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June 17, 2010
With So Many Specialized Agencies, Who Should Get Your Marketing Dollars?
Ad agencies, PR firms, digital agencies, branding agencies, media agencies, social media agencies, etc. Today, the various services that make up a marketing campaign are siloed among so many specialized players that one must ask who manages the big picture. In too many cases, the answer is no one, and that’s a lose-lose situation for both agencies and clients.

I’ve been discussing this question for two days with both ad agency owners and clients at the San Jose Network’s (SJN) annual conference in Miami. SJN is a network of independent, full-service ad agencies with a strong focus on Hispanic markets. SJN is also an affiliate of the Transworld Advertising Agency Network, to which my agency belongs.

The consensus among clients and agency owners is that siloed marketing services would converge under the leadership of one of the players, but few felt that ad agencies, as we define them today, are well-positioned to take on that role. Ironically, media agencies, like Mindshare, emerged from the discussion as the most likely to lead. This was based on the perception held by many clients that media agencies have the best understanding of the market, and therefore, they would be the best strategic partner for the client. The accuracy of that perception was debated, but most agreed it is widely held. That was a disappointing prospect to all the ad agency owners in attendance, but as an industry, we only have ourselves to blame.

Ad agencies began as media brokers in the 1800s and have suffered from media commission-induced tunnel vision ever since. It started with the exclusion of “below the line” work and PR from core-agency skills. In the 1980s, clients wanted branding expertise. Most ad agencies refused to develop that competence, which gave rise to branding agencies. When the Internet became recognized as a valid marketing platform in the 1990s, ad agencies resisted that as well, which gave rise to Web agencies. Adaptation agencies sprang up for the same reason when clients began advertising beyond their domestic market. Over the last few years, ad agencies have failed to pick up on social media, which gave rise to social media agencies.

As a result, clients today need a barrage of different agencies just to market a single product or service (see Justin Celko’s excellent Talent Zoo post: Who Should Handle My Company's Social Media Initiative?). These silos are not in the best interest of clients. They are simply the by-product of an industry that has ignored its customers' needs and blindly resisted change at its own peril.

Little wonder why over the past decade independent ad agencies have been falling over each other trying to distance themselves from the label “ad agency.” Instead, they use descriptors like “communication agency,” “marketing agency,” or “integrated brand communication agency." Who could blame them? Thanks to a severe lack of industry governance, today the term “ad agency” stands for a business model that, for all its hype, is essentially a rigid, self-absorbed, and largely irrelevant institution that peaked in the era of Don Draper and has been in decline ever since.

Today, I think it’s the independent ad agencies that are best equipped to pick up the baton and orchestrate the efforts of the other players -- if they reinforce their business model in three primary ways. First, they will need to ensure that they always have the best planner in the room. Under a lead-agency model, it’s the player who owns the research, planning, and insights who holds the power. Second, they will need to be super agile and adaptable. They will need to be closer to the market and respond quicker to new opportunities and client needs than the behemoth global-network chains. Third, they will need to develop the maturity to not monopolize clients’ budgets, but to truly work with different specialists in the best interest of the client.

As the media landscape continues to morph, I see this new, more adaptable, more cross-functional breed of advertising agency emerging in independent networks like SJN and TAAN. As an independent ad agency owner, I believe we have the opportunity to serve as a model for this new generation if we move to take the lead. Ultimately, it will be our initiative, and our clients, that decide.

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Sean Duffy is a founder of Duffy Agency, the digital marketing agency for aspiring international brands. Sean has over 25 years of experience working with strategic marketing in Boston, San Francisco, Stockholm, and Copenhagen. In addition to his involvement with Duffy Agency, Sean is a frequent speaker on strategic international marketing and online brand management. He serves also as Lecturer and Practitioner in Residence at the Lund University School of Economics & Management and as Mentor in their Masters Program in Entrepreneurship. Sean is an active member of  TAAN Worldwide where he has served two terms as the European Governor. He is also a speaker, bloggerTwittererand is on LinkedInWith offices in Malmö and Boston, Sean splits his time between Sweden and the States.

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