Where do ad and PR Agencies fit in the age of engagement?

Don’t ask — most don’t seem to know. This story from the Black Star Rising blog (the blog of the Black Star photo agency) reveals the changes faced by ad agencies, and how their traditional business model is under pressure:

The advertising community is scared and doing everything it can to delay the inevitable. The goal of agencies is to convince the companies that pay them big bucks to produce major national campaigns that such campaigns are the best way to sell products and services. Unfortunately, the results for dollars spent are in steady decline and companies will only buy this argument so long.

Consider this little story told by Jan Leth, executive creative director of OgilvyInteractive North America. The agency was assigned by Six Flags to do a promotion for the amusement park’s 45th anniversary. “They wanted to give away 45,000 tickets for opening day to drive traffic. So we got a brief to do whatever: ads, microsite, whatever.” While the creative people were trying to plan the project, the creative director went off and posted the ticket giveaway on Craigslist.

“Five hours later, 45,000 tickets were spoken for,” Leth said. “No photo shoot. No after-shoot drinks at Shutters,” and with some irony he continued, “Now, the trick is, how do we get paid?”

Nobody’s going to pay an agency big dollars to post ads on Craigslist. And imagine what could have happened if Six Flags had built a solid e-mail list and a high-traffic blog (they don’t blog).

Six Flags wouldn’t have called the agency at all. How would Ogilvy get paid for that?

Technorati Tags: engagement, advertising