1 Introduction

The development of digital technologies and the resulting changes in the competitive and consumer landscape have compelled companies to undertake relevant digital transformation (DT) processes (Verhoef et al., 2021; Vial, 2019; Warner & Wäger, 2019). DT has been defined as “the use of new digital technologies, such as mobile, artificial intelligence, cloud, blockchain and the Internet of Things technologies, to enable major business improvements to augment customer experience, streamline operations, or create new business models” (Warner & Wäger, 2019, p. 326).

Authors agree that DT concerns not only technological innovation but also, above all, a strategic imperative for incumbents (Scuotto et al., 2017; Sebastian et al., 2017; Warner & Wäger, 2019). Since one of the primary outcomes of this process is the evolution of business models (BMs), a complete understanding of digital transformation cannot be separated from an analysis of the changes to BMs (Li, 2020; Sebastian et al., 2017).

As shown by Caputo et al. (2021), in 2010–2019, there was increased attention to the topic of BM evolution due to DT. However, some authors have noted that this topic is still poorly understood (Hausberg et al., 2019; Li, 2020; Rachinger et al., 2019). In the research stream on DT and BM evolution, there have been numerous contributions investigating the impact that digital technologies (considered generically) have had on one or two of the three fundamental BM dimensions, namely, value proposition, value capture, and value creation (Richardson, 2008; Teece, 2018); these studies focus mainly on the last dimension of value creation. Other contributions have described the impact of one specific digital technology (e.g., big data, social media, artificial intelligence) on one or two BM dimensions (Akhtar et al., 2018; Erevelles et al., 2016; Muninger et al., 2019). Moreover, the literature has deepened the understanding of BM innovation drivers (e.g., digital technologies, either in general or in specific, or changes in competitive landscape) to identify the consequent BM evolutionary paths and their different intensities (Saebi et al., 2017; Westerman et al., 2014), without examining the specific effect of these drivers on the different BM dimensions.

Within the studies that delve into the impact of digital technologies on BM evolution, no holistic analysis has yet investigated which technologies are considered to have the most significant impact on the three dimensions. Moreover, there are neither studies on how these three dimensions change simultaneously because of these technologies, nor, last, what the consequent evolutionary paths of incumbents are.

Addressing this gap seems particularly relevant for comprehensively representing the effects of DT on BM. This approach allows us to overcome the vagueness of some studies that mention "digital technologies" in general terms or, at the other extreme, consider only one specific innovation. The evolutionary dynamics of all three BM dimensions should be explored because specific digital technologies impact the evolutionary paths of the BM, and a holistic representation can consider the specific technological drivers, their impacts on the three BM dimensions and, finally, the ways and intensities of change in these three dimensions.

To bridge these gaps, our paper investigates 1) which digital technologies are considered to have the most relevant impact on the three BM dimensions and 2) the consequent evolution of these BM dimensions. This study thus deepens the understanding of both how dimensions have changed and the intensities of their evolution.

To achieve this goal, we delve into a specific context, the advertising industry, and, within this context, the evolution of BMs in traditional communication agencies, i.e., creative and media agencies launched before the digital revolution (Vernuccio & Ceccotti, 2015). The advertising industry is important to investigate for several reasons. First, it is an economically significant industry. MarketLine (2022) estimates that the global advertising industry in 2021 had a value of $695.7 billion, which is expected to increase by 26.3% by 2026. Moreover, further in-depth analysis in this area seems to be particularly relevant because, as stated by some scholars (Lee & Cho, 2020; Li, 2020; Loonam et al., 2018) and by the World Economic Forum (2018), the advertising industry has been significantly transformed by digital technologies, such as digital and social media, big data, machine learning, AI, and digital platform-based ecosystems (Cozzolino et al., 2021). Furthermore, in this sector, all the disruptions caused by digital technologies are evident (Verhoef et al., 2021; Vial, 2019; Warner & Wäger, 2019), namely, changes in consumer behavior and expectations and the evolution of the competitive landscape (Vernuccio & Ceccotti, 2015; Windels & Stuhlfaut, 2018; Ceccotti & Vernuccio, 2021). In this “ever-changing environment” (Childers et al., 2018, p. 259), traditional agencies—both creative and media—are under enormous pressure: several academic (Hughes & Vafeas, 2019; Lynch, 2019; Mallia & Windels, 2011; Patwardhan et al., 2019) and managerial (Hipperson, 2012; Leahy, 2018; Lee, 2019) studies have emphasized that traditional agencies must engage DT to survive in the new communication environment.

For these reasons, the advertising industry represents an important context for examining BM evolution in response to digital technologies and, therefore, acquiring a holistic view of changing incumbents.

Accordingly, the purpose of the study is addressed by focusing specifically on traditional communication agencies, deepening the understanding of which digital technologies impact specific dimensions of their BMs and how these dimensions consequently change. In doing so, we can achieve a holistic reading of the evolutionary paths of the BM in terms of the ways and intensities of change in the three BM dimensions of creative and media agencies.

Adopting a qualitative approach based on in-depth interviews, we investigate the perceptions of BM evolution from professionals belonging to different communication network nodes (Grant & McLeod, 2007; Vernuccio & Ceccotti, 2015).

This paper is intended to be positioned within the strand of research on DT and BM evolution; it investigates, for the first time, traditional players in the advertising industry, which is being uniquely transformed by digital technologies. Adopting a broad perspective (simultaneously considering the three BM dimensions) and, at the same time, a deep perspective (investigating the impact of the technologies considered the most relevant to this change and the consequent evolution of the three BM dimensions) leads to an original interpretation of the changes among traditional communications players. This paper thus enriches the literature on DT and BM evolution while offering several relevant managerial implications, including identifying the most relevant challenges that incumbents still face in their DT processes.

The paper is structured as follows. Following a review of previous studies on DT and BMs (Sect. 2.1) and the introduction of our context of analysis (i.e., the advertising industry and traditional communication agencies) (Sect. 2.2), we present the purpose of the study (Sect. 2.3) and the methodology (Sect. 3). The main results (Sect. 4) and conclusions (Sect. 5) are presented in the subsequent sections.

