With the rise of digital and mobile tied with ever-more segmented media consumption, the traditional agency model has been beaten up on again and again...and again. Digital marketers, social media "gurus," corporate marketers, and media planners are all trying to figure out what the next generation of advertising agencies will look like.
And yes, they stole the name from Internet geeks. At a seminar organized by the IAA and the AAAI the next model has been donned "Agency 2.5." What will Agency 2.5 look like? Well, a writer from Exchange4media recapped what Tim Williams, managing director of the Ignition Consulting Group, prophesied. Much of what he said we have heard before.
First he touched on crowdsourcing, a topic that a Beyond Madison Avenue writer touched on recently. Crowdsourcing can produce quality work at a fraction of the price of traditional agencies, says Williams. This comparative advantage can ultimately checkmate the traditional agency. Like the other BMA writer, I too am a little skeptical of this claim. But again, we've heard this before.
Next Williams mentioned an IAB study that pointed out that 52 percent of corporate marketers are interested in doing business solely with media companies. The ad agency must evolve into a provider.
To avoid going into excrutiating detail, here are some other highlights:
Agencies must move from making paid media a priority to making earned and owned media as a priority.
Invest more in creativity and ideas than in structure and resources.
Get a better sense of data and behavioral science.
Think of digital as a competency more than a practice.
Charge clients based on the value the agency brings, not the time spent.
A lot of it seems to be the 5,000-foot view we are getting used to hearing about Agency 2.5. It is true that agencies need to change in order to survive, but where should they start? How can these monster agencies change their compensation structure? Will all corporate marketers be okay with paying for "perceived or retained value" instead of billable hours, creative, etc.? And as small shops begin to flourish, will we see the end of Publicis, WPP, Omnicom, and IPG? One thing is sure: the road to Agency 2.5 will be an interesting one.