What is the future for Advertising Agencies?

• As I work in a digital advertising agency, I often ask myself what is the future of advertising agencies. I really think that traditional (digital/or not) advertising agencies do not have the skills to deal with the post-crisis consumer. So, are we all doomed to be replaced by low-cost web agencies? Are we all going to become consultants paid on a daily basis? Do you think there is still space for the intangible value created by advertising?

• Answer:

  Most agencies, digital or otherwise, have built their businesses around a client services model - address business goals by working with the client to market to consumers. Traditionally, this means doing some research on the target, then cooking up a message that might appeal to them, usually on TV or in print. And when the web became more ubiquitous, most agencies didn't change their approach (most just decided it would be best to include "digital" in their list of services). In other words, it's still a client services model. The client opens up a budget for an initiative that they think will impact their bottom line, and the agency is hired to back up that direction with ideas and executions. And with few exceptions, this doesn't work for the web, for mobile, and least of all for the consumers. Most people - at least those who are wired to the digital world - know when they're being marketed to. And they're armed with more technology in their pockets than the astronauts in the first Space Shuttle ever dreamed of. They have a zillion alternatives to whatever information a brand is trying to push at them. Sure, there are lots of forward-looking agencies and brands. They're embracing social mediums and investing in branded technology services – but most are still missing the point, aiming for "hubs" of activity that largely rely on consumers to do all the work: Hey you! Search for something (that relates to our brand/service). Click Something (that supports what we want you to do). Watch or read something (that we want you to believe). Share something (be a marketer for us). This is not engaging, because ultimately it's built around what the client/brand wants people to do, not what the audience wants or needs. Nobody cares about banners, sitelets, and sweepstakes. We're really not all that hyped about your new Twitter handle, or your Awesome New Social Collaboration Thing. Maybe if you add kittens, but otherwise... We filter it out as white noise. You know it's true. So, to answer your question - one of them anyway - yes, there's still space for advertising. It's 728x90 pixels on the top, and 300x250 pixels in the right column. On your phone, it's about the size of a piece of Trident gum. If I click on it, it most likely takes me to something that was very expensive, and I'm unlikely to give it even 30 seconds of my time. Digital Advertising is a lie. Nobody wants it, and people's behaviors change daily. One little app that blows up big can tilt the way all of us perceive information. And YES big agencies have lots of talented people with unique and valuable skills that are, of course, completely relevant to addressing this cause. What needs to change is the organizational and business models. There's no reason a healthy approach to digital can't coexist with a healthy approach to TV and print (if there is such a thing). But agencies have to address the complexity of the digital user needs and expectations,  and the technologies that support them. It's different. Let it be different. Build new business around this reality. Fair warning, it's going to hurt a bit.