The agency structure of yesteryear is no longer effective, but what should the new model be? Experts discuss needs and challenges.

Out of the ashes rises the phoenix.

That's what came to my mind when listening to Paul Ratzky, engagement planning director for Team One/Saatchi, moderate a panel discussion on the new agency model in automotive marketing at iMedia's Driving Interactive.

"Among chaos, the traditional agency model is blowing up," he said. "But we're not sure yet what the new model will be."

There is no question that with media channels and communications no longer separate and disjointed, agencies can't afford to be remain siloed. Plus, the powerful emergence of user-generated content and social networks means marketers must now talk with customers in new ways, which involves all communication disciplines -- digital and traditional marketing applications, PR, customer service, etc.

So what's an agency to do?

Bethany R. Mach, SVP, director of digital communications investment planning for Mindshare, offers one solution: Team Detroit.

Team Detroit is the official name of the recently formed joint venture comprised of WPP's Detroit-based agencies, including JWT, Y&R, Wunderman, Ogilvy, and Group M media companies Mediaedge and Mindshare.

According to published reports, the WPP agencies restructured their service offerings in Detroit to provide best-in-class talent, easy access and more effective marketing partnerships to its client base in Detroit, the largest of which is Ford Motor Company. Under one roof, but on separate floors, is a consultative group, a content creation unit, an exchange group and a client services team.

"The whole point of Team Detroit is that you have six agencies under one umbrella, each of which still has its core competencies, but all of which work together for the greater good," Mach said. "The world of traditional can't stand that type of pressure -- we have to start looking at alternative ways."

The biggest challenge to creating these alternative ways, according to the panel, is a talent shortage.

"There are lots of talented people in traditional, but whether they have the skill set to transition is questionable and a problem at this point," said Gregory Johns, associate interactive media director for PHD.

But it's not just about training traditional people in the ways of digital. Those who have cut their teeth in new media need educating as well as seamless integration. All disciplines need to speak the same language and understand not just the technology or the media channels in which they dabble, but the fundamentals of marketing as well.

Johns suggested rotating people through various job functions to broaden expertise across the board. Mach said there are many people at Team Detroit who have switched places from traditional to digital and vice versa.

Such cross training could result in an industry of generalists, Ratzky said. "Is that necessarily a good thing, or do we still need specialists?" he asked the other panelists.

He got a resounding "sort of" response. Everyone does need to be a generalist, the group agreed, but an agency also needs to build expertise within its ranks.

For example, Fred Sattler, EVP, managing director for Initiative+, said that although a media agency wouldn't do creative work, it should develop an asset management strategy so its planners know if there are videos that can be re-cut, etc. And Johns said he felt that an agency should have search expertise because all media will one day be bought this way.

"An agency shouldn't bite off more than it can chew," Sattler said. "If you don't have the skills, don't fake it."

The difficult part in all of this is determining who takes on what roles as agencies become less siloed and as new channels emerge and evolve. Take social media, for example. Who should be the one figuring out how to infiltrate MySpace, and who should be corresponding with consumers who blog or post about your client's product?

Part of that is answered by whoever steps up, said Todd Riley, VP digital director for GM Planworks. "It's the person who wants to keep learning, wants to get down and dirty and really understand this stuff," he said.

Others on the panel felt that PR will need to play a greater role as social media gains more ground, but that requires a seismic attitudinal shift.

"How PR has worked for years is that it's all about distributing communications," Johns said. "That flies in the face of social media, where communication is open, and you have to put your helmet on and participate. Some people in PR get it, some don't."

What everyone gets is that most roles will need to change. But at the end of this particular conversation, the vision of the phoenix still seemed blurred. As Johns put it, however, at least the objectives are clear: Move away from media discipline and strategy functions and toward a focus on solving marketing objectives. How to get there, though, remains to be seen.

Dawn Anfuso is senior editor for iMedia Connection.