AdWeek covers a story that most people working in the digital sector will already have had some intuition of:

Forrester Research conducted a “state of interactive agencies” survey of about 100 global interactive marketers. It found just 23 percent believed their “traditional brand agency” is capable of planning and managing interactive marketing activities. About 46 percent did not believe them capable, with the rest neutral on the question.

While that held good news for digital agencies, particularly as digital becomes a much larger part of marketing, Forrester found few clients are willing to give them responsibility for the brand’s direction. Just 22 percent agreed that their interactive agency is “ready to lead my brand.” Another 33 percent said their digital shops aren’t ready, with the rest neutral.

via ‘Great Race’ Between Traditional, Digital Shops.

In brief: clients think traditional agencies can’t be trusted to do online; digital agencies can’t be trusted to lead.

The article postulates a ‘Great Race’ as traditional agencies struggle to acquire digital skills and people, while digital shops expand their offerings to include more mainstream marketing activities to prove their wider competence.

The trouble here is that it slows down and distracts both sides.

Initially, at least, they are likely to do a poor job of imitating their competitors on the other side, despite sinking what probably seems like an inordinate amount of resource into them. The two sides come with very different mind-sets in the majority of cases, and adjusting to the world of mainstream brand marketing or interactive media will be a painful and slow process that will inevitably involve several failures.

I am sure that there are some marvellous full-service agencies, but when I look at the ones I come across, it emerges that they’re actually formed of five or six different business centres created through acquisitions and spin-offs.

While they’re busy getting nowhere fast, new disciplines like interactive signage or phone apps appear, and specialised agencies pop up to fill the gap. Neither the digital nor traditional agencies have a handle on these disciplines because they have been spending all their time watching their competitors.

So now there are three, four, five and more agencies looking for a slice.

I’m not convinced that getting involved in the Great Race is likely to lead to a winning position. Better surely, to display leadership, integrity and genius in the bit that you’re actually good at?

I’ve been writing recently about living in a post-digital world. Not that computers have gone away in any sense, but rather that the digital world now penetrates ‘normal life’ to such an extent that to make a distinction between digital and other media seems archaic. Anyway, cleverer people than me have been having similar thoughts.

We call the Internet a place. We go to sites. Marketing people talk about destinations.

But that’s rubbish. The Internet is with me, and increasingly with most people, all of the time. It follows us as we go to other places. Increasingly, it helps us to navigate those places. You have probably seen it already, but if you haven’t, check this video of the tube-finder iPhone app.

This is the way we’re going. Digital isn’t something you can only do at your screen any more. It’s in your pocket, at your fingertips. You don’t go online any more – you simply shift between different-shaped terminals. We are already android. And your experience of digital isn’t something you do sat at a computer any more. It’s on your billboards, in your pub, driving your telly and your travel. It’s all around you all the time. Augmented reality. It’s projected in 64-bit colour at your retina (oops – no, sorry — that’s next year). It’s not about screens, either, it’s fountains and traffic lights and fridges. We don’t live our lives online or offline, but inline. (That’s an expression I stole from Timo Veikkola, strategist at The Future Laboratory who spoke for us last year).

Virtual Reality used to require a massive pair of goggles and gloves; now it is in your pocket.

So where am I going? The language of places and spaces, and sites and destinations, is outdated. Maybe it always was – a hand-me-down from broadcast TV and media that required physical outlets — like newspapers — that we took on board because we didn’t have any other words.

Stowe Boyd talks about us living in a state of flow instead. I get the idea, but am not quite comfortable with it. There’s something there (like ‘river of news’) that suggests being sat under a shower all day. And I also have uneasy feelings around the idea of ‘going with the flow’, which is all too true of a lot of online activity. (Green Twitter badges for Iran? eh?) This is something we work with not absorb.

We’re screaming for better metaphors about our on inline lives. Maybe we shouldn’t be searching for them. Maybe this is just too new and the next stage of evolution – we’ll work out the metaphors in retrospect.

Forgive me a quick plug. But. This is what the i-Design Conference is about on September 24.

On the other, crikey, there are an awful lot of digital folk working in PR nowadays. And digital outfits that ‘do’ PR. And journalists who’ve crossed over to both, for that matter.

So I am less biased than you might imagine.

Last night’s NMK event – What Happens to Online PR? – covered a lot of bases. What exactly is PR; what is Online; and what is needed for the industry to gain some leadership in the online space?

The room was heavily dominated by people at the forefront of reinventing PR. People who are already moving well beyond press relations into the guardianship of reputation and the formation of real relationships — both in digital and analogue. Or is that backwards in time? Panellist Stuart Bruce maintained that PR was never about the press, and always about looking after and promoting reputations and establishing and growing relationships.

There is, as everyone knows, a land-grab going on. Everyone in the marcomms space, from designers to planners, is on their toes (unless they’re rubbish) to find a reason to suggest that it is they who should lead in digital. The people who gain a credible early lead will probably be able to maintain that, and the people who don’t will wither away.

For pure digital agencies, their case is clear: we grew up in this space; we know and understand it best; we’re the geeks that you used to call the back-room boys (and girls). But now things have changed. Now online isn’t something separate, it’s everything. If you want the best skills and insight in everything, then call us.

