Friday, January 7, 2011

Future of ad agencies?

It's been on my mind a lot recently. What is the future of advertising agencies? We still need agencies to make ads. Especially good ads. Like this one. Or this masterpiece. And if you believe that advertising cannot drive profitable growth, spend a few minutes enjoying this.

That is not what's on my mind. No, rather, it is the business model I wonder about.

There was a time when there was a distinction between the advertising, direct marketing, promotional, digital and PR agencies. Not these days. If you are doing an email campaign directing folks back to a landing page, with maybe some online PR linked driving people to Like us on facebook - who gets the work? The digital agency? The direct marketing? PR firm? The ad agency?

And where is the profit on these? In the past, perhaps you could pay some agency wages from selling in a microsite? Especially if the marketing folk don't have control of the big corporate website. But no need for one of those. A wordpress blog page will do or a facebook page. But you won't make much margin creating one of these.

If you're a fan of Helge Tenno, you're probably of the view that digital is less about what brands say. It is more about doing stuff that creates value in our lives, often offline. Like Couchsurfing (something I admit I find just fascinating, although not sure it's for me).

So surely producing digital stuff that makes our customers' lives better is worth paying for? Like a useful app or something. Yes, but for some reason, we kinda feel anything internet-related should be cheaper. We've got used to a google-docs, youtube view of the world - the internet wants and deserves to be free attitude, including apps.

Throw in some serious cheap ways for clients to outsource creative, design and development - (yes, the world really is flat) and there goes the bread and butter work too.

I don't have answers. But guessing I'm not the only person asking these questions.

P.S. I read a very interesting book a few years ago about future of agencies called Space Race.

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Majority of agencies use micro web sites for advertising. I think Facebook and microsites are two important ways of advertising in future.

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