Report Paints a Painful View of Ad Agencies

resetting ad agency new business

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.

photo credit: mellyjean via photopin cc

About Michael Gass

Consultant | Trainer | Author | Speaker

Since 2007, he has been pioneering the use of social media, inbound and content marketing strategies specifically for agency new business.

He is the founder of Fuel Lines Business Development, LLC, a firm which provides business development training and consulting services to advertising, digital, media and PR agencies.

Comments

  1. Interesting and useful article.

    ‘Forester believes ad agencies need to be organized around communities, not disciplines’

    – Yes.

    Here are a few ideas (some may be bad, hopefully, one or two good) for people working in a traditional, creative ad agency environment:

    At least once a week, each person from each discipline should and come and sit together (even if they don’t work with each other at first, after a while they might start seeing opportunities where they could help each other).

    Or, one permanent team is created with a person from each discipline in it. Each team member can obviously work, closely, with their old team members but there would be the real opportunity to work in an integrated way. Meanwhile the rest of the agency would carry on as before (in their usual teams / groups).

    Each planner should become a bit of an expert in another discipline, i.e one planner a bit of an expert in PR, another in the creative process, another in digital and so on.

    Awards (and money) should be held each year for people who have done something out of the normal remit (i.e contributed in an important way to some integrated work).

    Planners should spend a few days working in a digital environment.

    ‘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’

    – the trap that some digital agencies are falling into, I think, is that advertising is going to be all about being utilitarian / functional. But audiences still want to be entertained as they have been in traditional advertising (take the success of the Cadbury’s Gorilla viral, for example).

    Eamon (account planner – London http://www.spotlightideas.co.uk)

  2. Eamon, some good thoughts. Agency promotion utilizing Web 2.0 tools is also a good practical way to integrate your traditional marketing staff with your interactive staff or interactive partner.

  3. “Most senior ad execs appear more comfortable with conventional channels, which they claim are ‘integrated’ because they have tacked on a Web site.”

    Love this comment and it’s so true.

    Great read and information. Thanks…

  4. and thank you for taking the time to comment.

  5. And we are supposed to believe Forrester knows a LOT about these things, don’t we?
    It would help if whoever is written this report would stop trolling (‘coz that’s what this report is)and start thinking.
    ‘Communities of mutual interest’ and ‘continuous engagement’ with how many brands Mr. Know It All author? A few dozens? A few hundreds? A few hundreds of thousands? ‘Coz there are those many brands that would all want Joe the ‘consumer’ to be part of what you call ‘communities of mutual interest’ – which, if you really stop to THINK (it is hard, I know) are really about the brand’s interest, which, to enlighten you, isn’t really THAT mutual.
    Sorry to crashland your fantasies, but read the ‘letter’ here…
    http://johnniemoore.com/blog/images/letter.jpg
    The business of connecting with people has nothing to do with digital or analogue, it is about PEOPLE and their motivations and desires, but focusing on that truth won’t sell too may Forrester reports I suppose.

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