On the PR side the case is clear but muddied by 100 years of history and culture. At its purest, Public Relations is about reputation management and relationship management. It’s about the strategy behind communications policies as much as executing those policies.

At the execution level, it’s about crafting, creating and sustaining stories which will work with those relationships and bolster or protect that reputation.

At its not so pure, PR is about coverage and column inches; it’s about billing on AEV; it’s about hitting the front page of the FT; it’s about whacking out a press release every 2 minutes about anything that you can loosely associate with a client (I received about 10 budget-related press releases today, most of which were totally spurious).

As everyone who works in media knows, sadly, you get ten times as much contact from the bad end of the scale than you do from the shining knights. That’s how spam works: if the conversion rate is 0.000001%, then you send 1,000,000 emails. If it’s lower, you simply send more.

As both sides of the panel last night agreed, this is not sustainable. Maintaining relationships and building reputation depends on adding value, not taking it away. There are agencies that I (and presumably a lot of other journalists) have blacklisted – and they will never be able to recover from that.

So, the way forward for PR agencies: stay still, integrate, specialise or outsource?

Stay still: you die. And you deserve to. You shouldn’t be on this blog. Go away.

Lots of agencies are integrating. Bringing in digital media people, or hiring PR graduates with that inclination: bunch them together and call them the digital team; maybe bringing in a heavy-hitter who’s well-known in the pure digital space; maybe even buying out a digital agency to call their own. (You know I could name and shame here, but I won’t). Problem: 80% of your agency has no clue what the hell you do. They won’t be able to sell, explain or justify your projects to clients. You’ll be working 24/7 to stay still.

Or specialise. Become an online PR agency. Lots of geeks; lots of analytics; project managers. This has been a good model for the last couple of years. The problem? The people who hold the purse strings don’t trust you johnny-come-latelies with your flip-flops and skateboards one bit. Especially when it comes to reputation. A bunch of internet guys? Are you having me on? Sure you can do my website, but corporate reputation? Yeah, riiight.

Or outsource. You do your bit on strategy and then outsource the bits you haven’t got the skillz for to the best pure digital players available. This agency for your SEO, that one for your design and the other for your social strategy. There’s lots of danger here, too. Your outsourced agencies are also your competitors. Because they all want your lunch money. Also, you’ve increased your costs massively in most cases. You’ve also got a whole bunch of communication issues to resolve – not easy ones, either, because everyone in marcomms has an ego the size of a planet.

So not any of those things, really.

Start again. No, really.

Start again.

Integration, specialisation and outsourcing aren’t going to work as plausible business models in the long term. I think we all know that. You need an agency that is Digital and PR. An agency focused on relationships and reputation, but wholly grounded in today’s arena of communications. Then you win.

I’m not an entrepreneur, I’m a hack, but I hear all the arguments, all the time; I hear all the stories, every day. A lot of you have already started again. The rest of you will not survive except through brute force and a lot of that will involve layoffs.

Start again.

[I’ll create a post on NMK collating discussion so far, but in the meantime:

Steven Waddington published before the debate but agrees “real threat is not the contraction of the industry but the army of new digital agencies that is capitalising on the disruption in the market”

Gerel Orgil offers the two-minute version — very useful indeed — I’d forgotten half of what she recorded.

Roger Warner great summary and a real call to learning and education — you risk losing the opportunity to learn! “the threat to a traditional PR agency isn’t just in losing a slice of Online business, it’s in losing the right to learn about it.”

Lloyd Gofton says the winning agencies will have the right blend of skills.

Jo-Rosie Haffenden condemns “an industry which is not as excited as it should be about change”.

Danny Whatmough didn’t turn up but favours a media mix: “no one group will dominate and that there will be plenty of new tricks to learn and plenty for everyone to practice”.

Jed Hallam promised to help with the hats and coats, didn’t, but instead offers a great post on “influence and social mechanics”.

Peter Hay crikey — old media loves us too.]

Yes, I still have a blog, it seems, and I’m still using it to pimp work events.

Next Tuesday, we’re doing What Happens to Radio? And you should book right now, honestly.

Some of you too-cool-for-school nu-media folk might be thinking ‘who gives a shit about radio?’

So this is why I chose radio for our next event.

• It’s already proven itself as the most adaptable media. It’s incredibly portable; it can do indoors, outdoors, cars, mobiles, whatever.
• It’s also adapted to the Internet era from the start. Almost every radio station has had an internet presence and streaming of some sort from the start (viz. 1995’ish). So we know that they’re great innovators and have been for a long, long time.
• At the same time, it’s been very static in terms of presentation and programming. Some disconnect there, surely?
• There’s a struggle there. People under-rate radio, again thinking that it’s somehow out-of-date and surpassed by internet services. Check your facts, people. The most meagre local station has hundreds of thousands of listeners. Test that against any internet radio-style service.
• There’s tons of innovation: not just DAB but whole new ways of experiencing and interacting with the medium. That’s what we’re going to be talking about!
• There’s a massive conundrum factoring the ephemeral and ambient nature of radio with the new demand for interactivity, audience feedback loops and more revenue.
• It’s square. Some people think that none of this stuff is happening and I wanted to show how wrong they were.

I promise that my next post will not be quite so promotional.