How scared are media and advertising agencies of this development (PDF; 384 KB)? I'd be petrified if I was them.
If you don't have time to look at that document, here's the two-sentence snapshot: Mondelez (the renamed Kraft snack food group) has done a deal with Twitter where Twitter staff will be seated in four Mondelez offices around the world, helping Mondelez with their real-time marketing by providing real-time insights, custom research and so on, in return for a minimum ad spending commitment. In effect, Twitter has turned itself into an agency.
Now, before anyone starts jumping up and down with objections, I know that this isn't really a replacement for agencies. But it is a significant development that agencies and advertisers will be watching, and for Twitter itself as it positions itself for an IPO. If large digital platforms like Twitter and Google are able to directly provide custom services to large brands, where does that leave agencies?
On the other hand, the agency business model has historically changed so much in response to market developments that I have no doubt the smartest ones out there will continue to reinvent themselves and thrive. For example, when online advertising first started to get going, a lot of agency unbelievers thought that the Internet would disaggregate agencies entirely. Exactly the opposite happened as agencies started online trading desks to buy ad impressions on clients' behalf, started doing creative and copy for digital ads, designed online campaigns and so on.
For whatever reason, I couldn't find mentions of this news online when I checked a few hours ago, not on FT.com or on any other website. Gentlemen, start your conspiracy theories now.
Update: Right, here's the FT article now. Mondelez strikes deal to chew into Twitter’s social media knowhow