This blog post comes to you from the Forrester Marketing Forum 2010, where the theme is adaptive marketing. During a break-out, Analyst Sean Corcoran discusses the changing agency-client relationship.
Sean asserts that the 20th-century agency model is dying. Agencies focused on one-way advertising are passing away in an era when marketing has become tantamount to a two-way customer experience. That said, history has shown agencies have always adapted, such as the transition from print-based to TV-driven advertising.
And agencies are now entering an era of adaptive marketing — a time in which consumers are empowered, social media is mainstream, and marketing has evolved from push- to pull-focused. During the adaptive marketing era, marketers are taking advantage of media addressability and more effective data-driven decision making. According to Larry Flanagan, CMO of MasterCard, “We are moving from decades of push strategy to a more holistic 360 consumer strategy.”
Agencies are struggling to adapt to this new era for many reasons. Among them:
1. Agencies are focused on campaigns rather than experiences.
2. They can talk but are not very good at listening.
3. Agencies are build for waterfall approaches to idea development instead of a more iterative approach.
4. Agencies treat customers as audiences rather than participants.
5. They are mostly “unbundled” — creating disparate skill sets.
6. Agencies have trouble mastering many new specialties at once.
7. Co-creation has torn down the creative wall.
8. Agencies have moved down the value chain and rarely distinguish themselves from each other.
9. Agencies can only move as fast as their clients will allow.
Meantime, marketers do not trust traditional agencies with digital, and interactive agencies often struggle to differentiate.
Which is all to say that no type of agency is perfect for the new era. As a marketing leader from a healthcare firm told Forrester, “No one agency does it all well.”
So in an era of adaptive marketing, what do agencies need to do?
First, think of themselves as idea providers — ideas that can drive the creation of great customer experiences. And ideas that are generated in iterative fashion.
Agencies also need to understand that interactions will drive future marketing success. Paid media is shifting from the foundation of campaigns to the catalyst of experiences.
Finally, agencies need to become more intelligent — as in relying more on analytics to drive customer insight.
Among Sean’s predictions are that the interactive agency of record will disappear. Some will become lead agencies; some will continue to be specialists; and others swallowed up by others. So it’s decision time for interactive agencies: become a lead agency or become a specialist.
Meantime if you’re a marketer, Sean says it’s important to get your own adaptive marketing house in order before you think about your agencies, among other recommendations. For more insight, contact Sean on Twitter or firstname.lastname@example.org.