Consumer relationships key to future agency success

LONDON - Agencies will have to evolve from pushing advertising campaigns to nurturing communities of consumers and matchmaking them with brands, a new research report predicts.

The report from Forrester Research argues that traditional advertising and media agencies will give way within five years to a new breed of agencies with greater data analytics and planning skills.

Industry relationships may even change to the extent that instead of pitching for a brand's business, agencies may 'sell' access to groups of consumers in whose interests they learn to act.

The report was co-authored by Mary Beth Kemp, who has worked for both clients and agencies during a 20-year career in marketing, and Pete Kim. It was based on conversations with marketers from Coca-Cola, Procter & Gamble and HSBC and with agency bosses from WPP Group, Publicis Groupe and Omnicom.

Speaking to Brand Republic ahead of its publication, Kemp said she could not cite any current examples of agencies working the way the report predicts they will.

However, emerging trends such as social networking, word of mouth marketing and agencies harnessing user-generated content are leading down the road to the new-look agency-consumer-brand relationship.

Meanwhile, the decline of mass audiences and the increasing ability of consumers to share knowledge are causing problems for the traditional set-up.

Kemp said: "Creative and media agencies are pretty much stuck in the mass media world, which is normal because they are optimised for it."

The successful agency of the future will have learned to connect itself with defined communities of consumers and cultivate insights into their behaviour.

Mass communities such as Facebook will evolve into more selective groups, which agencies will help by funding them and helping them share information.

Such communities could be formed not just online, but also offline, with Kemp providing the example of an agency funding a community hall.

Account people will evolve into "community managers", who will help the community sell itself to certain brands.

"The agency would know which brand would be best to let in, which brands should be kept out, and what information can be shared and with whom it can be shared," Kemp said.

The focus on passing information on to selected brands will boost agency demand for specialists in data analytics and insight. While salaries will increase, work will also be outsourced to cheaper countries such as India and China.

Creatives will still be important, but will work less on one-way campaigns to a mass audience than on "ongoing dialogues" with individuals. Talent will also come from outside the agency, as consumers take a greater role in content creation.

Kemp foresees the production process will also become globalised as agencies build supply chains similar to those used today by carmakers PC manufacturer Dell.

Media companies will try to compete with agencies in catering for consumer groups, she believes, acknowledging that newspaper websites and in particular Times Online are already thinking that way.

However, she expects it will be difficult for them to adjust their traditional mass audience business model and their role will be mainly as content supplier.

I think the agencies will work with the media to source the content which is most valuable for their particular audiences and they will end up paying for that to be fed to their community."

The report is titled 'The Connected Agency: Marketers partner with agencies who listen instead of shout' and will be available shortly from Forrester.