How do the ad agencies interact with these in-house ad firms, and is it somewhat awkward?

Roell: This depends on the clients' needs. In many cases, ad agencies had to work with in-house ad firms, mostly for execution on an in-house company's campaign-specific needs. So, here the ad agency was the lead on the strategic side and the in-house ad firm simply executed for a particular placement. These new forms of in-house ad agencies compete directly with outside ad agencies, so there are situations where ad agencies have to work side by side with in-house ad firms and both of them have a strategic relationship with the client. So it comes down to what is everyone's responsibility, and the most significant factor for success of a campaign relies on the client who has to steer multiple ad agencies and make sure everyone plays nice in the sandbox and provides the specific services they were hired for.

Hamill:There can be some awkward moments as competing agendas work together, but generally a client whom everyone would like to please is leading the projects. In the unbundled agency world it is not an uncommon practice.

Miller: We act as both client and agency so it's not awkward. We will go outside to vendors, boutique agencies to supplement internal creative work. But if the creative work isn't good, the savings doesn't matter. On the flip side, if we're not on message and distinctive, we'll look outside for fresh, creative thinking.

Are there any inherent advantages for publishers and other companies to utilize this concept?

Roell: The biggest advantages for them are to expand their revenue opportunity beyond just their publisher services and have the ability to tap into revenue that goes across the entire ad relationship with the client. The other portion is that it provides a publisher the ability to elevate its relationship from a tactical, publisher-specific type to a more strategic, cross-campaign type of relationship. These relationships tend to be deeper and tend to have the ability to steer a client in a certain direction, which may well be redirecting the client into the other part of their businesses, which is the original publisher-side of the business.

Hamill: I think the big advantage is putting your fate in your own hands. The thirst for accountability in marketing puts pressure on all parts of the system. By creating and executing a custom program for the client, the publisher is using its own knowledge and best strengths to produce effective results. Additionally, there is great benefit overall to becoming a closer partner with your best accounts.

Miller: Since we have multiple businesses, it makes sense for us. We don't do our own media buying but do planning. Also, when an advertiser wants to come in and embrace a show and utilize our content, we have done work for clients that a regular ad agency may not want to get fully involved with. As an example, for "Kidnapped" we created some special scenes for KFC.

How will agencies change tactics/adapt to this emerging trend?

Roell: For once, we have already seen that agencies (i.e. WPP acquiring 24/7 Real Media) are fighting back, by going right into the heart of publishers and purchasing publisher outlets or distribution channels themselves. Now they are already in the position to have a strategic relationship and are providing clients with a cost-effective proprietary advertising network. One way to combat this is by going up-stream and internalizing your own media placement or media distribution channel. The other way ad agencies are fighting back is by taking advantage of what they are good at: client relationships, strategic consulting and strategic guidance that are clearly focused on providing objective decisions.

Hamill: The agency business seems to be very cyclical in nature. If clients believe that their media partners are doing a better job of connecting with consumers I suspect that agencies will adjust and compete.

Miller: Having an in-house ad agency doesn't really challenge an established outside agency. The latter should understand the benefits since they speak the same language. As an example, we often help our outside agencies in coordinating celebrity endorsements and other tasks that they might have difficulty in completing on their own.

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Neal Leavitt is president of Fallbrook, CA-based Leavitt Communications, an international marketing communications company with affiliates in Brazil, France, Germany, Hong Kong, India, and the United Kingdom. Read full bio.