So yeh. In May 2018, I sat down for a video interview with Velocitize about where digital agencies and marketing strategy were heading. I was running Pragmatic at the time, watching the industry transform around us, and trying to articulate what that transformation meant.
The conversation covered the convergence of marketing and business strategy, brand purpose becoming central, and what I called “an existential challenge” facing digital agencies. Looking back from 2025, some observations aged better than others.
The Core Thesis: Marketing Is Business Strategy
Q: How is marketing strategy evolving?
David: Marketing strategy is coalescing with overall business and brand strategy. These conversations are aligning in ways they haven’t before, creating more powerful communications.
This wasn’t a new insight in 2018, but it was becoming undeniable. You couldn’t separate “marketing strategy” from “business strategy” anymore. The companies doing interesting work were the ones treating them as the same thing.
CMOs were getting seats at the strategic table. Marketing wasn’t downstream from product decisions – it was informing them. Brand wasn’t just veneer; it was architecture.
From 2025: This proved directionally correct. The best companies today don’t distinguish between marketing strategy and business strategy. They’re integrated functions. Though many companies still haven’t figured this out.
Business Filling the Trust Vacuum
Q: What role are businesses playing in society?
David: Companies are filling responsibilities historically held by government and NGOs. We’re moving toward a more multifactor engagement focused on community-building and solving customer needs through dialogue.
This was the Edelman context again – trust in institutions was declining, and businesses were stepping into the gap. Not because they were altruistic, but because customers expected it and competitors were doing it.
Patagonia was suing the Trump administration over public lands. REI closed on Black Friday to encourage people to go outside. Companies were taking stands on social issues in ways that would have been unthinkable a decade earlier.
The question was whether this was genuine or performative. And whether customers could tell the difference.
From 2025: This trend accelerated dramatically. ESG became mainstream (and controversial). Stakeholder capitalism vs. shareholder capitalism became a real debate. Companies did increasingly take positions on social issues – sometimes authentically, often cynically.
The challenge I underestimated: backlash. By 2025, “woke capitalism” became a pejorative in some circles. Companies got whipsawed between different stakeholder expectations. Being “purpose-driven” got harder, not easier.
The Existential Challenge for Agencies
Q: What’s the biggest challenge facing digital agencies?
David: There’s an existential challenge: transitioning from marketing sidelines to core business strategy positions. Agencies must expand capabilities beyond digital marketing itself. We’re undervalued and our strategic impact remains underappreciated within organizations.
This was me wrestling with what we were experiencing at Pragmatic. Clients wanted strategic partners, not execution vendors. But they weren’t always willing to pay for strategic partnership. And many agencies weren’t equipped to deliver it.
The skillsets required were expanding:
- Business model design
- Organizational transformation
- Technology architecture decisions
- Data strategy
- Customer experience across all touchpoints
If you were just building websites and running ad campaigns, you were increasingly commoditized.
From 2025: The existential challenge was real, but the solution wasn’t what I expected.
What happened:
- Big consulting firms (Accenture, Deloitte, McKinsey) bought creative agencies and expanded into marketing
- Holding companies struggled and consolidated (WPP, Omnicom fighting for relevance)
- In-house teams absorbed more work
- Specialized boutiques thrived in specific niches
- Platform companies (Google, Meta, Shopify) became the real marketing partners through their tools
The traditional full-service digital agency model – which Pragmatic represented – got squeezed from all sides.
Many agencies solved the existential challenge by being acquired, pivoting to products, or specializing deeply. The “expand capabilities to become strategic partners” path worked for some, but it was harder than I acknowledged in this interview.
The Digital Economy Shift
Q: How have client expectations changed?
David: We’re entering a new economy, a truly digital economy, where client expectations have fundamentally transformed.
I was gesturing at something real but being vague about it. What did “truly digital economy” mean?
What I was seeing in 2018:
- Clients expected omnichannel experiences
- Data-driven decision making wasn’t optional
- Agile development cycles replaced waterfall
- Minimum viable products and iteration vs. big launches
- Direct-to-consumer models disrupting traditional distribution
- Platform business models replacing linear ones
But calling it “a new economy” was hand-wavy. It was the same economy with better technology and higher customer expectations.
