In Focus

Is It Too Late for Traditional Agencies?

Problem #1: The behemoth issue

Whether it's Ogilvy, Deutsch or Y&R, the agenda is huge. The numbers and revenue goals come from a holding company. Venture capital is most likely not funding risky new projects or business models. And trying to coordinate TV production with interactive creative and then some kind of word-of-mouth effort or public relations is tougher still. Marshalling all the resources within any huge holding company can be difficult at best.

"Agencies have just made it too darn difficult to do business," says Jim Schroer, CEO of Carlson Marketing and former Chrysler marketing chief.

Schroer and others have pointed out that traditional agencies have a difficult time attending to campaigns that lack a considerable network TV component. Only the kinds of revenue available from producing and placing 30-second spots can make a dent in the revenue expectations that big agencies have. Smaller interactive agencies are built for, and staffed for, smaller overall revenue projects. Word-of-mouth agencies are built for the same.

"I would suggest, with all due respect to a great media thinker, that the medium is no longer the message," says Schroer. "The customer has become the media and the customer is dominating the message. The customer either opts-in to a dialogue with you or opts-out and you are spam-blocked or TiVo'd. This brings about some revolutionary changes for all of us, and it stretches the TV spot on that rack just a little more. One-way media is out. Two-way media is in. Two-way media is a relationship, and like any relationship it requires communication. It requires a dialogue."

One of the most telling signs that huge established agencies and their holding companies are understanding that their size might matter is in their investments. SpotRunner -- which is a one-stop online shop for low-cost 30-second ads that can be customized for the client at a fraction of the standard agency production ticket -- has its development money from CBS, Interpublic and WPP.

 

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