The Future of Ad Agencies and Social Media

To keep up with ever-changing advertising and marketing options, ad agencies are rapidly adopting new strategies and outlooks on how consumers interact with brands. While many ad agencies have been slow to adopt social media, others have been keeping up with the trends quite well.

But keeping up with change is never good enough in this industry; the most successful, game-changing campaigns are generally a bit ahead of the curve. It’s not enough to hitch your star to an existing facet of viral content; you have to create the content yourself. And you can’t wait for mass markets to catch up to new technologies before you begin thinking about how to incorporate new tech into campaigns and creative; you need to test how that tech will work now. Mobile and social ads are no longer new; what’s more interesting now is figuring out how brands can integrate creatively and effectively with location apps and casual games.

We talked with five people who are familiar with the connected worlds of digital media and ad agencies, and here’s what they had to say about the future of social media and advertising.
Software Is the New Medium

Tom Bedecarré is CEO of AKQA, an agency well-regarded for its digital and interactive work, a field in which AKQA specializes; you can see some recent examples of that work on the agency’s Facebook page.

He told us in an e-mail recently, “One of the newest forms of media is not media at all, but software and platforms. Increasingly, AKQA is developing applications and marketing platforms that provide greater utility, entertainment and information to our clients’ customers without relying on traditional media channels. One example of this is the Fiat eco:Drive application we created that allows Fiat drivers to monitor their driving skills and fuel efficiency and helps drivers to lower CO² emissions.”

More and more, agencies will be called on to be (or at least have the capacity to behave as) short-order web and mobile dev shops. You’ll need to make sure your creatives have access to skilled hackers and experienced web designers; you might even consider including a few highly technical, very creative engineers in your creative team, not just as part-time or freelance collaborators.
Groups and Friends: The Power of the Hive Mind

If you want to get inside your clients’ customers’ heads, just take a look at what their friends and peers are doing, saying and buying.

We asked David Armano, Senior Vice President at Edelman Digital, if he thought group or friend buying behavior could be used as a recommendation system for goods and services. His answer was resoundingly affirmative.

“If the numbers behind Groupon’s recent success with The Gap is any indicator, the answer is yes.” For reference, the partnership between the group-buying site and the national retailer completely smashed sales records for both entities with a simple digital coupon.

But group buying is most powerful when combined with sharing across social networks.

“The key,” continued Armano, “is that the group buying activity needs to be be present in your friends’ streams. Combine ‘likes’ with mass purchase behavior, and you’ve got the perfect storm of a signal that says, ‘Your friend got in on the deal, maybe you should too.’”
Transparency Is Still a Long Way Off

Part of the art of selling is the illusion that the company is doing what’s best for the consumer and not for their own bottom line.

We asked Jeremy Toeman, founding partner of San Francisco-based agency Stage Two if he thought online marketing has (or should have) more or less transparency in this regard than traditional marketing.

“This might sound odd,” he began, “but I actually think online marketing has less transparency than traditional does.

“In traditional marketing, your advertising was effectively blatant, from TV/radio/newspaper ad buys to junk mail to billboards on the side of the road. Online companies use tactics like SEO, spam/spam-blogs, pop-ups, text-link-ads, fake viral videos, etc.”

Steve Hall, creator and editor of industry blog Adrants, wrote in 2008 that most of the “viral” videos then (particularly the “guys backflip into jeans” clip that ended up being part of a Levi’s campaign) were, in fact, advertisements. And earlier this year, another tattoo-related fake viral video was discovered to be a marketing gimmick from Ray Ban. Fake virility isn’t limited to YouTube (YouTube); often, we find commercial entities trying to “push” supposedly non-commercial content on platforms such as Digg (Digg), Facebook (Facebook) and Twitter (Twitter).

Of course, consumers don’t figure it out… until they do. And they’re getting more savvy about fake transparency all the time.

Toeman believes brands and agencies should strive for more genuine methods of bringing an advertising message to consumers. “Personally,” he said, “I’d nix all the ‘hide the fact that this is an ad’ tactics completely and eliminate the methods of gaming systems.”

If you need more convincing that labeling ads as ads might be a good thing, consider Old Spice’s recent campaign. Pure creativity and Internet (Internet)-culture awareness drove a YouTube campaign that was very clearly advertising; still, the company’s sales doubled as a result of the YouTube clips.
Location Campaigns Are the New Targeting Mechanism

In the past couple weeks, Foursquare took over Times Square and Facebook launched Places. Clearly, location-based services and related ad campaigns are going to become huge very shortly.

“We’re right at the beginning of an exciting time for the development of location-based services and marketing that integrates geo-location into advertising and applications,” said Bedecarré. “Recent announcements by Facebook and Google (Google) reflect the importance of location services.”

Hall says location-based marketing “will change everything.” He explained:

“With the ability to target people only when they are within purchasing distance, brands will be able to come that much closer to targeting nirvana. Offers can be made only to those meeting certain location (and even demographic) requirements, reducing waste and actually saving a brand a lot of money by minimizing its old school spray-and-pray mass marketing techniques. In a nutshell, mobile will, once and for all, make it possible for a marketer to target without waste.”

Getting your clients thinking now about how to integrate location and checkins into a campaign is key. While we can’t yet construct fully formed campaigns around Facebook Places, there are a slew of other services you can use as case studies for an at-scale campaign.

Starbucks, which does an excellent job in the social media advertising and marketing category, has seen good results from a recent Foursquare (foursquare) campaign, as have many other brands. And they were right to jump on the bandwagon early. Between the intelligence you can gather about your clients’ customers and your ability to find more highly qualified targets than ever before, location is indeed the holy grail for advertisers.
Display Ads Are Evolving

Jesse Thomas runs one of the most forward-thinking creative agencies around, but he’s not ready to pick out a headstone for display ads just yet. However, he did tell us that “the usual suspects” of banner ads and skyscrapers are definitely undergoing a change.

“Facebook’s ads have singlehandedly made ads social,” he wrote to us in an e-mail. “The idea of ‘liking’ an ad is genius… The idea of advertising a Page in Facebook via the Facebook ad engine and being able to access special advertising powers is nothing short of revolutionary. In a world of [expletive] Google text ads, Facebook’s social ads are a breath of fresh air. But we have a long way to go!”

And not all of Google’s ad-buy offerings are as excremental as Thomas thinks the text ads can be. “Google offered the ability to integrate the Facebook checkout (one-click purchase) option to their ads, and that was awesome at the time. You will see more of this in the future: Making ads better by integrating features from other parts of the platform that are no longer cool anymore.”

In other words, display can still be part of your ad buys and collateral, but you have to think creatively, target carefully, measure thoroughly and react accordingly. Use all the tools at your disposal to do so.

Jolie O'Dell for Mashable.