The new agency model is being influenced by the methods used by publishers and ad networks. Here's what those methods are teaching them about optimization, algorithms and how to manage large-scale databases.

In light of continued economic uncertainty and the migration from traditional to digital media, the agency model of tomorrow will require a strategic evolution in order to successfully integrate consumer insights with intuitive hyper-targeting and ensure value for the consumer and advertiser.

Sound simple? Not so, according to Don Epperson, CEO of Havas Digital, who said this shift will mean changing the way we currently perceive value. Agencies that succeed in challenging times will need to know how to turn data into information and knowledge.

The agency of the future will act very much like the large and sophisticated ad networks of today, and those agencies that hold a firm stake in tomorrow's digital future will be those with the most reach and data, as well as a common language with publishers. To put it simply, the survival of the fittest will require a mind and business model shift from valuing the quantity of conversions to valuing the quality of conversions.

Epperson said that the fundamentals of how agencies buy and value media are changing dramatically. This growth, in large part, is being influenced by the strategies and methods used by publishers and ad networks, which are teaching agencies about optimization, how to use sophisticated algorithms, how to manage large-scale databases, and how to match the right creative to the right channel.

In 2007, 78 percent of Havas Digital's worldwide spend was with its top 10 publishers, and 26 percent of its worldwide spend was with ad networks.

There are a lot of similarities between the two models, said Epperson, adding that in integrating some of the business strategies of ad networks, Havas has even begun thinking of itself as more of a Platform-A, AOL's integrated digital advertising platform.

"It's a great time to innovate in our industry. Infrastructure is changing and making us more efficient," Epperson said in his opening keynote at the iMedia Agency Summit, during which he expressed his optimism for the future of digital despite the troubled economy.

In many ways, the road to digital's future leads to the simple goal of more efficiently integrating client and agency data, getting a more robust view of what is needed, getting immersed in analytics, and developing a more finite strategy for clients. Key elements in this change include working more directly with the publishers, tapping into their rich databases, and shifting away from the placement level to the impression level.

"We want to think of our agencies as audience aggregators," Epperson said. "Realizing data and insight about the unique user is where we're headed."

And while Epperson was clear in pointing out that Havas does not intend to become an ad network, the business concepts are directly applicable to Havas' business -- and the agency world in general -- and how the next evolution of the agency model will structure itself.

Taking advantage of the networked advertiser is key today, Epperson said. This means planning optimization and buying run-of-networks -- but in a targeted way. It also means trading media in a commoditized way.

Epperson is the brain behind Havas Digital's Artemis, a proprietary marketing communications platform that houses marketing data and the necessary reporting tools to assess the projected success of creative digital strategies. Artemis provides detailed reporting on questions and strategies as abstract as how many impressions are needed to generate a visit to a site, what are the cross-effects between search and ad campaigns, and what portion of traffic from an ad is generated from returning or new customers, to name just a few of its talents.

The Havas vision of what the future agency model looks like requires the industry to:

• Think of our agencies as a network of brands
• Think of our brands as many networks of unique users
• Think of our unique users as individuals to be aggregated
• Think of our agencies as audience aggregators
• Realize that data, insight and ultimately intelligence about a unique user is where we're heading
• Realize that as a trusted partner of advertisers, agencies have a unique source of intelligence that will help us value each and every impression

In order to truly reach this level of sophistication, the interactive agency of the future will need:

• Explicit data ownership guidelines
  
  1) Data owners need to receive fair value
  2) Case studies on who "owns" what "data"
  3) Development of "media" and "data" insertion orders
  
  
• Explicit and discernable user benefits of tracking users
  
  1) The more tracking the less aggregate advertising
  2) The more tracking the more proprietary content
  3) Development of an "implicit contract" with each unique user
  
  
• Explicit and easy-to-understand privacy policies, meaning consumers need to know how their actions are tracked and used to help advertisers

Havas itself is headed in that very direction, and the future is looking bright -- but only for those that embrace the changing needs of the industry and their clients.

"So, why am I saying this?" Epperson asked the iMedia audience. "Because if we as an industry are valuing each impression, we need to give value for each impression -- otherwise the system will break."

Gretchen Hyman is the executive editor for iMedia Connection.