Do specialized "niche" marketing agencies perform better?

There are 100s of thousands of marketing agencies in the world.  Even though there are so many, most aren't very differentiated. And even though most agencies know that a narrow market focus makes for more effective marketing, most offer a large menu of services to a wide variety of clients. 

If you work at an agency or you hire agencies, we'd like your opinion about why this is. If all agencies picked a niche, could they serve their clients  better and build a more profitable agency to boot? Or are there valid reasons why clients prefer agencies who can deliver multiple services and serve multiple industries? 

Your response to the open-ended question in this poll may be featured in a blog post on the Databox Blog, (+29k subscribers) with a link to your site and/or shared via social media.

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