Will Advertising Agencies Go the Way of the Newspaper Industry?

The newspaper industry is trapped in a collapsing business model. This is well documented. Technology has forced an evolution of a once solid business model that lastest a couple hundred years. Media companies are all seeking new and sustainable business model and in an increasingly fragmented and specialized marketplace where barriers to entry have been virtually eliminated.

Used to be only those with a printing press could publish. That was a pretty high barrier to entry. In fact, the web has allowed anyone with access to the Internet to be a "journalist." Many will argue about the quality of information being purpogating across the internet by professional and amateur writers. But technology has democratized publishing.

In the analog age, there were real barriers to gathering and reporting news: staff, print or broadcast capabilities, foreign bureaus, telecommunications costs, etc.



So what about Advertising Agencies? Why do we need them? And has the ditigal world changed the business model?

Agencies have always been a place to find bright, creative and strategic thinkers. You go to the full service agency to help develop you marketing strategy -- everything from value proposition to advertising campaign to media buys. And it used to be that the national firms were located in NY and each major city would have a few good firms. This is where talented people would go to find work.

But technology is blowing the model apart. Now, it doesn't matter where the client or the talened ad execs are located. You can see and talk to the client daily on your computer. You can create a virtual creative team.

And when a 22 year old can edit video on his MacBook Pro in his mother's basement, it is hard to understand why you need all the infrastructure and overhead of a large firm.

Watch the revenues of the major ad conglomorates over the next few years. I predict continued downward revenue lines. Lets see how they adapt.