After years of unbundling agency disciplines, setting up standalone specialty shops, and the proliferation of digital boutiques, it looks like the agency business is heading back to the future.

 An article in the November issue of UK ad industry journal, Admap, discusses the structural changes agencies need to make to survive and outlines a blueprint of how this ‘new’ agency should look.  It’s called the ‘Third Wave’ agency model by the article’s author, Tim Hipperson, UK Group CEO of G2 Joshua, which is part of WPP’s G2 Worldwide network.

The ‘First Wave’ dates from the 1920s. The “Second Wave’ began in the 1980s when we started to see agencies breaking down into standalone creative and media agencies and picked up speed in the 90s as the digital momentum grew.

Hipperson says continued agency break down into even smaller subsets of digital advertising, such as tablet-based communications, will not create the integration that advertisers are demanding.  Integration will only become a reality with ‘Third Wave’ agencies combining traditional expertise with emerging technologies.

According to Hipperson, “For brands, this means an agency that can nurture customer communities; from delivering push communications, to creating pull interactions; and from managing campaigns, to facilitate conversation, and more than anything else, listen to what people are saying. In essence, becoming a connected agency for a connected world.”

His vision sounds like a return to the traditional full-service agency model, but now there is even more requirement for strong research and digital expertise. Hipperson lists and elaborates on eight main points in his blueprint for a ‘Third Wave’ agency:

Content – Engage customer communities with multichannel editorialized branded content.

Lifetime value is dead – Put less emphasis on lifetime value of a consumer and more on lifetime experience by providing a seamless brand experience across touchpoints.

Integrated planning – The agency is the custodian of the customer’s interaction with a brand so must orchestrate touchpoints to make the experience seamless and positive.

Real-time insight – A crucial part of integrated planning is the ability to listen, test and review in real time.

Marrying quantitative with qualitative – This is the ability to recognize the right data and understand what to do with it.

Co-creation – If it’s right for the customer and the brand, co-creation brings them closer together. The key is to identify the relevant customers and the right format.

Optimize online media buying – The process needs to be more flexible and faster to allow for more appropriate buying decisions.

His last point – project, not account, management – seems to be the main driver behind integration, the ability to manage and facilitate the entire process. This role would include juggling multiple strands of activity, bringing together and managing the team of specialists, and finally, delivering on time and on budget.

To make all this work, there needs to be greater collaboration between agency departments and their leaders than ever before.  The challenge will be to overcome the problems integrated agencies had in the past, such as interdepartmental rivalries.