There's a revealing article in Advertising Age today that talks about a declining respect for advertising agencies by their clients. Following

the article, the comments from some agency executives show pretty clearly

that many, many marketers and agencies have simply become dinosaurs. CLICK

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For example look at this advice for healing the client/agency relationship: "For marketers this means

getting closer to the sales process, becoming partners in the lead

generation and win conversion process."

Huh??? Where has this guy been the last 5 years? We should get familiar with lead gen discussions?

Marketing is all about lead gen and has been for years. Is it possible

that many agencies haven't been willing to get their hands dirty with

sales and thus lost the respect of clients?

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My marketing career includes working on the client side with agencies that were very hip in

their time, such as Fallon McElligott. The agency business prior to Web

2.0 was heavily dependent on convincing the client that the agency had

exclusivity on the creativity and big ideas that kept the client's image

innovative.

Today, this model is one for the history books. The cost of high quality marketing is declining rapidly due to the

convergence of some amazing new marketing technologies with a highly

talented mobile workforce. Creativity is practically free and CEOs/CMOs

are telling us that they know it. Clients are recognizing this faster

than some agencies…many of whom appear to be in denial. Perhaps this

is a reason for the client's procurement to step in…they know more

about the advertising industry's economics than many of the agencies.

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When an economic sea-change descends on an industry, a successful response

includes a heckuva lot more than adjusting the product line or adding a

specialist in a vertical marketing function such as social networking.

When prices decline, the successful competitor adjusts the entire

business model to recognize and profit from the change. It would seem

that a critical adjustment for agencies is to understand that the supply

of "big ideas" is soaring and that clients may no longer be willing to

pay tens or hundreds of thousands dollars for "Eureka!". Further,

perhaps those clients have decided to hire only those marketing agencies

who are willing to get down in the dirt with them and contribute hugely

to the sales and conversion processes.

My guess is that agencies will start to give away the creativity in order to sell the

execution and measurement will do well. Adjust agency overhead sharply

downward and focus every ounce of executive brainpower on creating

profits for the agency by creating new and better value for the client,

focused on what the client is telling you it needs…better recognition

and use of marketing technology and lower marketing labor costs.

When agencies stop peddling dinosaurs that's when we'll see the

client/agency relationship improve.

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