Agencies position for the rebound

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Kanarick believes that agencies must move past what he sees as an outdated traditional customer purchase cycle of awareness, interest, desire and action.

“Agencies can no longer map to that continuum of customers in a linear baton-passing progression,” he explains. “Today, the rapid rise of social media and multitasking of consumers [means] a customer can view an ad on TV, purchase from a website and speak with someone in sales or services all in a few minutes. If you're an agency that can handle that, the sky's the limit. Without those skills ,it might be a real struggle. ”

The innovation necessary to keep an agency relevant extends to how agencies manage their people and creative processes.

“Agencies are bastions of creativity in the business world, but when that creativity is applied to their own companies, it has been less effective,” Kanarick continues. “The structure needs to be much more collaborative and interoperable.”

For example, as campaigns become more integrated in their approach, so must account teams. Catalyst restructured to break down silos between traditional and digital teams, with all creative team members reporting to Peter Platt, who was named the agency's first chief digital officer last October.

CRM agency Merkle also cites a flexible agency structure as key to success. The agency merged its traditional and digital teams two years ago, according to CMO Craig Dempster, and recently hired its first chief creative officer.

“Direct marketing is about changing consumer behavior, so effective targeting through information technology and analytics are crucial, but the right creative and right messaging are also critical, so if you're going to change consumer behavior, you have to do both,” Dempster said.

Despite the need to push the envelope in communications, top agencies know that smart marketing is not about innovating simply for innovation's sake.

In her keynote at April's Ad:tech conference, Kristi VandenBosch, CEO of Publicis & Hal Riney cautioned, “You are not creating campaigns to prove that you get digital. It should be about creating good work and tapping different resources depending on what works best for the campaign.”

Shulman agrees, saying innovation and ROI are not mutually exclusive, but can instead work in tandem to best reach target audiences.

“The question is not about a mobile plan or platform,” he says. “It's about our always-on culture and providing contextually relevant communications at the right time and right place where consumers are.

“A lot of buzz topics like social media appeared on everyone's agenda in 2009,” he continues. “2010 is when we can start understanding where those types of meaningful investments will be.”

Gwaltney suggests that maintaining a broad perspective will continue to be critical to understanding how agencies should communicate with both clients and audiences.

“Doing the same thing over time will decline,” she says. “You need to not only meet business objectives, but also set up tests along the way, and understand that finding out what doesn't work can be just as valuable as finding what does work.”

Regardless of the direction agencies choose this year, firm leaders know they need to be ready for continued change.

“The past three to five years have seen a monumental amount of change. As we look ahead, it's safe to assume the next five years of change are going to eclipse the change we had in the previous 50,” Kanarick says.

“In five years, are clients and marketers going to make a distinction between advertising and interactive advertising?” he asks. “Probably not.”
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