, not them. This may sound reasonable enough but when the agency is responsible for content creation and marketing, should it not be required to take reasonable care to source content it can legitimately use?
Going further, despite claiming to have strong expertise in strategy, most agencies fail to recognise potential risk, even in broad terms, take steps to assess the likelihood and potential severity of those risks and then factor those risks into their planning. Typically their approaches to these risks range from denying they exist to dismissing them as largely irrelevant to their work. The end result is usually the same: they leave their clients exposed.
It's debatable whether digital agencies are going to change their approaches to these risks and incorporate greater awareness and planning into their processes, and I have suggested that their business model is dying and they lack the vision to see this.
Rather than wait for their agencies to become more risk-aware, brands should take a critical look at the digital agencies handling their work and professing strategic expertise. They should insist that their agencies demonstrate a basic awareness of the risks they face, not just flowing from engagement online, but in more traditional respects as well, and be willing to address them meaningfully.
A good starting point is to determine whether these digital agencies have implemented some basic risk management frameworks of their own, such as website terms and conditions, privacy policies and services agreements with their clients (I picked 7 larger digital agencies that came to mind, only one has website terms and conditions).
If they can't take reasonable precautions to protect themselves from common risks, they likely won't do it for their clients either.