2 Theoretical background and purpose of the study

2.1 Digital transformation and business model evolution

The advent of SMACIT (i.e., social, mobile, analytics, cloud, and Internet of Things) (Sebastian et al., 2017; Vial, 2019), AI (Sjödin et al., 2021), predictive analytics, and the development of platforms and ecosystems (Alaimo et al., 2019; Cozzolino et al., 2021; Veile et al., 2022) are posing new strategic and organizational challenges to incumbent firms, i.e., those companies that were launched and achieved their success in the predigital economy (Loonam et al., 2018; Verhoef et al., 2021; Vial, 2019). According to some recent studies, the use of digital technologies is driving significant disruptions related to profound changes in the competitive landscape and the evolution of consumer behaviour and expectations (Vial, 2019; Verhoef et al., 2021; Warner &Wäger, 2019). Moreover, digital technologies enable an essential process of change in companies, namely the DT process, which is necessary not only to address the disruptions mentioned above but also to obtain the benefits of using technologies in terms of improved efficiency and productivity, cost optimization, and process speed (Hausberg et al., 2019; Rachinger et al., 2019; Vial, 2019). Within the DT literature, studies that specifically investigate the impact of this process on the BM of incumbents are becoming increasingly important (Li, 2020; Warner & Wäger, 2019). BM is a useful unit of analysis because it “describes an architecture for how a firm creates and delivers value to customers and the mechanism employed to capture a share of that value” (Teece, 2018, p. 40). Therefore, the BM allows us to more completely represent the whole DT, involving all three dimensions, i.e., value proposition, value creation and value capture (Hess et al., 2016; Li, 2020; Loonam et al., 2018). Following Richardson's strategic framework (2008), each dimension can be articulated in terms of several components (Fig. 1) as follows:

  1. 1.

    Value proposition includes the offering, the target customer, and the competitive strategy.

  2. 2.

    Value creation comprises resources and capabilities, organizational structure, processes, and relationships with suppliers/partners and customers.

  3. 3.

    Value capture incorporates the sources of revenue and the cost structure.

Fig. 1
figure 1

Source: Our elaboration, following Richardson (2008)

BM dimensions and components.

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Using this framework, it is possible to summarize in Table 1 (below) the main contributions of research on DT and BM, highlighting the drivers of change, the resulting changes in the three dimensions and components of BMs, and the evolutionary paths of BMs outlined by different authors.

Table 1 DT and BM evolution studies: a synthesis
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Concerning the drivers of change, most contributions have examined the impact of digital technologies when considered in general terms (Gilli et al., 2023; Li, 2020; Rachinger et al., 2019). In other cases, authors have examined the impact of several specific digital technologies, such as big data (Loebbecke & Picot, 2015; Everelles et al., 2016), social media (Muninger et al., 2019), AI (Sjödin et al., 2021), and the Internet of Things (Akhtar et al., 2018). Among the other drivers of change resulting from the digital technology revolution, scholars cite aspects related to the evolution of the competitive environment from new entrants (Saebi et al., 2017; Cozzolino et al., 2021; Verohef et al., 2021), as well as profound consumer changes (e.g., Vial, 2019; Warner & Wäger, 2019).

Regarding BM evolution, we should note that most of the relevant contributions focus on only one dimension of the BM, namely, value creation, with specific reference to the following components:

  1. (a)

    Resources and capabilities: the need for digital assets, such as hardware or software for data storage, AI, machine learning, and robotics (Verhoef et al., 2021); new skills and new roles; the development of dynamic capabilities and digital agility (Gilli et al., 2023; Hess et al., 2016; Matarazzo et al., 2021; Muninger et al., 2019; Verhoef et al., 2021; Vial, 2019; Warner & Wäger, 2019); the development of a new culture oriented toward risk, experimentation and collaboration (Vial, 2019; Warner & Wäger, 2019); and the evolution of leadership (Porfirio et al., 2021).

  2. (b)

    Processes: automation of activities and increased speed of operations (Loebbecke & Picot, 2015; Vial, 2019).

  3. (c)

    Organizational structure: need for relevant changes (Verhoef et al., 2021; Vial, 2019) to guarantee strategic agility (Verhoef et al., 2021).

  4. (d)

    Relationships with suppliers and partners: these relations highlight the growing importance of a network (Pagani & Pardo, 2017; Alberti-Alhtaybat et., 2019).

Only a few studies have highlighted the impact of digital technologies on changing value propositions (Loonam et al., 2018; Piepponen et al., 2022; Sebastian et al., 2017; Vial, 2019): the use of technology enables new services to be offered and firms to expand their scope of activity. Even the dimension of value capture appears to have been little explored in the literature: contributions have focused mainly on reducing costs and identifying new sources of revenue (Ferreira et al., 2019; Hess et al., 2016).

As shown in Table 1, several authors have outlined different evolutionary paths due to DT, which are characterized by an increasing impact of digital technologies and, consequently, different intensities of change. A process of BM adaptation usually occurs when the impact is low and when the pressure to change is mainly external (Saebi et al., 2017). In this situation, firms using technologies begin to optimize processes, particularly in terms of cost optimization (Rachinger et al., 2019).

As the intensity of the impact of technologies on the BM increases, we find two different evolutionary paths: extension and automation (Li, 2020). In the first case, the company uses digital technologies to extend activities and processes without replacing the previous business activities. In the case of automation, the company, through digital technologies, automates these activities and processes. Usually, even at the automation stage, there is no complete replacement of nondigital models, but companies adopt BM innovations with hybrid BMs (Endres et al., 2020).

At a later stage, BM transformation, digital technologies are used to design new models that entirely replace the previous ones. These new BMs might be new only to the company but not to competitors or, in the most disruptive cases, could even lead to the reinvention of entire industries (Warner & Wäger, 2019; Westerman et al., 2014).

As Table 1 shows, in the strand of studies on DT and BM evolution, there is a lack of holistic readings that comprehensively analyze the specific digital technologies considered to have the most significant impact on the three dimensions of the BM and the consequent joint effects of these technologies on value proposition, value creation and value capture, delineating the evolutionary paths of the BM. Such a holistic reading could be helpful in interpreting different BM dynamics, shedding light on the different paths and intensities of change in the three BM dimensions.

2.2 Advertising industry and traditional communication agencies

To achieve our purpose, we have chosen a specific context of analysis, namely, the advertising industry, to investigate the evolution of traditional communication agencies, i.e., creative and media agencies that were born and developed before the digital revolution.

This sector is economically important (see Sect. 1, MarketLine, 2022) and has not been explored in depth in previous contributions on DT and BM evolution; these studies have focused mainly on other industries, such as logistics (Alberti-Alhtaybat et al., 2019), health care (Kraus et al., 2021) or banking (Sund et al., 2021). In the literature, there is thus potential interest in investigating the advertising industry. Indeed, several previous contributions have examined the evolution of BMs in a field very close to advertising, i.e., the media industry (Piepponen et al., 2022; Rachinger et al., 2019) or the digital platform-based ecosystem in the advertising industry (Cozzolino et al., 2021), albeit without focusing on the evolutionary paths of traditional communication agencies. Furthermore, as highlighted by Li (2020), creative sectors, including the advertising industry, are experiencing significant transformations due to digital technologies.

