There’s no easy way to say it. The traditional Ad Agency is not going to stay around for long. As the big guys scramble to survive and as the little guys close shop, marketing agencies find themselves in a major shift. Some believe it’s a difficult transition, if not an impossible one under the current way most of these shops are setup.

In order to survive agencies must:

Stop being dependent on the 15% media buying revenue and print markup.  The days of clients spending hundreds of thousands, sometimes millions of dollars on traditional media are numbered. The new media mix is a lot more fluid and fragmented and requires more thinking than a media buyer can do in one afternoon. A direct mail campaign followed by radio and/or TV is no longer the answer for every problem. I’m not certain it’s the answer for any current dilemma.

Make technology a core value not an outsourced commodity. You cannot outsource the very core of the way people communicate, otherwise you have nothing unique to offer. Technology and communication are synonymous. If you don’t understand the technology and how to adapt it, you cannot be flexible enough and fast enough to evolve.

Must figure out Social Media and how to quantify results in that space. Even the most skeptical cannot argue with the explosion of the social networks and their tremendous impact in the way we communicate. What they can argue, however, is how effective social media really as a return on investment. New measuring tools, and smart strategies are helping marketers to put real numbers behind social media campaigns, but there’s a lot of ambiguity and among the many self-proclaimed “experts” on the subject.

These are my three big shifts. I’m sure there are a lot of others that I’m not mentioning.

In your opining, what other changes a marketing firm must make to continue to be relevant to its clients?