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A new report by Forrester tells what many in tech have known for the past 10 years – that the ad agency is dead. The report says that by hiring more tech savy people the agencies can keep doing business as usual. The report author does not understand three things:
1) Ad agencies are a billing business not a technology business (no different than other fee based services like lawyers or real estate agents). As long as technology keeps infiltrating the ad business. The agencies are in a no win situation. They are not in total control of the future of their industry.
2) A good chunk of the digital advertising systems are moving to a do-it-yourself model. These systems cut out the middle man (the agencies). It is just a matter of time before a large chunk of the ad business will be digital and measurable (something the agencies don’t like – because they want to bill you like there is no tomorrow and get into creative mambo jambo artsy fartsy stuff).
3) Social media is the game changer – users, marketers and advertisers are already starting to do their own advertising, lead generation, branding, polling and surveys using social media tools. The shift toward do-it-yourself is only going to increase. With the wide availability of do-it-yourself systems gone will be the days where you (or your company) will hire an agency to handle your digital advertising. The advertising (digital) will become part of the web department. Disclosure: Our Social Media Strategies Conference is focused on helping companies take control of and effectively managing their social business, social marketing, advertising and optimization strategy.
A good example is McCann, it is a traditional ad agency that poached a few technology savy people and cloaks itself as a digital agency. They really don’t understand or know tech – their real goal is to get into your company and bill you up the wazoo. I know so many people that were billed hundreds of thousands and they never saw any (not even a shred) of measurable benefit or evidence. Those companies would have been better off doing online advertising. Today only the laggards in the technology industry use McCann.
Channels: ad agencies, social media
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"…creative mambo jambo artsy fartsy stuff"?
Wow, that's a shockingly ignorant/arrogant comment. Unless I'm from another planet, this is a service and experience-driven economy we're in. Ergo, creative thinking is, and will continue to be at a premium. You might consider not making flailing comments like this in the future.
Also, "…The advertising (digital) will become part of the web department." Um, no. The natural process of changing creative services to keep things fresh is what matters most to savvy advertisers. It's a lot easier to have 3 or 10 creative shops fighting over your business than hiring a comfy, complacent internal design staff otherwise known as a "one trick pony."
This article is a mess of haphazard generalizations and predictions, IMAO anyway.
Lovingly,
An FWA-winning interactive designer/developer
Comment by Chris — March 29, 2010 @ 9:39 PM
Hehe…
You are right on the point Chris.
I own a ad agency with 15 professionals.
We create. Something most people can not do.
Thats why there will always be a premium. Just like doctors and lawyers, only they can do what they can do…
Is there a difference between designing and building your own home vs. a service professional doing it for you? I believe there is a big difference.
Template Vs Custom: Yes, most people will get what they pay for! If you think its easy to create a professional website, go and see it for youself.
Yes, the country is going self-serve. But there are few things still left for the creative people of the world. Great designs comes from the gifted people who developed their skills from good genes and hard work…
There will always be a future for Agencies that deliver great designs…Technology is simply a tool which we use to create.
If you don't believe me, just take out a notepad and pen and start skeching!
Comment by kevin — March 30, 2010 @ 12:10 AM
Points 1 and 2 are roughly correct – although, flippant statements only make you lose credibility. On the other hand, point 3 is nether here nor there. First social media works only for some verticals. Second, large advertisers with substantial budgets do not necessarily want to maintain a staff to manage all their channels and do it all themselves. They don't want to know the nitty-gritty and do the dirty day-to-day campaign management work. Enter: the Agency, with all it's creativity and benefits, it's inflated fees and lack of accountability or transparency. But no matter. There is a place for them. Sometimes, it just makes sense to order the $50 gourmet birthday cake rather than bake it yourself.
Comment by Anonymous — March 30, 2010 @ 4:34 AM
This is a sensational headline, but this is not true.
Most ad network (and there are hundreds of them), are really ad agency in disguise. I know most ad network will never admit it. However, they essentially play the role of agency with a little bit of "technology". The fine line between traditional ad agency and ad network will become more and more blurred. Eventually, most ad agency will merge with ad networks.
Agency is alive and will be alive.
Comment by GeekMBA360 — March 30, 2010 @ 5:09 AM
There's a Home Depot in Palo Alto, for the DIY'ers.
Comment by PreFab in Valley — March 30, 2010 @ 6:12 AM
Completely agree – Ad Agencies as we know them today are a dinosaur looking for the promise land of food – doesn’t exist.
This is a group that clearly doesn’t understand social media and hasn’t realized that the model of charging for ad services and marketing services is going by the way of the dinosaur. I talked to a large agency a few weeks ago and the emphasized they want people for the future that have an agency background first and then social media skills. This is why the word “Oxymoron” was created.
Personally, I am anxious to watch the demise of the traditional agency as they have handicapped businesses for a long time. Finally they will be set free when they can use the tools of social media to become closer to their customers than they could ever do before with the help of an agency. Watch the evolution – the dinosaurs are running out of food…
Blaine Millet
http://www.wom10.com
@BlaineMillet
Comment by Blaine Millet — April 3, 2010 @ 6:48 PM
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Comment by sensorineural — December 27, 2010 @ 8:19 AM
Just left an ad agency TODAY, I am a Web Developer by trade and have my SEO and Social Media Certs to make any client triumphant returns on a way smaller budject than any ad agency could ever hope to deliver. I used to own a Recording Studio with big money equipment, but since the explosion of technology a kid can have the equivalent of a L.A. Studio in his basement for a couple of grand. I adapted, changed and went back to school. Now those skills are used in pod casting, youtube, well you get the picture. Im not going to say something like "mambo jambo artsy fartsy stuff" because creative is a beautiful thing. I mean web is art and logic put together. But what I will say is that ALL AD AGENCY's are DEAD… its only a matter of time.. maybe 1 -2 years at best. Your like blockbuster. Its OVER… go do something else. Newspapers are Blogs, Radio are on iPods now, Marketing is done through the wire…. I had to leave my position because at the end of the day they just didn't get it. I handed them a Seth Godin book and said thanks but no thanks….
ps. The sweet part is I left because a roofing company hired me as their in house online marketer for double the money and if you now what Ad Agency charge…. well lets just say my passion is my career and I gots to get PAID! yeah baby!
Comment by Chris — February 17, 2011 @ 7:46 PM
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