The profound change in marketing communication is mainly due to the development of the internet (Behboudi et al., 2012; Rodgers & Chen, 2002), interactive digital media (Mallia & Windels, 2011), mobile and social media (Wagler, 2013; Windels & Stuhlfaut, 2018), big data and AI (Chen et al., 2019; Qin & Jiang, 2019). In the new communication scenario, complexity has grown because of media proliferation and increasing consumer protagonism in the cocreation of brand discourses (Batra & Keller, 2016; Vernuccio & Ceccotti, 2015). The speed of communication has increased, and the interaction time with digital media and the production of enormous amounts of data that make consumer behaviour measurable (even in real time) has become increasingly shorter (Windels & Stuhlfaut, 2018). Due to the rise of social media, we are witnessing the coexistence of the push–pull and social communication models (Bruhn & Schnebelen, 2017; Vernuccio et al., 2021), as data takes a central role in supporting decisions (Porto & de Abreu, 2019; Qin & Jiang, 2019) and boundaries between communication tools and media are gradually blurred. These phenomena have radically changed the demands of firms (clients), which are increasingly asking communication agencies for speed, flexibility, and efficiency (Cheong et al., 2016; Hughes & Vafeas, 2019; Lynch, 2019). Moreover, the competitive landscape has also drastically changed due to the proliferation of several specialized digital agencies (Ceccotti & Vernuccio, 2021; Hughes & Vafeas, 2019; Windels & Stuhlfaut, 2018) and, more recently, the entry of management consulting firms into the market (Patwardhan et al., 2019). Finally, in recent years, there has been a growing tendency for advertisers to partially internalize communication activities, e.g., to develop digital planning (Hughes & Vafeas, 2019; Porto & de Abreu, 2019).

In this context, the need emerges for a profound rethinking of the role of traditional agencies in the new communications environment (Patwardhan et al., 2019): as stated by Lynch (2019), “advertising agencies need to catch up and transform their business models” (p. 847).

2.3 Purpose of the study

Considering the gap identified in the research on DT and BM evolution (Sect. 2.1), the aim of this paper is to understand which digital technologies have the most significant impact on the different dimensions of the BM and how these three dimensions change accordingly. Hence, it will become possible to delineate different evolutionary dynamics, interpreting the ways and intensities of change in BM dimensions.

Given the context of the advertising industry for investigating the impact of DT on incumbents' BMs (Sect. 2.2), this paper investigates the following:

  1. 1.

    Which specific digital technologies are considered to have the most relevant impact on the three dimensions of traditional creative and media agency BMs?

  2. 2.

    What are the themes and intensities of change in the dimensions and components of the BM (see Fig. 1) of traditional creative and media agencies, and do they change simultaneously due to these technologies?

By adopting this holistic perspective, we can delineate the different evolutionary paths of traditional communication agencies with specific reference to the ways and intensities of change in the three dimensions of creative and media agency BMs.

3 Methodology

To achieve this goal, we adopted a qualitative research design based on in-depth interviews (Creswell, 1998). This choice was related mainly to the objective of examining “how” the main dimensions and components of the business model are changing in traditional agencies (Matarazzo et al., 2021; Muninger et al., 2019; Warner & Wager, 2019), thus obtaining a holistic view of their evolution.

3.1 Sampling and informants

A total of 38 in-depth interviews with communication experts were conducted. The respondents belonged to organizations located in Italy and operating internationally. The choice of country was made for three reasons. First, Italy has a variety of players, such as branches of agencies belonging to global advertising networks (i.e., Omnicom Group, WPP, Interpublic, Havas, and Publicis Group), as well as independent agencies with long histories and high international vocations. Second, Italy is ranked fifth in the European advertising industry (MarketLine, 2022) and in digital ad spending, with a media mix balanced between TV and digital investments (Iab Europe, 2021). Third, an Italian sample allowed us to use existing contacts and to involve managers more easily in interviews.

In the present study, a broad perspective of inquiry was adopted involving different players in the communication network (Vernuccio & Ceccotti, 2015) belonging to three categories (Table 2):

  • Traditional agencies, both creative (n = 14) and media (n = 8), to examine perceptions and opinions about the changing BM components of their respective categories;

  • Advertisers (n = 8), to identify their vision of the change in the BMs in traditional agencies as users of the communication services offered by these players; and

  • Trade associations of advertisers and agencies (n = 8), to understand their perspectives on change as observers of the marketing communication services market.

Specifically, traditional agencies all belong to global advertising networks, except for two large independent creative agencies, which also have international clients. The advertisers are all large B-to-C companies, mainly multinational and from different sectors (i.e., consumer services, consumer packaged goods, consumer durables, apparel, and healthcare). Finally, trade associations are the most important at the national level and represent the main nodes of the network (i.e., advertisers, agencies, professionals); one of these is the Italian branch of an international network.

In line with studies emphasizing the key role of top management in the DT of firms (Hess et al., 2016; Patwardhan et al., 2019), the key informant approach (Robson & Foster, 1989) was adopted to capture senior leaders’ perspectives (Warner & Wäger, 2019).

Therefore, in traditional agencies, only individuals with an apical role (e.g., CEO, president, partner, managing director) were selected, whereas for advertisers and associations, senior managers with established marketing communication experience were interviewed (e.g., CMO, general manager).

The criterion of theoretical saturation was adopted to determine the sample size: the survey phase was closed only when the contribution of new interviews did not bring new knowledge to achieve the set objective (Corbin & Strauss, 2014; Francis et al., 2010).

The respondents were predominantly men (29 vs. 9 women), had an average of 24 years of professional experience, and had worked in an average of four different organizations during their careers. Interviewees with international experience were involved in having a broader representation that could be related not exclusively to Italian agencies (Table 2).

Table 2 Study informants (n = 38)
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3.2 Data collection

In designing the interview guide, broad descriptive questions were first used to gather the interviewees’ views of the changes and to introduce the subject of the interview. Then, questions were formulated to investigate the most relevant technologies and consequent changes in the three main dimensions of the BM (value proposition, value creation and value capture). For each dimension, the components highlighted in Richardson’s (2008) framework are referred to above (cf. Figure 1) (for the interview guide, see the appendix). The authors partially adapted the interview guide to consider the different perspectives of the agencies and the other two categories of respondents. The interviewees were asked to respond by considering both the evolution of their agency and the best practices that they observed internationally. The interviewers encouraged the respondents to offer examples to better describe the themes of change. The interviews were conducted via Meet or Zoom and ranged in length from 45 to 90 min.

3.3 Data analysis

The interviews were recorded, fully transcribed, and analyzed through thematic content analysis (King & Horrocks, 2010), which allowed for the identification of both the technologies considered most relevant in the evolution of BM dimensions and components and of relevant themes for each of the three dimensions of the BM.

For thematic content analysis, we adopted the following protocol (King & Horrocks, 2010):

  1. 1.

    The text was analyzed line by line and segmented into smaller parts consisting of one or more sentences that were associated with the specific “descriptive codes” that comprise the themes at a high level of detail.

