Living on Borrowed Time? The Ad Agency Model is Changing

If you have ever watched Mad Menmad men 2007 460 medium 203x300 Living on Borrowed Time? The Ad Agency Model is Changing, it is interesting to explore how agencies used to work….last week.  The cable series,  Mad Men, is suppposed to depict a time when the free-wheeling agencies on Madison Ave influenced what people bought and how they were supposed to think about products.  The interesting thing about the agencies depicted by Mad Men is they still operate much the same today as they did 50-60 years ago, what has changed though, is their decreasing ability to influence consumers.  Why are agencies stuggling to stay relevant with a model that has worked for so long?

          Business is becoming more about customer relationships rather than transactions.

Social media has changed the expectation of the consumer.  The digital landscape has created more opportunities and more challenges than at any time in the history of advertising.  Advertising agencies have been slow to react not because they are slow, they just don’t know what the new model should look like.  Attempting to bridge the gap:

  • Traditional agencies are trying to deploy technologies. 
  • Digital agencies are trying to  manage brands
  • Brands are trying to hire managers to oversee commerce, digital, social, technology, etc
  • Technology firms are trying to dis-intermediate the agency by going direct to the Brands
  • The world has been in one of the most challenging economic times since the 1930′s.

All of this together and the fact that agencies are pitching against very different competitive bidders to win new business and fighting to stay relevant when they actually do get a piece of business.  The world of advertising continues to become more complex.  There used to be a handful of consumer touchpoints from radio to 5 channels on television, now there’s millions of digital and hundreds of television touchpoints.  If this was all that had changed, the old agency models might still be working with expertise divided into practice units (brand design, direct, PR, events, promotions, multicultural and now digital).  Not only have the amount of touchpoints dramatically increased, the expectations of the client and the consumer have also dramatically changed.

  • New Client Demands: Integration & Accountability – companies are competing in a truly global economy.  Even smaller firms are able to compete across the globe thanks to digital.  In order to do this effectively, marketing cannot continue to be a siloed department.  Campaigns must integrate with CRM, commerce, logistics systems (shipping) and service to provide the level of experience and services that consumers now expect.  Marketers are also coming under more scrutiny to deliver results not just campaigns.  The have one of the largest cost centers and CEOs are demanding to see an impact on business.
  • New Consumer Demands: Engagement over the long term – Marketing is no longer a series of campaigns, it’s a commitment to the customer.  It is no longer OK for companies to run 15 campaigns across 12 brands using 7 different agencies in an un-coordinated and inconsistent manner.  Consumers love to buy, but hate being sold to.  Marketers cannot push message after message without a way to develop relationships with key customers.  Understanding that EVERY consumer touchpoint is an opportunity to over-deliver on the company experience, systems must be integrated from the ad on the web, to the message on the website, to the box that comes in the mail, to the person on the phone/chat in customer service….over the next 16 years.

Now I don’t know what the right model looks like.  Agencies like Crispin, Porter + Bogusky are helping us re-imagine the digital possibilities through experience innovation and agencies like R/GA are re-defining what the make-up of an agency should be (adding technology, SEO, social expertise along with traditional).  Even these front-runners are not integrated throughout the client nor do they look beyond the campaign overall.

For this week’s event we needed to find an innovator.  Someone who has been in the industry long enough to identify with the sacred cows and someone radical enough to help re-think them.  Hank Wasiak certainly fits the bill!  Hank has proven himself over and over again at the agency level, client level, creative and innovation.  This highly sought after industry revitalist is a must see wherever he goes.  To help us this week we decided on the following topic and subsequent questions:

Living on Borrowed Time? The Ad Agency Model is Changing

Q1: What do Brands expect from agencies today & are they delivering

Q2: How has social media altered the creative process and deployment of  marketing communications programs?

Q3: What does the agency of the future look like?

This week’s event will take place Tuesday 9/14 at noon ET as always.  To join in simply use the keyword #sm77 using your favorite Twitter client or go to out LIVE page at www.hashtagsocialmedia.com/live.

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3 Responses to Living on Borrowed Time? The Ad Agency Model is Changing

  1. Pingback: Ad Agencies and Social Media « Brian Groth on Social Media and Online Advertising

  2. Lelah Andrea says:

    Success is really a ladder that can not be climbed with your palms in your pocket

  3. Dallas SEM says:

    Thanks for this AWESOME information! I will definitely have to use this in my blog!

    Adios!

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