The dawning of the digital age has created much hand-wringing among traditional media providers and the advertisers who feed them. A plethora of new options has seen rapid erosion of the once mighty traditional media power base.

The press is under grave threat as consumers can quickly and freely access specialist news content online at any time. The death of press was perhaps viewed as a hysterical prediction by digital enthusiasts only 12 months ago, but is now actually looking like reality given the financial failure of many print media groups in the US recently.

Radio and television are also facing serious challenges as new generations of consumers decide to seek entertainment elsewhere, at their leisure.

But probably the biggest threat to the traditional media and the advertising industry which supports it, is the fact that modern consumers are bypassing the ads altogether thanks to digital technology.

News and newspapers: why buy a paper for yesterdays news when you can follow it as it happens online? RSS feeds, Twitter alerts and blogs are changing the way we consume news. Specialist sites can provide us with in-depth analysis and opinion if required. Wildly popular author and internet marketing strategist Seth Godin recently asked, When newspapers are gone, what will you miss? His conclusion was, not much. And in his opinion the game is about up… The newspapers themselves are finally realising that its over. Huge debts, high costs, declining subscription rates, plummeting ad base – will the last one out please turn off the lights.

Radio, talk and music: heres an industry in which I worked and loved, but is now becoming increasingly irrelevant. Streaming music sites such as Last.fm provide an endless supply of music tailored to your tastes. They help you discover new music without exposing you to genres in which you have no interest. The ubiquitous iPod allows us to carry thousands of our favourite songs in our pocket. The shuffle function makes them the perfect radio station for any demographic. Even the comedy teams on radio stations can be heard via downloadable podcasts. Listen to what you want, when you want, without the ads.

Television: for years the Australian networks have treated viewers with contempt by constantly moving quality shows around their schedules, running over time, or holding back overseas hits to run at a time that suits them best. Now the viewer is having their revenge. DVRs, Tivo, Foxtel IQ and illegal downloading is allowing consumers to watch the shows they really want to watch whenever they feel like it. Depending on the viewing format they either skip the ads or there are no ads.

Many consumers now see the internet as their main source of entertainment, whether its watching or listening to downloads, randomly browsing YouTube, participating in social networks such as Facebook, Myspace, Twitter, or living vicariously in Second Life or World of Warcraft.

These are the realities of modern media consumption. Its not just a generalisation. The younger the demographic, the less traditional media consumption you will encounter.

So what does this mean for advertising agencies who have made a very nice living for several generations based on a model of supplying interruptive broadcast messages to traditional media outlets? What do we do when everybody has the ability to bypass our ads? Does the demise of the traditional media model also predicate the demise of the traditional ad agency model? Its very likely.

Obviously I am not the first in the industry to ask the question. The last decade has seen the proliferation of digital agencies who have largely taken a broadcast model online with banner ads and interruptive flash executions.

We have recently seen the emergence of social media agencies, although I am not sure they even believe in their own descriptions. Last year we saw the much-hyped launch of The Population, with the support of Photon, as one of Australias first social media agencies. Already this year Julian Cole, the social media strategist for The Population has decided he hates the words social media and that really it just explains where the web is at currently. Clearly we are all still coming to grips with how to even explain the new ways of advertising clients products, let alone doing it.

Are these specialist agencies the answer to the future of advertising or just part of the agency evolution?

I dont have all the answers, and I am not sure anyone does yet. But I believe there have been some excellent clues provided in recent times that may unlock the secrets to how we will reach consumers who now can control their media intake, and choose to ignore our advertising messages.

The marketing of Barack Obama to become the first black US President was some of the most sophisticated in history, and very different to previous political campaigns. The lessons were that stories matter, that permission matters and that motivating the most committed is more effective than broadcasting to the uncommitted. Note the word motivate rather than sell. A motivated consumer can evangelise and have a multiplying effect on your marketing.

Opt-in is more effective than yell-at. As advertising clutter has increased many advertisers have tried to broadcast their messages more aggressively, more frequently and more loudly. The irony is that this approach has accellerated the rush away from broadcast media. However, in recent times subtle and more sophisticated forms of media have merged that allow the consumer to opt-in to access content that suits them.

Daily Candy in the US is a classic opt-in or permission marketing example. This online newsletter-style website is sent to tens of thousands of targeted consumers every day. The information is very relevant to the people who view it and never seen by those who have no interest. Its targeted to young, upwardly mobile, urban women interested in fashion, food, travel and events. The advertising is subtle and suitable to this niche group.

Free can lead to paid. Smart online marketers have learned that sometimes you have to give a little to get a lot. Free e-books can lead to hardcover book sales. Free low cost products can build trust and relationships that lead to much greater financial windfalls. Seth Godin has done it for years with his books and the band Radiohead did it with their last album In Rainbows, releasing it for free for a limited time online, asking fans to pay what they felt appropriate. It was a marketing and sales triumph.

Engage before you sell. Companies like Zappos, the giant online shoe retailer, spend a large amount of their marketing resources on engaging consumers before they become customers. Rather than broadcast to them, they participate in online social networking sites such as Twitter and Facebook. By gently building relationships, rapport and trust they create a fan base of enthusiastic consumers who spread the Zappos message. Last year Zappos CEO Tony Hsieh told me that they use social media as a way to connect more personally and deeply with customers. It seems to be working.

New media consumption habits have led to the breakdown of traditional media models, which in turn demands the reinvention of advertising and consumer engagement. Inevitably the advertising agency model will require massive reinvention in order remain a relevant part of the process.