From 2025: The transformation continued but wasn’t as revolutionary as “new economy” implied.
E-commerce grew massively (COVID accelerated this). Digital-first companies scaled. Traditional companies digitized or died. But the fundamental economic principles didn’t change. Value creation, distribution, customer acquisition costs – still mattered.
The bigger shift: AI and automation. That was the “truly new” thing, and in 2018 we were only beginning to see it. ChatGPT launching in late 2022 changed expectations faster than anything in the prior decade.
What I’d Say Differently
If I could redo this interview:
Be specific about “digital economy”: Spell out what’s actually changing – customer expectations for convenience, personalization, and transparency; zero-transaction-cost information; network effects enabling winner-take-all markets; data as competitive moat.
Acknowledge agency constraints: Agencies face structural challenges beyond strategic positioning – billing models misaligned with value creation, talent retention difficulties, client procurement processes treating them as vendors, difficulty investing in R&D.
Name the real disruptor: The existential challenge wasn’t just about expanding capabilities. It was about platform companies (Google, Meta, Amazon, Shopify) becoming the primary marketing partners because they controlled distribution.
Purpose-washing is real: Be more skeptical about companies “filling responsibilities historically held by government.” Some were genuine. Many were performative. Customers were getting better at telling the difference.
The convergence is messier: Marketing strategy coalescing with business strategy is directionally true but implementation is chaotic. Politics, silos, legacy structures, and compensation systems fight against integration.
Looking Back: The Context Matters
This interview happened in a specific moment:
- Agency world: Pre-consolidation wave, pre-COVID, before in-house became dominant
- Economic context: Late in an expansion cycle, before 2020 recession, tech stocks still rising
- Marketing tech: Pre-GDPR enforcement, before iOS privacy changes, pre-TikTok
- Social climate: #MeToo, Trump administration, pre-George Floyd, brands just starting to take public positions
The observations about marketing/business strategy convergence and brand purpose mattering were directionally correct. The optimism about agencies expanding into strategic roles was overly hopeful. The “new digital economy” language was too vague to be falsifiable.
What Aged Well
These ideas from 2018 still hold:
- Marketing and business strategy should be integrated – Companies that figure this out win
- Community-building matters – Though the mechanics differ from what I imagined
- Strategic thinking is undervalued – Execution is visible, strategy is invisible
- Customer expectations keep rising – And technology enables meeting them
- Agencies need to evolve – Though the path forward is different for each
What Didn’t Age Well
These were off:
- The specific agency evolution path – “Expand capabilities” was one option, not the only one
- “New economy” framing – Oversold how revolutionary the shift was
- Brand purpose universality – Works for some brands, backfires for others, not universally applicable
- Underestimating platform power – Google, Meta, Amazon reshaped marketing more than agencies did
The Honest Take
Reading the transcript now, I see someone trying to make sense of industry transformation while in the middle of it. Some pattern recognition was accurate. Some was wishful thinking about the role agencies could play.
The most useful insight: recognizing that marketing and business strategy converging was significant. The least useful: believing digital agencies were positioned to lead that convergence.
Agencies (including Pragmatic) were scrambling to figure out our role in a world where:
- Platforms controlled distribution
- In-house teams had more resources
- Consulting firms competed for strategic work
- Specialized boutiques delivered excellence in narrow domains
- Clients expected more for less
Some agencies navigated that successfully. Many didn’t.
The existential challenge was real. The solutions were harder than a ten-minute interview could capture.
—
Published: May 11, 2018
Format: Video interview with Velocitize Talks
Context: David Lockie as founder of Pragmatic digital agency
Source: Originally published on Velocitize
2025 Note: This retrospective reflects on predictions and observations with the benefit of hindsight. The challenges identified were real. The solutions were more complex and varied than anticipated. That’s how industry transformation works – messy, with multiple paths forward, and no single narrative captures it all.
Related articles:
- Freelancer to Agency Owner – The journey to starting Pragmatic
- Enterprise Ecommerce with WooCommerce – Business strategy work from this era
- 4 Ways Blockchain Will Disrupt Digital Marketing – Another 2018 prediction, equally optimistic