  2. 2.

    Based on the descriptive codes, logical abstraction led first to the identification of “interpretative themes”.

  3. 3.

    Continuing to abstract and merge themes, the researchers aggregated interpretative themes to the “overarching themes,” representing the highest level of generalization.

Concerning the research objectives (Sect. 2.3), two different patterns for coding were identified, as shown in the following table (Table 3), which shows some examples (i.e., verbatim) for understanding the abstraction process.

Table 3 Coding examples
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Regarding the first research objective (Table 3a), the descriptive codes are related to the specific digital technologies underlying a change (e.g., artificial intelligence); the interpretative themes, on the other hand, can be traced to the components of the BM (e.g., offering) impacted by the technologies. For the second research objective (Table 3b), descriptive codes are drawn from fragments of text that describe a change. These fragments are assigned a label that, at a higher level of abstraction, flows, sometimes together with other descriptive codes, into an interpretive theme. The latter is represented by the specific change themes associated with BM components (e.g., “widening the scope of activities”—processes). For both research objectives, the more abstract themes (“overarching themes”) coincided with the three focal BM dimensions, i.e., value proposition, value creation and value capture (cf. Figure 1).

To enhance the trustworthiness of our study, two members of the research team conducted the coding process separately and compared their results after each coding phase. As suggested by King and Horroks (2010), this choice is appropriate because the members of the research team possess greater contextual knowledge of the data, which was useful in developing a comprehensive and in-depth discussion of the definitions and articulation of the codes. To strengthen the reliability of the results, "code confirming", which involved two independent coders who were experts on the subjects under investigation, was used. The percentage of agreement of the coders was 89%, which is higher than the minimum level foreseen (Powell, 2007). Finally, the results were submitted for reading by four of the respondents, who substantially agreed and validated them (Lincoln & Guba, 1985).

4 Results

4.1 The impact of digital technologies on BM components and dimensions

Based on the interviewees' answers, it was initially possible to determine which digital technologies are perceived to have the most significant impact on the BM components and dimensions in the creative and media agencies (Fig. 2). The analysis showed that all the different components of the BM (i.e., interpretative themes) were impacted by technologies, leading to a change in all three dimensions (i.e., overarching themes).

Fig. 2
figure 2

Creative and media agencies: The impact of digital technologies* on BM components and dimensions. *In order of importance, from the most relevant to the least relevant, for each type of agency

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The impact of technologies differs for the two types of incumbents, namely, traditional creative agencies (Sect. 4.1.1) and traditional media (Sect. 4.1.2) agencies.

4.1.1 The most relevant technologies for BM evolution in creative agencies

Social media, analytics, and big data are the technologies that have had the most significant impact on the BM evolution in creative agencies. These technologies change the value proposition (the offering and the target customer) and, most importantly, value creation. Indeed, resources and capabilities as well as organizational structures and processes are impacted. Concerning relationships, while social media impacts those with customers, analytics, and big data affect those with partners, who, as we shall see below, are the source of external skills that agencies acquire to amend internal deficiencies. The use of social media and big data in the offering also changes the dimension of value capture, as these technologies allow agencies to broaden their revenue sources.

Cloud-based management software (e.g., Salesforce or Oracle solutions) and collaboration apps (e.g., Microsoft Teams or Miro) are relevant technologies within a creative agency. They impact the value capture dimension by enabling cost reduction and efficiency enhancement. Moreover, they impact value creation since they make process optimization possible. However, they do not significantly impact relationships with partners and clients.

Finally, artificial intelligence and virtual reality are other technologies that change the value proposition (particularly the offering). However, as seen in their effect on value creation (i.e., relationships with external suppliers), these technologies are not developed internally by an agency but externally by its specialized partners. They also allow changes in value capture, as an agency can expand its revenue sources.

4.1.2 The most relevant technologies for BM evolution in media agencies

At the heart of the profound changes in media agencies are digital platforms (e.g., demand-side platforms, supply-side platforms, creative optimization platforms), analytics and big data, and AI (machine learning). These technologies have a consistent impact primarily on the value proposition (both on the offering and on the competitive strategy). With expertise in these technologies, media agencies today can describe themselves to clients as strategic consultants. These technologies also generate relevant effects in value creation on resources and capabilities (developed internally and constantly updated), organizational structure, processes, relationships with partners and, finally, relationships with customers. The impact also affects value capture, as these technologies affect revenue sources (by expanding them) and have a substantial effect on the cost structure because technology requires significant investments.

Social media also has a moderate impact on the BM of media agencies, especially the value creation dimension.

Finally, as also highlighted for creative agencies, collaboration apps and cloud-based management software are relevant in the evolution of media agencies. In contrast to the findings for creative agencies, where such technologies seem more aimed at process optimization and efficiency improvement, for media agencies, these technologies can impact offerings and, as a result, client relationships, in terms of increased collaboration and speed.

4.2 The evolution of the business model

Based on the interviewees' answers, the most relevant aspects of the BM evolution in creative and media agencies were outlined in terms of their DT paths. A framework has been developed (Fig. 3) to provide a holistic view of the themes of change in the different BM components (i.e., interpretative themes) that digital technologies have impacted. These technologies led to an evolution of all three BM dimensions (i.e., overarching themes) in creative and media agencies.

Fig. 3
figure 3

The evolution of creative and media agency business models

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At the end of the qualitative content analysis, 31 macro-themes were identified: 14 exclusively for creative agencies, 11 solely for media agencies, and 6 themes common to both agency types. However, the set of common themes assumed different meanings for the two categories of players. Therefore, they are described in detail in the following paragraphs dedicated to the evolution of the BM in the creative agency (Sect. 4.2.1) and in the media agency (Sect. 4.2.2).

4.2.1 The evolution of the creative agency business model

Creative agencies have invested in radical changes in BMs due to the digital revolution. Several interviewees, especially among advertisers and trade associations, highlighted the “emergent and often merely reactive nature” of the DT in this type of agency. In fact, some respondents from creative agencies mentioned that their DT is an ineluctable process of “adaptation”:

“We have all more or less adapted to the new technologies; those who have not adapted have died a natural death” (Managing Director, creative agency).

As highlighted in Sect. 4.1.1, social media, analytics and big data, virtual reality and AI have changed creative agencies' value proposition. Collaboration apps and cloud-based management software have significantly impacted value creation and value capture.

4.2.1.1 Value proposition

According to many respondents, in the face of media fragmentation, creative agencies should offer clients strategic brand consultancy, providing support in developing communication strategies that can be coherently deployed across different touchpoints.

Moreover, many respondents reiterated the central role of the big idea, which has always been a distinctive offering of creative agencies compared with other categories of agencies operating in the marketing communication services market. However, different from the past, the big idea must be digital first; it must be delineated before the brand's digital presence and then adapted to different media channels.

