The Death of The Advertising Agency


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.

Death of Advertising Agency

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?

  • Doug Pek

    Great post!

  • Not sure what I would add…think you covered it. 

    The challenge is that due to amazing technology, companies like mine can hire 1 great marketing person who can create, execute and maximize ad dollars. 

    Who needs a firm unless you are running a SuperBowl ad? or a Presidential Campaign 🙂

    I also see a lot of companies relying more and more on grass roots types of campaigns that can yield a lot of return on the investment.

    Great post as always.

    • When you have a multiple prong, large campaign you might need a good advertising firm to create a strategy, design and manage the entire thing. However, if they don’t have the digital chops to do it, they’ll become obsolete for sure.

  • Anonymous

    I think your post is relevant for the Ogilvys, Saatchis, TBWA’s and the freelancers as well.

    I’ve seen well known ad agencies (like the Buntin Group in Nashville) create entire divisions that have revolutionized the buyers role.

    I think some get it and some dont.

    Twitter bombs and Facebook Pages are here to stay.

    • I know several agencies in Nashville are struggling to make this shift.

  • You’re dead on. My company started out as a “traditional” ad agency (with a heavy focus on media buying) 10 years ago but I saw the shift coming and quickly moved out of the 15% ad buy dependent model and changed the entire makeup of my business. So glad I did. 

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  • Amre Cortadino

    Hi. Change is the only constant – of that we can be sure. But there is a trend in publishing that seems, well, questionable to me as an author. If I have to pay x amount of dollars to have my book published, then have to buy a percentage of those books and then market the books myself, why not just self-publish and do all the work myself? I also wonder why more publishing firms aren’t advertising that they’re looking for books with movie potential? There are few worthwhile movies coming to theaters, and I think it’s time for authors to grab this opportunity. …just my two cents! 🙂

  • TruthJusticeAmericanWay

    I think the ‘business model’ change (read: entire industry extinction) is merely a symptom of a greater tragedy… The Death of Creativity.

    On the advent of ‘e-z’ sub-par stock graphics, photos, and layout programs, businesses started thinking, “Hey, we’ll just hire a mouse monkey, throw him in the back room with a computer and some stock this or that, and… BOOM! We get our own in house agency for 30K a year and a bad Christmas party. Who needs to hire an agency at 500K +

    Bottom line beat out the Art of Advertising Creativity in the wink of an eye. Who needs a clever well-thought ad with a professional writer, a custom photo-shoot, a model, and an illustrator… just get Mongo in the back to make that stock photo fit the VP’s offhanded idea and old Martha the reception gal can proof it.

    Advertising is E Z… any boss’ idiot son can do it. Right?

    But Creativity… the old school, Madison Avenue and Hip Small Shop cleverness that you remember to this day…. gone. Along with society’s sense of humor and irreverence. Gone.

    We shall never see their like again.

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