Agency's face poor revenue growth in the long term if they don't do more to embrace social platforms.
U.K. agencies are not fully embracing social media, and could face poor revenue growth in the next decade as a result, according to a report by the Institute Practitioners in Advertising (IPA) and the Future Foundation.
The report, titled "Social Media Futures -- The future of advertising and agencies in a networked society," suggests the U.K. digital ad industry could experience growth of just 1.2 percent per year by 2016 if it fails to prepare adequately for a consumer-led digital media landscape.
As the popularity of social networks, blogs and viral media continues to grow, the consumer "will increasingly mediate messages between brands, themselves and other consumers, and could radically diminish the power and influence of the paid-for advertising industry," the report claims.
Of the 100 member agencies interviewed for the report, only a third were deemed "ready and waiting" for a scenario in which social media plays a lead role in brand communications. However, almost 95 percent of respondents agreed that more brand messages would be passed on informally from one person to another by 2016, and 90 percent agreed that some campaigns would be "built entirely on messages being passed from individual to individual."
Although some advertisers remain reluctant to "hijack" consumer conversations via social media platforms, the IPA suggests that innovation and creativity will be key to enabling brand communications within this space. "Brands will have to earn the right to be in this space. Success will be measured by the degree to which a brand is allowed to blend in with the conversations that are going on, with or without it," the report says.
Commenting on the organization's findings, Moray MacLennan, IPA President and CEO of M&C Saatchi Worldwide, said, "Social media has been a phenomena for some time, but the industry is only beginning to come to terms with it as a medium. Its potential is undoubted, but the risks are equally clear."
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Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
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