Will Digital Cause Agency Shrinkage?

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NEW YORK The increased automation of advertising routed through the buying systems of companies like Google and Microsoft will likely produce significantly altered agency models, according to a key AOL executive.

Dave Morgan, evp, global advertising strategy at AOL, said media shops have a faltering business model, with armies of comparatively low-paid digital media buyers propping up a layer of high-priced executives from the traditional side of the aisle.

The inefficiencies created by this approach are no longer tenable, and current trends will yield “leaner” agencies well versed in using digital-buying platforms, he said during a panel discussion at an investment-banking conference here on Monday.

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