Question

Topic: Advertising/PR

Future Of Advertising Agencies

Posted by Anonymous on 4/24/2009 at 8:04 AM ET 250 Points
"First there was the talk of Print dying because of TV. Then TV dying because of the Internet. Of late there is a view that the advertising business itself is doomed given the onslaught of consultants, specialist communication companies and digital hot shops"

What is your view? What is the value (if any) that an advertising agency continues to add to a brand? If the business is to prosper, what is it that we need to protect and nourish?

This is a topic of the discussion I would be participating in 2 days later(26th April'09), it would be of great help if you all can pour your views and comments.

Thanks a lot in advance!!
Anshita
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RESPONSES

  • Posted on 4/24/2009 at 9:22 AM Accepted
    As long as there are brands and products and the need to communicate the advertising industry will exist. It might need to adapt to new channels and a changing consumer and a changing environment but the industry will continue. New ways to compensate ad agencies will develop perhaps more in connection with results but the latter has to be refined as agencies have no control on distribution and price much less on products production standards. At any rate I do not think any media will disappear as press did not disappear when radio arrived nor did did it disappear when TV arrived. Traditional and new media will work together and sometimes separate depending on the specific marketing strategy. What might happen is that if some of the players in traditional media do not accommodate to the changing marketing world they might face horrible times.
  • Posted by telemoxie on 4/24/2009 at 9:27 AM Accepted
    One aspect that you might consider as you prepare for your discussion is the size of businesses which utilize advertising agencies.

    I have had several advertising agencies as clients, and I have cold called hundreds if not thousands of corporations promoting those clients. In my experience, smaller companies tend to use the specialist firms and consultants you describe. However, it seems to me that the larger firms and largest firms continue to have an advertising agency of record, and seem to prefer that these agencies function as a middleman, so that the largest corporations rarely contract directly to small specialist firms, and be small specialist firms have a very difficult time approaching very large advertisers.
  • Posted by Jay Hamilton-Roth on 4/24/2009 at 1:38 PM Accepted
    Don't confuse the message with the medium. Businesses still need to tell prospective customers about themselves, but the way people "tune in" for the message continues to change, faster than in decades past.
  • Posted by SteveByrneMarketing on 4/24/2009 at 1:58 PM Accepted
    very good input from above posters. I agree that advertising agencies will live on for the foreseeable future, at least in function, although they probably will be called something different to reflect a new business model.

    The horse drawn carriage was a means of travel during the dawn of the advertising agency. Then came the horseless carriage renamed the automobile. So for fun, what will be the new name of advertising agencies .... AutoAds for automated advertising the agency-less advertising model :-) No this is not the answer. But will be the new name?

    Hope this helps,

    Steve

    Note of history From Wikipedia
    "In 1864,William James Carlton began selling advertising space in religious magazines. James Walter Thompson joined this firm in 1868. Thompson rapidly became their best salesman, purchasing the company in 1877 and renaming it the James Walter Thompson Company, which today is the oldest American advertising agency. Realizing that he could sell more space if the company provided the service of developing content for advertisers, Thompson hired writers and artists to form the first known Creative Department in an advertising agency. He is credited as the "father of modern magazine advertising" in the US."
  • Posted on 4/24/2009 at 4:44 PM Accepted
    One thing we've noticed in our agency is that people keep getting excited about the Next Big Thing (right now it's Twitter). They jump in with both feet, realize they don't know what they're doing and they're not getting any results, and then come to us for help. The comment above about the message vs. the medium is dead on.

    We've found success with the message that we coordinate all the parts - from strategy to tactics to the actual execution. Any experienced manager or owner knows what a hassle it is to try to keep track of all the vendors and their myriad projects. Trying to project manage all the marketing activities while running a business is nearly impossible. We keep track of it all for them, they only have to talk with us. The parts keep changing but the machine still has the same purpose.
  • Posted by SteveByrneMarketing on 4/25/2009 at 12:03 AM Member
    one more thought ...

    other categories of profession services firms are becoming general managers of projects. They know their industry, and they are in the best position to contract talent and manage the process. Two key factors are transparency and clear concise reporting of status.

    That said, I think advertising agencies will become "advertising management" companies by whatever name. Not unlike the media management firms, but broader in scope, especially including the creative process and product.

    Steve
  • Posted on 4/25/2009 at 10:58 AM Author
    Thanks a lot everyone for your quick responses. I really appreciate all who took out time to pour in their views and comments.

    I got lots of ideas for thought and most important where to start from.
    I am doing some research on Brand valuation and alike stuff, if I come across anything interesting related our discussion would share with all.
    I would still like to see some more views on it so keeping the discussion open for a couple of more days.

    Thanks everyone once again.
    Anshita
  • Posted by Levon on 4/26/2009 at 11:33 AM Member
    An agency is as only good as the talent that the agency possesses.
  • Posted on 4/29/2009 at 7:32 AM Author
    Thanks again to all!!
    I am closing the question now, thought of sharing some of my views in addition to all the above posts which I used during my discussion.
    Anshita

    "I agree that advertising agencies will live on for the foreseeable future, at least in function, although they probably might be called something different to reflect a new business model.
    The commoditization of the agencies have to be done to be seen as partners and not as vendors managing firms/or providing some kind of customized solutions per problem basis. They have to figure out multiple ways to generate business models and have better revenues.
    The key is to find out how to quantify the advertising’s contribution to brand and business value. One of the solutions may be to use Brand valuation for both to win pitches and in on-going brand management.
    At the same time, internally agencies should give the freedom to enhance, strengthen and motivate the people resulting in increased productivity. It is important that agency uses the technology that they are recommending.
    The future lies in diversification: budgeting/staff/ process/ leadership as in expand, test, try, explore, alter, and evolve.
    The industry need to prove relevance and expertise; appreciate alternate paths to success, hire multi-dimensional talent, encouraging collaborative innovation, embracing fearlessness and to believe that they can."
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