The second season of Mad Men just ended. Love it or hate it, the show does a brilliant job of portraying the advertising business as it exists today. Today? Yes, today. Sterling Cooper circa 1960-62 is nearly identical to the agency business in 2008. The fundamental model of ad agencies hasn't changed much in 50 years. But it is about to change dramatically-and the direction agencies will take is becoming increasingly clear.

A simple insight shapes our industry: namely, that a powerful technology sometimes comes along that transforms the lives of consumers. This creates opportunities for agencies to tap into the power of technology and use it in the service of brands. In the Mad Men era, the technology was television. The genius of Bill Bernbach, David Ogilvy and Leo Burnett lay in building businesses around their era's new technology and its effect on consumers. Looking back, it is easy to see the success of their model: enormous global agency brands employing tens of thousands of people.

Agency models are largely about organizing talent to deliver work. On Mad Men, we can see how the creative disciplines of copywriting and art direction work side by side to develop advertising concepts -- eventually adapting their storytelling crafts to create interruptive messages delivered to passive mass audiences. At the time, media was still integrated as a discipline inside agencies, and we witness media planner Harry Crane elevated to a new position as head of television. Of course, the account guys ruled the roost, delivering clients and cocktails at an equal pace.

This is basically the model we have today, with a few exceptions. For one, media was ripped out of agencies and placed within a new silo-the media agency. For another, the new discipline of account planning emerged and was integrated into agency teams. A modern ad agency consists of teams of account managers, copywriters, art directors and planners. The production of ideas is outsourced to an entire sub-economy of production companies operating outside the agencies themselves.

As new marketing disciplines emerged, there was never any consideration given to disrupting the ad agency's core model. Rather than add new specialists to the existing account/copy/art/planning team, agencies siloed each discipline: brand design, direct, PR, events, promotions, multicultural and, most recently, digital. Of course, each discipline silo had its own team structure, account management and production companies. To complicate matters further, clients began to mimic the siloed structure of agencies: vp of advertising, vp of branding, vp of corporate communications, vp of e-commerce, etc.

Against this mess of specialty disciplines, separate business units and P&Ls, outside production companies and client-side silos, the world changed ... again. A new technology has emerged that is just as transformational as television. It has created a new world of active and engaged consumers spread across millions of digital touch points. And agencies again see new opportunities to tap into new technologies -- as Ogilvy, Bernbach and Burnett did in the '60s. But doing so will require an entirely new model: an agency for the digital age.



The agency for the digital age can create a much more integrated structure and avoid some of the mistakes of the previous generation. Teams will consist of more departmental specialties capable of delivering a broader portfolio of work. The agency for the digital age will combine strategic disciplines like planning, analytics and media-each attuned to the behavioral changes of digital consumers. Alongside these strategic disciplines are three creative ones: interaction design, visual design and copywriting. The days when copywriters and art directors could take a brief, disappear for a couple of weeks and emerge with the "big idea" are long over. Today, we need new creative methodologies that incorporate the broader themes of customer experience (led by interaction designers) as well as thoughtful consideration of how brands should behave in digital channels. The very nature of what constitutes a big idea has evolved from a copy line and some visual imagery to encompass everything from applications to user interfaces. To the mix of talent we must also include technology. An agency cannot operate in the digital age without having technologists to inform us of the incredible opportunities available for connecting in innovative ways with consumers.

The model still requires account managers to serve as business partners to clients, but they also partner with equally adept producers. And where analog agencies mostly outsourced production of ideas to production companies, agencies in the digital age will produce the lion's share of the work themselves. More important, many of the ideas will be impossible to produce without in-house teams working collaboratively. Imagine Sergey and Larry trying to outsource the development of Google, and you get the picture. Adept agencies have begun building in-house digital studios to handle linear content like audio and video. As clients move from a world where 30 seconds of content cost hundreds of thousands of dollars to a digital landscape where distribution allows for hours of content, the economics of production will not work unless the business model lowers costs significantly while maintaining equally high quality.

An agency like R/GA combines nine departmental disciplines: planning, analytics, media, interaction design, visual design, copywriting, technology, account management and production, as well as an in-house digital studio for linear content. Our multidisciplinary teams can develop anything from an advertisement to a complex Web site to a mobile application to an in-store retail experience to a new brand design-all informed by the realities of engaging with the digital consumer. As new business opportunities emerged, like mobile, we built them as horizontal offerings inside the same nine-discipline structure, thus avoiding the vertical silo model of traditional agencies.

Our model is not the only new one. But no matter which model an agency builds, hopefully, in another 50 years, when a new technology comes along, people will speak of digital work with the same reverence as the TV work from the likes of Bernbach, Ogilvy and Burnett.

--Bob Greenberg is CEO of R/GA and a regular Adweek columnist.