I've been learning a lot about this space lately and figure that some people here may have worked in it. Is what I'm seeing correct?<p>I think the traditional advertising holding companies are structurally broken. Particularly those that have been unable to make acquisitions of digital agencies. Ad companies have been turned on their head - they were put together in order to provide economies of scale on purchasing for media that gave scale (e.g., TV). Digital is the exact opposite - it is fragmented and targeted. It doesn't lend itself to the way holding companies are set up. <p>Technological expertise combined with global delivery and creative talent is what matters - not fiefdoms of agencies whose big pitch is creative with the benefit of purchasing at scale. Moreover, digital removes a great deal of inefficiency from the marketplace so the overall ad pie is shrinking.
They are absolutely broken. Most (digital) agencies spend large amounts of their clients' money without delivering measurable, trackable results, or anything beyond a vague sense of "branding".
In fact, in my work, I've found that most of the reason for rising CPMs for banner buys is agencies driving up prices to unsustainable levels- it's like another bubble waiting to burst.
Traditional advertising agencies are definitely behind the times and are still using outdated models. In fact, if you study marketing at a college/university, by the time you graduate a good lot of the information you've learned has changed significantly.<p>However, despite their laggard tendencies, most advertising (non-digital) is still being done this way. Brand and marketing managers are also partially to blame because they're acquiescent with the status quo.<p>I disagree with the comment about digital agencies not delivering analytical reporting. Not in South African at any rate. Here, the market is ruled by a handful of large agencies, all of which provide measurable results. I'm certain that all the worthwhile agencies in the US do the same.
YES! and they have been for a long time.
Suggest reading: <a href="<a href="http://www.amazon.com/Gonzo-Marketing-Winning-Through-Practices/dp/0738204080>Gonzo" rel="nofollow">http://www.amazon.com/Gonzo-Marketing-Winning-Through-Practi...</a> Marketing</a><p>But of course, the big accounts only want to deal with the big agencies. So the smaller, really creative outfits only survive if they have a couple people on the board who come from the big end of town. Going after small business is just as (if not more) time consuming and the payback is far smaller too. Selling is the biggest chunk of effort and costs. Creativity is the fun part but the very poor cousin.