Today, agencies must deliver technology–in addition to creative–expertise, and many traditional agencies struggle to adapt.
– Peter Kim, Forrester Research Analyst, via MediaPost
What will the future hold for advertising agencies? Well, we’re beginning to see some trends unfold:
Marketers are questioning the current and future relevance of traditional media & advertising shops. Will large agencies be able to evolve to meet the requirements of new technology? According to a recent Sapient study, “52% of CMO’s believe that traditional, large advertising agencies are ill-suited to meet online marketing needs.”
As a result, brands are relying more and more on Digital shops for technology-based marketing solutions. Ikea just appointed Agency.com as agency of record for all advertising. Digital agencies are generally less siloed and therefore more nimble when it comes to new media and experimentaion.
Perhaps the biggest hindrance of natural evolution at some tradtional agencies are mid-level managers who are too specified and pigeon-holed. Their media and account management expertise does not necessarily translate well when faced with demand for technologically-based marketing solutions. The evidence of this is clear: traditional shops are slow to react, expensive, and in more recent cases, “shooting blanks.” No wonder Ad Executives are “surprised by the rate of change!”
Prediction: Holding companies care about bottom line profit. Rather than waste money re-training traditional human capital and resources, one might predict lay-offs and downsizing. While holding companies “trim the fat” from decreasingly relevant non-digital media and account management groups, expect to see more digital specialty shop acquisitions.
If you are interested in this topic, I recommend:
[tags] ad agencies, media agencies, the future, mediapost, forrester, sapient, change, marketing.fm, marketing blogs [/tags]