Media Forum: Can agencies adapt to survive?(Industry overview)

Will media agencies meet the challenges of the latest IPA report, Alasdair Reid asks.

Early January is traditionally that time of year when we may take perverse pleasure in scaring ourselves. For many, this results in at least one New Year's resolution; while for a few, it can lead to dangerously foolhardy stunts, like trying to stay sober for the entire month.

There are, of course, other more cerebral forms of self-chastisement You might choose, for instance, to read a new IPA report, published on 2 January and given the rather less than racy title of The Future of Advertising and Agencies: A Ten-Year Perspective.

But don't be misled. The title may lack urgency, but the contents are anything but cosy. This is a good old-fashioned 'adapt or die' wake-up call, evoking as it does a new world order in which traditional advertising agencies (across the whole spectrum, from creative shops to direct and media specialists) will almost certainly see traditional forms of revenue declining as advertising's centre of gravity continues to shift.

Digital is the driver, obviously, and the much talked about rise in importance of phenomena such as 'user-generated content' will, the report predicts, create a crazy mixed-up world in which 'consumers may become channels, advertisers may become suppliers and agencies may become media owners'.

To survive, it concludes, agencies must take on multiple roles - as media brand owners, joint venture partners, content collaborators and programme producers. Are the conclusions sound? And if so, are mainstream media agencies ready to meet the challenge?

Paul Phillips, the managing director of the AAR, isn't sure the world works that way, based on his experiences of what advertisers tend to look for when they are in pitch mode. The reality is that, although agencies of all sorts talk a good game in terms of the spectrum of services they are able to offer, they know that few clients will ever want to appoint them on that basis.