In addition, creativity is increasingly tech-based: a creative idea must hybridize with technology since the elaboration of the creative concept.

“Today, our creative ideas are based on virtual and augmented reality, algorithms to personalize products and packaging, chatbots or even NFTs” (CEO, creative agency).

Moreover, another profound change in creativity emerged from the interviewees' answers: in the past, the production of creative stimuli was concentrated at certain times of the year (i.e., the campaign launch), and the useful life of a creative concept was rather long. Today, due to the massive spread of social media, creativity is always on and continuously produced by agencies to meet the speed of digital media. Creative agencies must work daily to ensure interaction between the brand and consumers, creating content that can both support positioning and develop engagement.

In addition, many respondents emphasized that creativity is increasingly data driven. In the past, the development of creativity was based on “small data”, i.e., qualitative analysis of consumer insights; increasingly today, creativity is also based on big data and analytics that enable accurate descriptions of targets and personas. Understanding such data is becoming increasingly possible thanks to the development of platforms that represent data visually. Creative agencies are also beginning to work on creativity optimization to reach users with relevant content at different stages of the customer journey. This activity is still in its infancy, and it is often possible through partnerships with specialized players inside or outside advertising networks (cf. value creation and value capture sections).

While the strategic value of brand consultancy must be increased, there is also a growing performance orientation in the campaign: agency initiatives should lead to measurable results for the client.

“The days of agencies selling creative ideas to clients based on promised results that were difficult to measure are over. Today, creative agencies are beginning to comprehend that their campaigns must lead to concrete results” (CMO, advertiser).

Like media agencies, the theme of the progressive widening of the scope of activities emerges. Moreover, when offering strategic brand consultancy, creative agencies should extend their offerings by integrating different digital services (e.g., influencer marketing, social media marketing, and branded content) to guarantee a complete response to clients’ needs.

Widening the scope of activities is related to strategic reasons and the need to find new business opportunities in the presence of smaller clients' budgets and increasing competition from digital agencies. The same need causes creative agencies to seek new customer targets. In the past, large agencies had large advertisers as their primary target market; currently, these agencies increasingly target small/medium-sized companies that do not play a strategic role in the client portfolio but rather enable them to cover costs (cf. value capture section).

4.2.1.2 Value creation

In the field of value creation, a first theme that emerged from the interviewees’ answers was downsizing structure: creative agencies are conducting major dimensional reductions. This issue is related not only to the use of digital technologies but also to the pressures resulting from increased competition within the market for communication services.

In addition, there is a remarkable flattening of the structure. Several respondents emphasized that creative directors have progressively lost their “monopoly” and, therefore, their power within the agency. The observed trend is toward more widespread creativity between the different departments, transversal expertise, and more horizontal structures than in the past. This change is also necessary to respect the new rhythms of creativity outlined above, which are not compatible with long and complicated hierarchical approval processes.

Indeed, the new timescale of always-on creativity requires faster and more efficient processes; the time between the brief and the release of the content on air increasingly shortens. Therefore, shorter analysis, decision and realization times are needed to continuously respond to clients’ requests. This change is possible through collaboration platforms (e.g., Microsoft Teams or Miro) and internal cloud storage tools, which enable quick access to documents and joint work on creative proposals and presentations.

Another recurring theme in the respondents’ answers is the need for new skills and professional figures. Experts with digital technical skills were gradually introduced into the agency, and in some (rarer) cases, existing staff were trained. Many respondents noted that the agency could not have all the skills for digital specializations in house, but it should have at least one professional figure (such as the Chief Technology Officer or the Head of Digital) who could choose (and interface with) the most appropriate technological partners. To manage processes more efficiently, some agencies introduced the project manager, who, compared with the account manager, is better able to control team productivity and manage the complexity and speed of campaigns, especially digital campaigns. The project manager can also handle interpretive problems between professionals with different specializations.

Indeed, coordinating traditional and digital figures in a creative agency remains a relevant organizational challenge. The interviewees emphasized a variety of models that range from the complete separation of “traditional” and digital teams, which are called upon by the creative team when necessary, to situations in which mixed teams are used from the idea generation phase. The latter solution appears to be the best because of the new role played by technology in the activation of the creative process, as highlighted in the value proposition section.

“We used to start from the idea and check its technological feasibility by going outside or to more 'technological' teams… so we would come to dead ends because maybe that creative idea required a technological innovation that had a completely different time to market from the campaign to be developed. However, when the technology is within the agency and the team, it is part of the know-how that is mixed with the creative know-how and, therefore, can be a kick-starter for creativity… a source of insight, an activator” (CEO, creative agency).

In addition, due to the downsizing of the structure, agencies often enter business partnerships in search of flexibility, initiating project-based collaborations best suited to meet client needs. These partnerships are also increasingly required to offer the customer a tech-based value proposition without having in house all the vertical competencies needed to develop it. The client is not always informed about the outsourcing of activities by the agency, nor does it know the name of the partner involved, who only acts as a service provider when the agency cannot provide a service with its own internal resources and expertise. In these cases, networking skills are crucial for better managing the coordination of external partners involved in the client's project.

A final, somewhat relevant theme emerged from the interviews: the deterioration of relations with clients, mainly due to reductions in the value of creativity and strategic consultancy in the eyes of clients. If the agency does not shift toward an integrated and high-level value proposition to support the client's communication strategy, the risk is very high that the client will see the agency’s contribution as diminished. In addition, the client is often more concerned with short-term results and is unwilling to recognize and therefore pay for the value of the strategic advice provided by the agency. The criterion of choice becomes exclusively economic; therefore, the advertiser will choose the interlocutor who offers the required service at the lowest possible price. In this process, the agency is treated as a mere supplier rather than a partner.

“The agency is no longer a partner but a supplier to be ‘squeezed.’ We often talk to the procurement department, which, in addition to buying pens and chairs, negotiates with those supposed to design the company's creative strategy constantly seeking savings” (Managing Director, creative agency).

Finally, respondents highlighted the need for a cultural change in creative agencies, which should develop a culture of collaboration (between different departments and external partners), experimentation, openness to innovation and measurability of communication initiatives.

4.2.1.3 Value capture

In the evolution of the creative agency's BM, value capture is the dimension most impacted by digital technologies: both its revenue streams and cost structure are deeply changed.

The interviews revealed an increasing variety of revenue models. In addition to the classic method of commissioning on investment (which is increasingly falling into disuse), remuneration that considers the hourly commitment of the resources involved in a project (full-time equivalent) is increasingly adopted. However, according to some respondents, this method is not particularly appropriate for agencies' strategic and creative work. Moreover, as the value proposition changes its orientation toward campaign performance, outcome-based remuneration is adopted.

