David Henderson points to the Piper Jaffray report titled The User Revolution: The New Advertising Ecosystem and the Rise of Internet as a Mass Medium. Caution: it’s 425 pages.

Although it’s a rather longish overview of the industry, the interesting part is in chapter 12 — the agencies and their new role:

  • Agencies are rapidly evolving to become more complicated, technology-focused entities
  • There is a continued horizontal integration within the agencies combining the best-of-breed offerings
  • We expect large, multi-national traditional agencies to have eventually full interactive capabilities largely through acquisitions of pure-play agencies
  • Current focus of agencies are in engagement marketing, usergenerated content and viral marketing, and in Web-focused creative and video

    • If you’re moving away from blanket mass media campaigns modeled on the traditional media, the solution is inevitably technological. The agility and intelligence required in order to be relevant online is gradually becoming a technological challenge. This has been our vision for quite a while, and it’s the reason why we do ad serving and rich media in-house and have specialized technology ressources on staff.

    Another interesting observation in the report is something Piper Jaffray calls “the rise of communitainment.” Content doesn’t become popular in a vacuum — the hits are propelled by communities and you can see the phenomenon live on a number of platforms.