Your ad agency may need to break some bones to reset them correctly.
Forrester Research believes today’s ad agencies are not well-structured to take on tomorrow’s marketing challenges. Agencies need to move from making messages to establishing community connections.
In a report, the research firm paints a painful view of ad agencies.
“The current state of advertising is in “a world of hurt.”
Consumers are tuning out the messages the ad industry is determined on producing.
Forester believes ad agencies need to be organized around communities, not disciplines. What it is calling “the connected agency” would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns.
“I can’t say there’s an agency now that’s the agency of the future,” said Peter Kim, a Forrester Research analyst and co-author of the report.
The research firm is certainly not the first to assert that agencies haven’t kept up with changing consumer habits and technology. Accenture in November said the shift from analog to digital media is catching agencies flat-footed.
In Forrester’s view, a simple fact is driving the need for needed change in how advertising agencies are structured: consumers increasingly do not trust marketing messages. Instead, they rely on advice from friends and others in their various communities to make product decisions, while using tech tools to tune out ad messages they deem irrelevant.
“I don’t think agencies are going away,” Kim said. “They’re going to be the ones that help marketers to communities of mutual interest.”
Forrester said creative and media agencies are still built around the mass model: to either produce messages or distribute them. Digital agencies have gone farther, in Forrester’s estimation, in centering their businesses around “interaction”, but it finds them lacking in the branding skills of traditional ad agencies.
Clients are finding their agencies lacking. Forrester quotes one marketing exec calling agencies “a necessary evil,” rather than a strategic partner to grow his business. Another complains, “Most senior ad execs appear more comfortable with conventional channels, which they claim are ‘integrated’ because they have tacked on a Web site.”
“The first step [agencies] need to take is with digital integration,” Kim said. He added that the organization of ad agencies around specific skill sets is the root of their problems.