All the creative agency respondents highlighted the search for efficiency in processes and the reduction of “wastes” of time, human and financial resources. As highlighted in the value creation section, by adopting cloud-based management software (e.g., Salesforce or Oracle solutions), the productivity and profitability of teams can be constantly monitored.

"Through the compilation of time sheets that flow into our management software, we can easily track how many people are working on a given project, the different roles involved, and how many hours they are putting in and can control the types of roles working on a project. We can also monitor profitability by seeing how many hours they are spending working on the project and whether those hours are paid sufficiently by the client. If the profitability is low, we must rediscuss the contracts or fix the agency team" (CEO, creative agency).

Concerning costs, respondents underscored cost reduction above all for labor and general expenditures, such as renting representative offices in central areas of major cities. Many agencies have worked on removing senior profiles with high gross annual salaries and replacing them with junior figures with significantly lower wages to reduce staff costs. A smaller number of employees combined with a less experienced workforce often leads to a deterioration in the quality of the provided service, resulting in client dissatisfaction.

According to many respondents, this aspect is one about which agencies must find a balance. As noted above, the search for flexibility through outsourcing certain activities might be a helpful path to undertake in some cases. Collaboration platforms enable this path, making it easier to reach partners specializing in certain technologies, even if they are geographically far from the agency.

4.2.2 The evolution of the media agency business model

Many respondents emphasized that media agencies have vigorously undertaken their DT processes, showing a very proactive attitude:

“There are media agencies that have become so good at managing their digital transformation that they are completely unrecognizable organizations compared to the past. Today, they are data-driven agencies” (Managing director, trade association). Media agencies are becoming consultants who support clients in their marketing transformation based on customer centricity and the development of data-led solutions.

According to some interviewees, mostly those in trade associations, this change is due to the economic and financial stability of those players who manage the most significant part of the client's budget and who, unlike creative agencies, operate in a very concentrated and global market.

In the DT of media agencies, analytics and big data, AI, digital platforms, cloud, and collaboration platforms play key roles because they enable a broader value proposition than the one offered in the past, and more importantly, they are at the basis of a deep change in value creation, strongly characterized by process automation.

4.2.2.1 Value proposition

Some respondents, mostly from trade associations, noted that media agencies have always played a technical role in helping companies choose the best location for their ads and buy media space at the lowest possible price. In recent years, these players have been raising the level of their offers, increasingly proposing strategic consultancy to clients to simplify the complexity that characterizes the new scenario.

“The role of the media agency today is twofold. On the one hand, you must be a consultant and simplify the complexity for the client in the new media landscape; on the other hand, you must be an intermediary and go out and plan and buy space in a traditional or automated way” (CEO, media agency).

As emphasized for creative agencies, another theme of the change in media agencies’ value proposition is the widening of the scope of activities needed to offer the strategic consultancy mentioned above. Today, these players offer a greater variety of communication services to clients, including SEO, influencer marketing, branded entertainment, sponsorship, events, and social media marketing. One area of substantial development in media agency offerings is related to all services for e-commerce that enable the client to create personalized experiences across the entire consumer journey.

Another central theme of media agencies' value proposition is outcome-based media consultancy: due to their data expertise, media agencies can propose campaigns that are strongly centered on client business goals. This goal is achieved by identifying and sharing with the client the best digital metrics for business goals (KPIs) and monitoring these indicators through algorithmic models during the entire campaign.

A focus on client goals is also made possible by real-time media optimization through AI-based programmatic platforms: agencies can dynamically shift media investments to better performing channels using sophisticated attribution modeling techniques.

In addition to media optimization, media agencies offer data-driven creativity. While we have seen this form of creativity to be only in its infancy in creative agencies that provide services with the collaboration of external partners, some media agencies are developing proprietary dynamic creative optimization platforms or at least all the skills for using Google services (e.g., Google 360).

“Today, we can produce and deliver a lot of creative stimuli that allow enormous personalization of content based on audience, stage of the consumer journey, and a whole range of other conditions agreed upon with the client” (CEO, media agency).

4.2.2.2 Value creation

The offering of strategic, outcome-based consulting by media agencies is made possible by significant technological investments in developing platforms (e.g., data management platforms), algorithms, and proprietary tools. In this regard, the development of proprietary trading desks within media agencies, such as GroupM's Xaxis and Dentsu Aegis Group's Amnet, is a case in point.

A central theme in the evolution of media agencies is automation of processes, enabling faster and more efficient solutions for clients and, as mentioned earlier in the value proposition section, the ability to optimize media investments in real time, 24/7. By relying on AI, cloud-based management software and platforms for sharing with clients, media agencies can integrate different data sources, make thousands of split-second bidding decisions, dynamically predict performance, and adjust media investments.

Several interviewees noted that the automation of certain processes has enabled media agencies to focus on a higher level of consultancy.

“Digitalization has led to the automation of processes and operations. It has also allowed us to free up time and resources to offer more value-added activities that enable us to play the consultancy role we do today” (CEO, media agency).

As we have seen for creative agencies, there is a need for new digital skills, which for media agency employees requires a continuous training program. Resources dedicated to digital planning must remain constantly up to date with all certifications from their partners (e.g., Google Adwords, YouTube, Meta and Amazon Advertising). Even the most traditional roles have been enriched with digital skills, which are necessary to offer clients integrated solutions that allow them to reach their targets effectively and efficiently by exploiting the potential of all media, both “traditional” and digital.

Another relevant aspect that has emerged is talent acquisition and retention to ensure efficient processes and to meet today's new (very fast) communication times:

“Speed is a fantastic performance booster for media agencies, but only if you're good at the process level and the structure level and if you have the right talent on board. If not, it becomes a waste of energy; it compresses your margins because you need more people to do more things. You do not do one annual strategy anymore; you do five during the year, which means a different resource commitment, margin pressure and a disruptive agency drift” (CEO, media agency).

This aspect of change remains very challenging for media agencies, as indicated by the difficulties related to talent acquisition and retention:

“There is a gap between what we need and what the market can offer us in the world of analytics and insight. People tend not to be attracted to the world of communication and data. We have a hard time finding them…” (CEO, media agency).

While the interviews showed a need for creative agencies to promote significant cultural change, the interviewees emphasized a growing digital mindset in media agencies, resulting in approaches increasingly centered on testing and learning, flexibility, and speed to scale best practices.

"Innovation is the constant in our work. Every day, we ask ourselves questions because what might have been good last month may not be the best choice today. We try, fail, learn, and try again to arrive quickly at the best solution to propose to the client” (CEO, media agency).

Another relevant theme emphasized by interviewees was the need to build and maintain strategic partnerships with OTTs (Google, Meta, and Amazon) to have access to trading desks and major demand-side platforms (DSPs) in the market to be the most informed about the latest innovations and thus to offer clients cutting-edge solutions. This ability is possible only for large media agencies belonging to global advertising networks:

“Being part of a network allows you to get closer to certain technologies, to have global strategic agreements with OTTs. Today, it is essential to access certain research that Google or Meta is carrying out and to develop truly innovative value propositions for the client. There are people in our group working in house at Google because they are developing things together for some of our clients” (CEO, media agency).

