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I t's hard to escape from all the articles about how advertising agencies are becoming obsolete. Part of this stems from a total misunderstanding about what business need is satisfied by agencies.

According to Peter Drucker, "A business is defined by the want the customer satisfies when he or she buys your product or service."

So what do clients need? What want or need do agencies satisfy? Why do clients hire ad agencies?

In essence, clients hire ad agencies because they believe they can help persuade customers to do or think something.

The issue isn't the size or configuration of an agency. That's why we saw a tiny agency like Merkley Newman Harty compete and win against a giant agency like Leo Burnett Co. for the IBM business.

Clients select an agency based on the agency's ability to be persuasive. The first job is to persuade the client to hire them. But the real task is to become a true persuasion partner, someone who can help persuade consumers to have a positive opinion about their brand and eventually buy or use their product or service.

The truth of the matter is that clients don't need advertising agencies. They need persuasion partners.

Most of the recent rhetoric about the demise of advertising agencies deals with superficial and irrelevant issues: big or small, a la carte vs. full service, etc. The real issue is that clients will always need help in persuading consumers to think and/or do something. Those organizations that can satisfy this need will succeed. Regardless of what we choose to call them.M

Mr. Patty is exec VP of Chiat/Day, Venice, Calif.


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