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February 4, 2009

The Future Agency Of Record Will Be Social

There is a quite battle raging in the advertising industry over who will become the Agency of Record (AOR) for marketers’ social media efforts. With traditional media for delivering advertising declining in reach and effectiveness, and an even greater call for advertising efficiency in a down economy, becoming a marketer’s social media AOR can be a huge win and provide a map to a much-needed new business model and revenue stream for agencies.

Further complicating matters, as technology improves and the proliferation of social networks continue, all media will eventually be considered social media. So those agencies that win the title of social media AOR today, may very well simply evolve into a marketer’s overall AOR, acting as the central point of all of a client’s marketing initiatives.

The battle for the social media AOR title is even crossing what was once well-defined lines within the advertising industry. It seems to make just as much sense that a marketer’s social media initiatives are handled by a public relations agency as it does to enlist a media buying agency. Maybe the creative agency is the right lead for social media efforts? Would it be better to have a small company focused on social media in its DNA, or a holding company, with its expansive resources? All seem viable, and all likely are. It will come down to who can evolve to meet the demands of stewarding a client’s social media efforts. Here is a brief look some of the players and what makes them a potential fit as social media AOR:

PR – Because success in social media is more “earned media” than “paid media” — and isn’t earned media what great PR companies deliver? It is obvious to nearly every advertiser that to be effective they need to be in people’s social content, rather than simply being placed next to people’s social content. It’s like the difference between being covered by the New York Times vs. buying an ad in the Times. Buying ads is just fine, and there will be a place for it, but it’s not the holy grail.

Media Agencies – Because “free media” is a bigger fairy tale than unicorns. There will be significant capital outlay to earn people’s attention in social media, which will need to be spread across various social media vendors and creative partners. It will be incredibly important to track real costs and measure ROI.

Creative Agencies – Because nothing is more important in social media than the idea and execution. With bought media, marketers were at least guaranteed reach even for bad ideas and bad execution; with social media, bad ideas and bad executions are over before they start. Additionally, social media is going to demand creative iteration and evolution based on real-time consumer feedback.

Research/Consultancies – Because “listen to the consumers” is the buzz phrase of choice for good reason. Social media provides as much, if not more, value as a way to listen to people’s needs and wants. Marketers can finally have the one-to-one relationship they have been looking for and do a better job of creating and distributing products people want. They just need a way to hear people, and be heard, through all of the noise.

Independent Focused Agencies – Because managing social media efforts requires not only a unique skill set, but a unique relationship between a client and its social media agency. Independent agencies focused on social media have the advantage of structuring their offerings, relationships and organization to maximize return on a client’s social media initiatives.

Holding Companies – Because if you think about it for a second, they have all of the above, all of the pieces of the puzzle; fitting them together seems to be the tricky part. But if the holding companies can pull from their various resources to provide an overarching social media solution, it might be hard to compete with them.

Search Engine Marketing Agencies – Because their DNA is based on the type of ongoing, iterative relationships (re: partnerships) necessary to allow success in social media. SEM firms redefined ROI for marketing initiatives, and while social isn’t search, it’s not broadcast, either.

In the long run, marketers will need agencies that possess all of the above skill sets — or at least one agency proficient in coordinating a seamless effort across all of the disciplines required to activate their brands in social media. Who do you think wins? What else will they need? Leave your comment here and/or @joemarchese ( www.twitter.com/joemarchese) me on Twitter, to continue the conversation.

Joe Marchese is President of socialvibe.

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