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#DigitalSkeptic: Ad Agencies Are Being Moved Off Madison Ave. to Digital Slum

NEW YORK (TheStreet) -- Pete Hayes may be a chief marketing officer's chief marketing officer. But that doesn't mean he has any use for an ad agency.

"When I was at Advanced Micro Devices, I spent most of my time taking apart our big agency relationships," said the principal and chief marketing officer for Chief Outsiders, the Houston, Texas, marketing executive placement firm. Hayes specializes in providing top-level marketing professionals to small- to midsized firms on a part-time basis.

As he sees it, the entire Madison Avenue, Mad Men approach of a big, centralized Omnicom Group, Havas or the Interpublic Group handling all a firm's end-to-end marketing and media buying needs is simply not how the vast majority of businesses should handle their marketing in the Digital Age.

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"Now it's about finding relationships with specific hitters that specialize in getting certain things done," he explained to me in one of several fascinating calls we've had over the past several months. "Sometimes you do it yourself. And sometimes you go outside. But it's a much more integrated and leaner process."

Here we go again, investors: The same race-to-the-bottom Information Age economics that has gutted entertainment, music, publishing and legal services is now loose on Madison Avenue. And keep in mind, Hayes is not merely speaking of his own multi-decade track record of managing $50 billion-plus marketing spends for firms such as Young & Rubicam and IBM. His "Less Madison Avenue Is More" approach is a core company principal, one that he and his staff of several dozen chief marketing officers bet on day in and day out to drive business.

"Which agency you go hire is about the last thing today's CMO thinks about," he explained. "Now it's about managing your inbound marketing." That is, he said, how to automate the process of making a real sale out of potential consumers who initiate their own sales process, do their own research and integrate into a company's product channel at their pace.

"The fantastic news for smaller businesses," Hayes said, "is they can get the same suite of capabilities that any major enterprise can use by integrating with off-the-shelf digital tools like Salesforce, HubSpot and Pardot."

"That is the absolute magic bullet now. Not your agency."

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