Forrester's Peter Kim has produced a very thought provoking read on the future of the advertising agency. The report argues that consumers now rely less and less on marketing messages when in buying mode. Instead they seek guidance from family, friends and others in their respective communities to guide them toward purchase decisions.

Obviously working for a PR firm, my views are always going to be biased but it is interesting nevertheless to read Peter's conclusions:

Today's agencies fail to help marketers engage with consumers, who, as a result, are becoming less brand-loyal and more trusting of each other. To turn the tide, marketers will move to the Connected Agency - one that shifts: from making messages to nurturing consumer connections; from delivering push to creating pull interactions; and from orchestrating campaigns to facilitating conversations. Over the next five years, traditional agencies will make this shift; they will start by connecting with consumer communities and will eventually become an integral part of them.

Peter's views via AdWeek

(Agencies are) "in "a world of hurt" because consumers are tuning out the messages the industry is predicated on producing. Instead, it believes shops need to be organized around communities, not disciplines. What it is calling "the connected agency" would not only know certain communities but also be active members of these groups. Pushing messages would give way to encouraging voluntary engagement, and ongoing conversations would replace time-based campaigns"

Peter's views have obviously acted as a catalyst for some interesting discussions from the industry, for example:

In agreement: Big Picture Advertising:

...I think the traditional agency model is broken. Being a factory dedicated to producing 30 second commercials, websites, banners and buttons or mail packs is not a viable business in an age where consumers are AdAvoiders and media is evolving so fast.

In dissent: Herd - the hidden truth about who we are

...a big fat "NO" to the idea that there are "fixed communities": this reeks all too much of the network theory that geekworld likes; human social connections are much more interesting than that model - derived from the tech world - suggest.

Somewhere in the middle: PaulIsakson

I completely agree that many agencies are out of touch and need to learn how to facilitate and participate in the conversations taking place vs. interrupting them... I don't believe the answer is an agency of mothers working with Proctor & Gamble to help them better communicate with this segment.

My view is more closer to Peter's when he states: "I don't think agencies are going away," "They're going to be the ones that help marketers to communities of mutual interest." I believe that within a few years there will be less distinction between digital, advertising and pr agencies - we will in turn become influencer agencies that span multiple media.

I also completely agree in that it is far better to have peer recommendations rather than mass (spam-like) ads and that those agencies that understand the power of social media are far likely to be the leaders over all marketing communications in the years to come.