In addition to these high-level relationships, media agencies need business partnerships with technological suppliers, such as Salesforce, Microsoft, and Oracle, to provide clients with strategic and outcome-based media consultancy:

“Through our partnership with Oracle, we can drive the best business results for clients by dynamically reaching the target audience they are looking for and measuring the effectiveness of campaigns across all channels and programmatic platforms” (CEO, media agency).

In contrast to creative agencies, where business partnerships are a way to outsource some activities in search of flexibility, partnerships can play a different role in media agencies. Indeed, sometimes, partnerships involve start-ups or hyperspecialized agencies to allow the media agency to acquire their appeal to growth. This process happens mainly to provide client services that are distant from the core business and that, at least initially, media agencies have no interest in developing internally:

“The expansion of the service portfolio should be scalable: the new activities must be able to generate enough revenue to justify the costs incurred in implementing these services. If this is not the case, business partnerships are established with agencies that allow the offer to be completed more effectively and efficiently. Often, this is a transitory situation; then, we buy the most interesting partners” (CEO, media agency).

A final aspect of change that emerged from the content analysis was strengthened relations with clients, attributable to the advertisers' growing perceptions of the value of the strategic consultancy provided by media agencies. The role of “simplifying complexity” and strong data expertise allows them to provide an offering that achieves the efficiency that clients need and maintains the new rhythms of modern communication without compromising the strategic vision of campaigns. Relationships have also become much more intense because they are based on shared goals and results. Media agencies deliver increasingly frequent reports and, in some cases, the construction of shared dashboards from which first-party customer data and campaign outcomes flow into the cloud. Finally, media agencies are increasingly playing an essential formative role for clients on topics such as brand safety and data value extraction, especially for the coming cookieless era.

4.2.2.3 Value capture

On the revenue streams side, as in creative agencies, there is a growing variety of revenue models. In addition to the percentage of media investment, there are currently hourly fees for activities performed (full-time equivalent), and other forms of remuneration are increasingly connected to campaign results. Furthermore, in transforming the role of media agencies into strategic consultants, a trend toward project-based remuneration is beginning to emerge.

The increased use of automation of processes has led to a significant cost reduction. However, according to the respondents, these cost savings should be combined with increasing care for the talent within the structures and the increased focus of this talent on strategic consulting.

“Suppose we simply cut staff costs but do not invest in talent development. In that case, we risk failing to respond effectively and efficiently to our clients' demands, especially those of a strategic nature. This is a short-term operation that undermines long-term value creation” (CEO, media agency).

In contrast to creative agencies, where business partnerships prevail, media agencies frequently grow organically through the in-house development of trading solution platforms and acquisitions, especially concerning start-ups or agencies that can complete their value proposition.

5 Conclusions

5.1 Discussion and conceptual implications

This study is positioned within the growing strand of research that is deepening the understanding of the impact of digital technologies on incumbents’ BM evolution; this work proposes an original, comprehensive reading that jointly investigates which technologies are considered to have the most significant impact on the three BM dimensions, how these dimensions change simultaneously because of these technologies and, last, the intensities of change in these dimensions. In doing so, the study has overcome both the vagueness of previous contributions that have investigated the effects of digital technologies by considering them in general terms and the narrowness of other research focused only on the impact of one specific technology. Furthermore, by simultaneously analyzing the three BM dimensions, the study has extended the focus of previous contributions that only looked at one of them. Alongside this broadened perspective, this research has presented a profound reading, investigating the themes and intensities of change in each of the three BM dimensions.

Although the study was conducted in the specific context of the advertising industry, this research has offered original insights into the evolutionary dynamics of BMs that could enable the interpretation of a change in incumbents, even in different sectors that have been powerfully transformed by digital technologies (such as the focal sector).

Indeed, this analysis of the specific digital technologies impacting the three BM dimensions and the following in-depth study of the themes and intensities of change in traditional communication agencies has led to the delineation of an original interpretive framework of the evolutionary paths of incumbents. This framework includes the following three criteria:

  1. 1.

    Intensities of BM evolution (low vs. high),

  2. 2.

    Ways of BM evolution (BM extension, downsizing structures, and outsourcing vs. BM automation, strategic partnerships, and acquisitions); and

  3. 3.

    The BM dimension(s) most impacted by digital technologies (value capture vs. value proposition and creation).

By systemizing these three criteria, two different evolutionary paths have been identified (Fig. 4):

  1. 1.

    Outside-in BM adaptation, and

  2. 2.

    Inside-out BM innovation.

Fig. 4
figure 4

DT and BM evolution: An interpretative framework

Full size image

5.1.1 Outside-in BM adaptation

This is the evolutionary model of creative agencies that undertake a low-intensity change (precisely adaptation, according to the perspective of Saebi et al., 2017), driven mainly by external contextual factors (i.e., increasing competition).

In this case, digital transformation is characterized by the extension of the BM (Li, 2020) while downsizing structures. This involves the necessary use of external suppliers: the focus is on core competencies (i.e., creativity), and the acquisition of the necessary expertise on digital technologies is kept external while making customer offerings more complete. Thus, digital transformation is an externally "driven" evolutionary path in terms of both the triggers and the main ways in which it is achieved. This pattern may be typical of the first phase of an organization's DT when the full benefits attributable to the internal development and use of digital technologies are not yet fully understood.

With specific reference to the three BM dimensions, in the inside-out BM adaptation path, value capture varies the most (aimed at efficiency improvement and cost reduction), followed by value creation and, last, value proposition (with investments in less intense change).

Indeed, concerning our focal context, the pressures generated by intense competition under conditions of increasingly tight client budgets and a reduction in the consultancy’s perceived value by the client led to the profound rethinking of value capture. In this dimension, the search for flexibility represents a strategic imperative for creative agencies, which are increasingly configuring themselves as the "dispersed structures" described by Windels and Stuhlfaut (2018). The outsourcing of certain activities through recourse to business partnerships became the predominant way of completing offers to clients, as also underscored by Rachinger et al. (2019) in the media industry. Therefore, some creative agencies have adopted an "asset-light model", such as that described by Alberti-Alhtaybat et al. (2019) in logistics.

5.1.2 Inside-out BM innovation

This is the evolutionary model of media agencies that undertake a high-intensity change (leading precisely to innovation in BMs), supporting significant technology investments to increase the perceived value of the strategic consultancy offered to their clients. In this case, digital transformation of the BM is characterized by robust automation (Li, 2020) and organic growth or acquisition. Therefore, the path is “driven” from the inside by both the triggers and the ways of conducting the digital transformation. Companies that adopt this model seem to be at a more advanced stage of digital maturity.

