How is the Social Web Disrupting the Agency Ecosystem (in India and China)?

I have previously written about how the social web is disrupting integrated marketing and the agency ecosystem.

The social web is changing how brands need to look at 360 degree marketing in six fundamental ways, best exemplified in the Pepsi Refresh Project case study:

Shift #1. From inside-out brand message to outside-in social heartbeat
Shift #2. From TVC-centric to community-centric
Shift #3. From short-term campaigns to long-term commitment
Shift #4. From interruption-based to permission-based
Shift #5. From brand commercial to branded content streams
Shift #6. From paid or earned media to owned and shared media

These six shifts in how brands need to look at 360 degree marketing from the client-side correspond to six seismic shifts that are changing the agency ecosystem:

Shift #1. The social web is not a new media channel, it’s a web of social relationships
Shift #2. Word of mouth conversations are measurable on the social web
Shift #3. Everyone is an influencer on the social web
Shift #4. Viral sharing on the social web acts as a multiplier effect on paid advertising
Shift #5. Offline experiences trigger online conversations on the social web
Shift #6. Brands are engaging consumers directly on the social web by creating branded content

These six shifts are blurring the boundaries between traditional agencies and shifting the center of gravity from paid media to owned media and earned media. New types of integrated agencies have the opportunity to disrupt the agency ecosystem if they create six new capabilities:

Role #1. Share insights on which social heartbeats resonate with the brand values
Role #2. Help the brand build long-term relationships with influencers
Role #3. Host brand communities that organize and energize evangelists
Role #4. Create compelling branded content platforms
Role #5. Create compelling online-offline experiences
Role #6. Measure the strength of the brand’s relationship with influencers

I believe that agencies will need to focus on one of three areas: insights, integration and implementation. Traditional network agencies will continue to lead at integration (in spite of  new type of crowdsourced agencies like Victors & Spoils and Co:Collective)  but expect niche players to focus on insights and implementation.

New research from Jeremiah Owyang from Altimeter Group shows that this is already happening in the social media space, as boutique social media agencies are winning bigger deals with more sophisticated clients.

I ran a boutique social business consulting firm in India last year and I now work as the Asia digital and social media lead for a large agency network, so I’m playing a direct role in shaping how these shifts are unfolding in the two most important emerging markets in the world: India and China.

Consumer behavior in India and China (and even Japan) is shifting in distinctly different ways, compared to mature markets in North America and Europe, and some of the models that worked or will work there, won’t really work here.

To begin with, internet penetration in India is less than 5% and China has its own social web platforms like Renren, Youku and Sina Weibo. In addition, consumers in India and China are still driven by individual-focused, achievement-oriented values. So, I am not sure if a program like Pepsi Refresh Project will work in these markets in its present form (I hope they do).

However, young, educated, urban consumers in India and China are becoming increasingly sophisticated, both in terms of social web adoption and value systems, and brands that design platforms and programs for them will benefit from an early adopter advantage.

I have come to believe that the ideal approach for India and China is an integrated influencer marketing approach that answers three important questions:

1. How to organize and energize brand evangelists to achieve business objectives?
2. How to create influencer platforms and programs that work both online and offline?
3. How to build strong relationships with influencers by integrating online communities and offline events?

Here are some other interesting point of views on the future of the agency, some triggered by the recent FastCompany story on the future of the advertising agency:

– Robin Grant at We Are Social argues that the new kind of agency will combine research and analytics insights with creative and editorial capabilities, influencer relations experience and digital and social media understanding.

– William Owen and Tim Malbon at Made by Many argue that agencies need to move from creating communications that sell products and services to designing experiences that enhance products and services.

– Peter Merholz from Adaptive Path argues that advertising agencies don’t have the DNA to design meaningful customer experiences.

– John Bell from Ogilvy 360 Digital Influence believes that large agency networks can continue to lead if they focus on integration, influence and innovation.

– Bud Caddell of Victors & Spoils argues that the agencies of the future will focus on one of three things: creating big ideas, implementing them, or building platforms.

What do you think? What is the future of the agency, in the mature markets of North America and Europe? How will the future of the agency be different in the emerging markets of India and China? What can agencies in these two types of markets learn from each other? Do share your insights in the comments below.

If you would like to interview me for a story or invite me to speak at a conference, please e-mail me at [email protected], call me at +91-9999856940, or connect with me on Twitter.

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