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 scorcoran@forrester.com.

This blog post comes live from the Forrester Marketing Forum 2010, where the theme is adaptive marketing.  During a break-out session, Forrester Vice President/Principal Analyst Shar VanBoskirk discusses organizing your interactive marketing team to embrace change successfully.

First, she issues a caveat and overriding theme: the wrong priority is to pursue the right organizational structure.  In fact, there is no singularly successful approach.

To set the context, Shar asks, How is interactive changing the way marketing actually functions inside the organization?  She asserts that:

1. Budgets are continuing to shift from traditional to online media. For the first time, growth in online is actually cannibalizing offline as opposed to resulting from organic growth.   Why?  One big reason is that marketers love the accountability of interactive tools.  The recession has moved marketing spend downstream from branding to point-of-sale, performance-based activities — which contributes to the growth of interactive.  In fact, by 2014, more than 20 percent of all advertising will go digital. We’re also seeing a decline in advertising overall.  Dollars are going into more efficient interactive channels and marketing investments like innovation, research, customer service, and marketing-specific technology.

2. Social media is transforming customer relationships.  This change, well documented elsewhere, affects your organization. Consumers expect to have interactive relationships with their favorite brands via many, many social channels like blogs and online discussion forums — and consumers want the brand to talk back.  Insights from social channels can inform PR, customer service, interactive marketing, and customer intelligence.  And interactive can play a much bigger role harnessing the power of social.

3. Bid-based audience targeting is redefining media buying.  We’re seeing a greater proliferation of media impressions. You can buy advertising on someone’s flickr page.  And quality of data is improving.  There is also increasing competition for search-based ads.  The result is the advent of the demand-side platform — a buy-side tool that helps media buyers aggregate, bid on, and optimize display inventory across exchanges, yield management networks, and ad networks.

4. We’re seeing the emergence of the Splinternet, a new era of the Internet in which devices proliferate and social online experiences live behind a user log-in. Devices control the interactive environment, forcing marketers to figure out how to distribute content more effectively across devices.

But along with digital catalysts are some challenges.  For instance, marketers are operating with leaner staff.  Interactive teams are too often being pushed into tactical mode.  Teams are not comprehensive. Interactive teams are not necessarily equipped with skills to manage interactive marketing.  And tensions abound between interactive marketing and other departments like information technology.

Shar believes no organizational model addresses the challenges facing interactive marketing teams.  She believes the real challenge is preparing your team for “interactive maturity.”  Interactive teams need to support existing business functions.  They need to spread their interactive DNA to other groups.  They need to define interactive job descriptions and career paths.  Interactive teams must mature by establishing interactive program standards. And interactive teams should use their insights to inform offline marketing.

She believes interactive organizations should mature along a spectrum. Less-mature organizations use a “scattered” model whereby teams lack a champion and clear role.  More mature organizations use a centralized interactive team that supports brand groups, product groups, or business units — akin to a service bureau.  (Another related model is the eCommerce alignment model, in which the interactive team’s primary focus is driving online sales.)

Shar believes organizations need to mature to a distributed model — meaning that you distribute your digital marketingresources into the different business functions you support.  This is not an ad-hoc scattered model but rather a more thoughtful way to support different parts of the organization.  The distributed model is a way for marketers to share their DNA throughout the organization.  The model aligns the business, customer, and channel more effectively.

An example: Newell Rubbermaid.  Prior to 2007, Newell Rubbermaid had different interactive strategies and sites for its 30 different brands.  Newell Rubbermaid moved to a centralized model to create an enterprisewide strategy, common Web platform, and standard channel processes.  The company hired an executive to focus on e-business and interactive marketing, reporting to the CIO with a dotted line relationship to the VP of marketing.

Newell Rubbermaid also elected to use interactive marketing to support branding and commerce goals.  Moreover, the interactive marketing team shares costs and accountability with the brands.  The team also trains others across the company on interactive marketing.  Newell Rubbermaid has also standardized interactive team roles.

Another example: Meijer wanted to reposition its stores and brand against increased competition in core markets and declining consumer spend due to the recession.  The solution: Meijer moved interactive marketing from e-commerce into a cross-channel media team that supports loyalty, brand engagement, community, and online/offline sales.

Meijer also uses interactive to support multiple goals and organizes to support functions, not channels.  Meijer also uses digital insights to inform offline media strategies.

For more insight, contact Shar at svanboskirk@forrester.com

This blog post comes to you live from the Forrester Marketing Forum 2010, where the theme is the need for marketers to adapt constantly.  During a lively presentation, Forrester Research CEO George Colony asks a simple but provocative question: should CEOs embrace social media?

George indicates that Forrester studied the habits of the top 100 CEOs and found almost none of them are active users of social media.  This is true even among high-tech CEOs like Steve Jobs and Larry Ellison.  Even Mark Zuckerberg does not blog.  He asks, why are CEOs not social?  Many reasons:

1. For many, age is a factor.  Many CEOs were born before 1950 and simply do not relate to social media as a form of communication.

2. They have distinct constraints.  If  they run a publicly traded company, they need to follow regulatory constraints.

3. Many are risk-averse.  They might be quite justifiably risk-averse to potential litigation, for instance.

4. CEOs have a different sense of time. For them, embracing social with any level of commitment means carving out time they don’t have.  Seth Godin blogs 12 hours a week.  How many CEOs have time to blog even 1 hour a week?

5. There might be a mis-match to the medium going on. How many CEOs are willing to make six public statements per day via Twitter or one major statement a week via a blog? And how many are willing to adapt the provocative style that is often needed to blog successfully? How many CEOs are willing to be transparent?

George asserts that only a limited number of people can really succeed with social.  How many of us — whether CEOs or not — can really embrace social with consistently high-quality content? Today Einstein would have been a poor match for blogging, for instance.

Should CEOs be social?  Yes, if:

1. The CEO has something valuable to say.

2. She can navigate the minefield of constraints and restrictions.

3. Customers, employees, partners, and investors, are actually tuned into the CEO.

4. The CEO accepts a new construct of social.

And does the CEO really have the desire?  If the answer is no, then accept that reality. The CEO has to be the right person for blogging.

If your CEO is onboard to actually embrace social, then the marketer needs to support the CEO with well-researched insights into how one’s potential audience actually engages in social.  In other words, know your audience. Employ approaches like the Forrester POST Method. For instance, give your CEO objectives for participating in the social world — for instance, is simply becoming a better listener all that matters to your CEO?  (In that case, using Twitter to remain engaged might be a better approach to attempting to blog.)

George also says a new construct of social is needed to empower the CEO. For instance, it’s time to stop thinking of “social heavy” and start embracing “social light.”  Social heavy is all about a frantic race to get the most Twitter followers.  Social light means a social profile that stresses quality over quantity.  Think of social as a way to share your corporate values, not to chase followers.

And be choosy. George believes that Facebook is just too personal for CEOs to use as their social platform.

But, the new construct does not mean asking your marketing or PR team to blog for you.  Marketing and PR can and should be the coaches helping CEOs embrace social, but not the do-ers.  One thing has not changed about social: the need to be authentic, writing in your own voice.  Not ready to do that?  Then forget being social.

Get to know George on Twitter and on his blog.