This story was written by David Kaplan.
Even before the ad recession began worsening with the financial chaos of the past few weeks, the hand-wringing over traditional agencies position amid the growing demand for digital practices has been a constant refrain at ad conferences for the past decade. As moderator of an afternoon panel at the Ad:Tech NY conference, WSJ's Suzanne Vranica tried a "let's settle this once and for all" approach, but ad execs resisted saying this debate will simply continue.
-- The dirty word: rebundling: On the issue of integrating the traditional and digital sides, Vranica asked if marketers will force the hand of agencies and ask them to cobble the various partsmedia buying, creative, digital, PR, etc..together as some of those disciplines were 20 years ago? Nancy Hill, president and CEO of the American Association of Advertising Agencies, said it was unlikely since clients are having their own issues with integration. Hill: Every client has a different model within their own structures and their own definition of integration. So we will continue to have this debate. She added later that the compensation model among the digital and traditional agencies have to change. Getting to a place where it's value pricing and not commission based, that is the right way to go. We don't buy and create media the way we used to, so the 15 percent cut doesn't really apply to this day and age. But as I said, there are different clients with different models still out there. More after the jump.
-- The talent issue: On the matter of matching the various skills sets on the traditional side and the digital side Hill noted the dichotomy between the two: Despite a bad economy, digital agencies are still hiring and they're growing despite the lack of talent. The traditional agencies don't have a hold on the zeitgeist, except for Mad Men, but that was a different time. Sean Finnegan, president, chief digital officer of Starcom MediaVest Group: "People that are 15-, 25 years in the business are making the switch and adapting to digital. Smart agencies are courting those people and training them, because they bring a lot of intangible assets to the digital side." CEO, AKQA Tom Bedacarre: "We have a double challenge, as companies are trying to hire from our ranks. The answer is to bring young people who will fight against the usual way we've done things."
By David Kaplan