Within this important transformation, the dimensions most impacted by digital technologies are both value creation and value proposition. Indeed, significant technological investments in platforms, AI, big data, and analytics have enabled process automation, increased expertise in technology and data, and the growing integration of technical knowledge and managerial vision. In their evolutionary path, media agencies were profoundly transformed by AI with many aspects in common with the BM evolution of manufacturing firms described in the recent article by Sjödin et al. (2021). The DT process has not led to the complete replacement of the previous BM focused on consulting in more traditional media. These agencies have seemed to adopt the hybrid models highlighted in the most recent literature (Endres et al., 2020). Moreover, the research has revealed a growing digital mindset based on a culture of data, trial and error, and continuous innovation: media agencies developed the strategic agility highlighted by Warner and Wägner (2019) to address the complexity of the new communication scenario. A particularly relevant aspect of value creation is the need to acquire and retain the best talent to offer clients an increasingly high level of consultancy. Moreover, the research has highlighted how media agencies exploit strategic partnerships with OTTs by belonging to large communication groups to propose highly innovative solutions to clients. In this sense, the results confirmed what was pointed out by the recent contribution of Cozzolino et al. (2021), who, delving into the topic of collaboration between digital platform-based ecosystems and media publishers, emphasized the need to initiate collaborative and coopetitive relationships between incumbents and these "new entrants".

As a result of this important transformation of value creation, the value proposition has also changed significantly, entailing more strategic offerings and a distinctive positioning of media agencies (as strategic consultants) within their communication services market. Their value proposition is also based on a strong focus on client outcomes through real-time media optimization and the personalization of creative stimuli throughout the consumer journey. As a result of efforts by media agencies to improve their value proposition, their relationships with clients become more intense and profitable.

Finally, in terms of value capture, the study also underscores the main methods of development of media agencies, which mainly use organic growth paths through the internal creation of digital divisions and with strong technological connotations combined with growth through acquisition following business partnerships with specialized suppliers. Concerning the latter aspect, the results seem to again confirm what Sjödin et al. (2021) noted about building scalable ecosystem integration in AI-enabled BMs and value-expansion partnerships with startups and SMEs.

5.2 Managerial implications

Our study has analyzed the most relevant aspects of the change in the BMs of creative and media agencies while highlighting some of the remaining challenges.

As far as creative agencies are concerned, profound cultural change is needed to address DT more proactively. A culture of timely measurement, collaboration and experimentation has not yet been fully acquired by creative agencies. Concerning the value proposition, that is, the dimension less impacted by this change, these players should be able to build brand awareness and images in the medium-long term and, similarly, be capable of guaranteeing reliable and measurable results in a shorter time. This goal, although shared by many respondents, remains particularly challenging to realize. The purpose is to restore the role of strategic consultants for clients played in the past, providing the client with support in campaign development based on a compelling creative idea that can be effective for both “traditional” and digital touchpoints and that is increasingly tech-based. Another challenging aspect is related to data-driven creativity: agencies, which have always built propositions on small qualitative datasets, can now create deep consumer insights by combining these propositions with big data analytics. They should obtain all the benefits from the analytics that are allowed to them in targeting and effectiveness measurements. To defend their role as strategic brand consultants, creative agencies should also strengthen their networking skills to coordinate the different partners involved in campaigns. In this way, the agency will guarantee coherence among all stimuli and respect for the fastest communication times.

At the organizational level, our results suggest the importance of continuously updating skills with the aim of combining skills in more traditional media with those in the digital domain.

At a more general level of abstraction, moving beyond the specific case of creative agencies, organizations undertaking a path of outside-in BM adaptation might choose two different alternatives. First, they might focus further on core competencies, occasionally activating their necessary relationships with external suppliers to produce a more comprehensive offering for their clients. Here, of course, networking skills, which are necessary for coordinating numerous partners without any loss in efficiency or effectiveness, are crucial. Alternatively, they might see the outside-in BM adaptation path as transitional and aim to introduce digital technologies and skills within their organization to initiate a more decisive inside-out BM innovation process.

Regarding media agencies, the research highlights the need to continue to improve the ability to extract value from data, focusing on strategic consultancy rather than the more technical component of managing media space. In the new cookieless scenario, agencies could propose themselves to clients as formative partners. Moreover, in digital communication, media agencies should market themselves as full-service agencies by guaranteeing a high level of competence, not only in media planning and buying but also in optimizing creative stimuli with data-driven logic. In this process, they should learn how to maintain brand identity consistency across all the personalized stimuli during the different stages of the customer journey. A final challenge relates to acquiring and retaining talented people with well-defined and stimulating career paths.

In more general terms, organizations undertaking inside-out BM innovation paths must work to maintain the perceived high value of their value proposition, thereby distinguishing themselves even from more specialized new entrants. Indeed, their experience gained in the predigital era combined with a vigorous DT allows these players to obtain a competitive advantage compared to those who have yet to begin the transition and who are pure player companies.

Finally, the study provides insight for the world of university and postgraduate education. According to the respondents, there remains a gap between the high demand for data specialists in media agencies and the small number of people with these skills. This evidence emphasizes the need to partially rethink training plans to align with the demands of the communication services market.

5.3 Limitations and future lines of research

First, this study was limited by the typical characteristic of qualitative research as statistically nongeneralizable in results.

The choice of the advertising industry as the focal context has led to results that might be specific to the players involved (i.e., creative and media agencies); however, the proposed interpretive framework (Fig. 4) could also improve the understanding of the evolutionary paths of the BM in other contexts. Therefore, an initial avenue for consolidating our insights could be to extend this research to verify the solidity of the framework in different contexts. It might be interesting to understand its applicability in other sectors profoundly transformed by digital technologies, such as fashion (McKinsey, 2023) and banking, where digital transformation is still a great challenge (Babbar et al., 2023). Furthermore, in our view, it is advisable to consider other variables that may influence BM evolution, such as organization size and the gender composition of the C-suite.

Moreover, since the advertising industry has been confirmed as an exciting area for investigating the DT of incumbents, future research could investigate the phenomenological variety of BM evolutions of both creative and media agencies through cross-case analysis.

The involvement of Italian respondents could have limited the study. However, we believe that the results might be interesting beyond the Italian context since the respondents also have long experience abroad and hold responsible roles in agencies and companies with strong international vocations. Nonetheless, another possible objective to be pursued in further research could be a geographic extension, considering countries with different levels of digital maturity (Statista, 2023).

Furthermore, the study outlines the evolutionary paths of the BMs of creative and media agencies without considering the perspectives of new players in the marketing communication services market, i.e., digital agencies and consulting firms. Their perspectives as competitors of traditional agencies should also be studied to identify further aspects of change and to draw a more complete competitive picture.