A recent survey by the CMO Council found that only "9% of senior-level marketers say traditional ad agencies are doing a good job of evolving and extending service capabilities in the digital age."

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That is troubling, and not a little bit strange, because, as we learned in a study by IBM last year, "79% of CMOs expect a high or very high level of marketing complexity over the next five years, but only 48% say they feel prepared to cope with it."

In other words, senior-level marketers need help and they don't seem to believe that their traditional partners can provide the help they need. So, who can?

One answer may be the agencies that today call themselves "digital," and particularly those that, like the agency led by this week's guest on Marketing Smarts, place "social media at the core" of everything they do.

"The CMO's job is harder than it's ever been," Glenn Engler, CEO of Digital Influence Group, told me, "It's a really complex media and marketing landscape... and every agency wants to be a key adviser."

So how does an agency demonstrate that it "gets" digital and move into that key advisory role?

Well, paradoxically, it doesn't start with the technology; it starts with understanding the client's business problem and then, thanks to a thorough knowledge of what's possible, applying the appropriate technology to solve the problem. As an example, in the podcast Glenn describes the work his agency has done for Glidden Paint.

Glidden Paint is sold in Home Depot stores across the country, which means, among other things, that Glidden has to compete with Home Depot's in-store brands. If people walk into a Home Depot and start asking about paints, they'll be directed to those in-store brands. The challenge Glidden faced was this: How do I get people to walk into the store and ask for or seek out my paint specifically?

The solution devised by Digital Influence Group had two aspects, one technical and one social, both relying on a critical insight: Usually, a catalyst—a new sofa, say, or a child going off to college—drives someone's decision to change a room.

On the technical side, Digital Influence Group developed an application that would allow people to take a picture of the room to be repainted, zoom in on the color of a particular part of the room (the new sofa, for example), and then get color recommendations based on that picture. With those recommendations in hand, the customer could walk into any store selling Glidden Paint and ask for the desired color by name.

On the social side, Digital Influence Group realized that, strictly speaking, people don't care about paint as such. What they do care about is improving their living space. To that end, they want ideas about what they can do and advice on doing it well.

Accordingly, "We inserted Glidden very generously into conversations around design [and] sources of inspiration," Glenn explains.

How? By creating a site—"powered by Glidden"—called My Colortopia—where noted bloggers in the DIY home improvement space (folks sourced by Digital Influence Group) could share their thoughts and experience and where visitors could access the color tool described above.

The key here wasn't to enter the conversation around home design with the message, "Hey, come to me because we're a paint," Glenn says. Instead, Glidden entered the conversation by recruiting recognized experts to contribute their expertise in a forum sponsored by Glidden. That way, they didn't just get involved in the conversation, they actually enabled it.

That example illustrates at least one critical way social media has changed the agency/client relationship: It's no longer simply a question of media buys and running clever ads (although those do have a place in the marketing mix); an agency no longer functions simply as an agent making purchases on a client's behalf.

On the contrary, agencies must now help their clients build relationships and engage with the influential people who are already talking to their clients' audiences. By crafting those relationships, and helping clients manage them over time, agencies provide a service that is much more complex and far less transactional.

"Gone are the days where clients don't understand social media and aren't there at all," says Glenn, which means that "every skill set, every area of expertise [in the agency] needs to have the base of social media," not only because clients expect you to be able to do the work but also because they look to their agency to help them navigate what's next.

Social media has, in Glenn's words, "fundamentally changed every aspect of marketing." If agencies want to provide clients with the help and guidance their clients need in this area, then agencies need to fundamentally change as well.

Hear my conversation with Glenn in its entirety, below.

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So, do you think your agency gets social and digital media?

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