Reinventing the agency model

Anyone who has spent any time on this blog will know I think the traditional agency model is broken.
Being a factory dedicated to producing 30 second commercials, websites, banners and buttons or mail packs is not a viable business in an age where consumers are AdAvoiders and media is evolving so fast.
So when Forrester produce a new report ( register and you should get a free copy free copies are all gone its now $279 - money well spent) saying agencies have to embrace and facilitate communities if they are to survive, I'm really interested. The main premise of the report is that agencies will need to be able to connect their brands with appropriate communities - and that the best way to do that is by becoming an integral part of those. communities

Peter Kim (one of the authors) says "I don't think agencies are going away,"  "They're going to be the ones that help marketers to communities of mutual interest."

I think this is right on the money and picks up on thinking from one of my favourite books - Net Gain by John Hagel. Written in 1997 Hagel sees that facilitating communities of interest and then finding appropriate products and services for them is a very interesting business model. Saga is probably the best example of this is Europe; they attracted a huge proportion of baby boomers and go out and find products the community want - resulting in a  business worth $5billion.
It's a good report and makes lots of sense. And I have a lot of time for Forrester and particularly Peter Kim, whose blog I read regularly. But I'm a little surprised they didn't talk to any media agencies in their research (the companies interviewed include HSBC (a MindShare client) and a number of our WPP friends - Y&R, RMG, Wunderman and Ogilvy).
Smart media agencies are much closer to being able to recognise this sort of radical future and evolve towards it. They have both the relationships (strong ties with the media owners and content producers that will fuel these communities) and the scale needed to make this transition.
When I made the decision to switch back to media, after a dozen years running digital creative agencies, I was a bit concerned about culture shock, yet the sheer energy and ambition of MindShare dwarfs that of any other agency I know.
For example, on Saturday morning, getting off a plane, I ran into an old friend now representing some of the biggest shows on US TV - he told me that of the 6 integrations they were considering for one new show, 5 were proposals from MindShare. We create award winning  creative campaigns and help brands understand the value of their marketing spend
In the last year we've bought (through GroupM) two agencies who really get social media (M80 in LA and LaComunicad in Amsterdam) and are partnering WPP investments in this space such as VideoEgg, LiveWorld and Visible Technologies. We've hired a whole bunch of smart people from outside media to help evolve the agency and recently bought probably the best digital agency in the world  - Schematic
So whilst not wanting to turn this into a puff piece for my company, I do think its hard to consider the future of the agency business without recognising that the media agencies (or at least some of them) are driving real change for their clients.
Like everyone else we have a legacy business that is still pretty traditional (and throws off the cash to allow for the necessary investment) but I do think we're more open to the new future of the connected agency than most others. And we're very focused on getting there.
I'm not sure we're in a race here, but we all need to keep evolving if we are to keep our skills relevant to the new marketing world.

Comments

[Peter Kim]

Hi Simon - good point, the research could have been stronger with more media agency input. We did speak with people at the holding company level (WPP, Omnicom, MDC and others off the record) who addressed the role of their media units, but not the same as a direct conversation. The same could be said for PR - while I spoke to quite a few practitioners along the way, none were interviewed explicitly for the report. I have to keep you in mind for the next report (will email you directly).

Also, if anyone wants to read the report, the link is (requires registration): http://www.forrester.com/connectedagency (be warned, you'll be f2f with a super-sized pic of me!)

[Simon Andrews]

Thanks Peter - its a really interesting piece of thinking - you have sparked a really worthwhile debate.

[Mikej]

I suppose its interesting because from an media agency group perspective there has been no exact way to deliver and make money from communities.. YET. Its more on the ground level that some interesting things are happening.... and media agencies / digital agencies are leading the way.
This is because they have media great insight into communities (not just because most of them are on facebook). But because the data and targeting is not too similar to what we have done previously making mass media more targeted. Its just evolving to much richer and small groups. This has also lead the supposed number crunchers(Media) into a more idea driven creative role.... because creative agencies dont get it.
Its a great time to be in media if you ask me

nice post,thanks simon

[Simon Andrews]

It is a great time to be in media - and a bad time to be in a creative agency

[Eamon]

This is a really interesting post and a really big subject.

I think that traditional creative work will always be important because there will always be brands that rest on it, i.e: perfume brands, Guinness, and so on.
But certainly usefulness / offering services is becoming more and more important.
I, also, think that traditional creative people have an important role in working with digital people to create new technologies and services that will be relevant and valuable - services and technologies that will, also, be interesting.

[sean]

Interesting post. Media definitely plays a big role in New Marketing. But in my opinion, with increasing fragmentation, nothing plays a bigger role than product. Hence the agency Farm System...

http://hernaturehisnurture.wordpress.com/2008/08/25/the-agencys-farm-team/