"The traditional marketing model is broken," Jim Stengel, Procter & Gamble's CMO, told a room full of ad agency executives at an industry conference in February. Indeed, the statistics are not promising according to a new piece in Fortune called "Nightmare on Madison Avenue."

So what's happening? The number of men between the ages of 18 and 34 watching prime-time television has dropped by 5% this season, according to Nielsen. What's more, 20% of the nation's households are expected to have personal video recorders such as TiVo by 2007 -- enabling viewers to skip TV ads altogether. Meanwhile, 69% of American magazines experienced newsstand sales declines last year, according to Capell's Circulation Report.

In 2001, global ad spending plunged 7% to $440 billion. Ad agencies laid off 40,000 employees—19% of their workforce. Over the next two years, no growth in ad spending is expected. In fact, Bernstein Research predicts that 2004 will be the fourth year in a row that advertising company stocks underperform the S&P 500 -- something that has never previously occurred.

It's time to begin exploring new approaches to marketing. No, it's not time for twisted web campaigns like Burger King's "subservient chicken." Nor am I pleased about the tired ghetto act that Mattel has been trying to foist on my kids. The advertising world, as Randall Rothenberg notes, has run out of ideas.

Not that this completely addresses the customer acquisition problem (which drives most ad spending), but it's my sense that our marketing resources increasingly will shift from discrete "campaigns" to continuous "interactions" -- from the unaddressable mass to the interested individual. Investments in loyalty programs and engaging customer clubs may even rise. Whatever the case, new models must be explored. The Ad Industry has nothing new to offer.