"Full-service agencies’ value proposition has been that they can execute a client’s message through every conceivable medium."
This is not very accurate. "Full-service" usually means that an agency both makes the ads and buys media to place them. There are many agencies that do only one or the other, and then there are subsets of each: digital-only shops, ideation-only shops, search-only shops and so on. "Full-service" is not a bad thing, at least in theory, because the fewer agencies you have working on different pieces of the same project, the smaller the chances that the result will be a watered-down compromise between competing organizations. The real reason why big agencies are big -- which is what I think OP is really arguing against -- and will stay big is scale. A national retail chain will produce thousands of banners a year, dozens of TV commercials with dozens of regional variations, hundreds of radio spots, thousands of catalog images and pieces of copy. A single unit of ad output may require input from dozens of people. The OP has an idealized model of the business that ad agencies are in, but creative ideation is only one line item in an advertising budget.
“Advertising is immoral, not because it is inherently insincere, manipulative, and intrusive, but because it is inefficient.” -James Oyle, Advertising Director
I suppose by definition efficient advertising only informs me about products I need and/or want when I want them. The result being the highest possible conversion rates and best customer experiences also ensuring that customers will rave about it.
Inefficient advertising takes advantage of law of large numbers low-cost spammy channels, inundating a large majority with crap they don't care about, wasting their time and even successfully selling people who don't want or like your product.
So in that sense it would seem to be more "moral".
You argument assumes inefficient advertising invades privacy less, which I'm not certain is true, or that an invasion of privacy is necessary to be efficient. Again since it wasn't really defined either way I suppose it's debatable what is meant by efficient or inefficient.
I would suggest that ideal advertising/marketing should have a viral or organically promoted component to it. I'm always going to be more likely to be interested in a product that someone I trust recommends or that I'm directly seeking rather than is being pushed to me. Efficient advertising would ideally be more passive rather than pushy and active and rely on and encourage organic promotion by having the right fit for the audience.
This is not very accurate. "Full-service" usually means that an agency both makes the ads and buys media to place them. There are many agencies that do only one or the other, and then there are subsets of each: digital-only shops, ideation-only shops, search-only shops and so on. "Full-service" is not a bad thing, at least in theory, because the fewer agencies you have working on different pieces of the same project, the smaller the chances that the result will be a watered-down compromise between competing organizations. The real reason why big agencies are big -- which is what I think OP is really arguing against -- and will stay big is scale. A national retail chain will produce thousands of banners a year, dozens of TV commercials with dozens of regional variations, hundreds of radio spots, thousands of catalog images and pieces of copy. A single unit of ad output may require input from dozens of people. The OP has an idealized model of the business that ad agencies are in, but creative ideation is only one line item in an advertising budget.