I think we are long past the time for substantive debate on whether the traditional marketing model is dead. There is NO question that we are deeply in the model that is alternatively referred to as Marketing 2.0 or Social Media Marketing or, well, you pick the cutting edge nomenclature. individuals and organizations will be forced to adapt or will perish (quickly or slowly and painfully - their choice) as they always are when the unstoppable force that is technological innovation challenges their stasis and makes their comfort zone not nearly so comfortable. Sort of like global warming for the world we have known as marketing 1.0.
Marketing in the traditional model has, for the most part, been a very linear process. Market research and analysis identifies both latent and active market opportunities, strategy aligns those opportunities with organization strengths (core competencies), products and services are designed/developed, positioning and branding strategies are created, value propositions are broadcast or narrowcast to the market via communications and advertising channels, and, hopefully, customers are nurtured and cared for in an effort to retain and expand share of wallet, feeding data points back into the market research effort. This marketing 1.0 model has been primarily a closed-loop process that engaged external constituencies (the customer, partners) generally in a controlled fashion.
Social media and the digital platforms that enable it have made marketing much more about the ad-hoc, the organic, the open-ended conversation, than traditional marketing ever could have. This is no longer the classic linear, closed-loop process of the 20th century. In this world of the marketing 2.0 model, Don Draper's head explodes as he and the team at Sterling Cooper attempt to get their hands around what it means to no longer control the dialogue that surrounds a company's products and services.