CAMPAIGN-I: Spotlight on: Ogilvy Interactive - How will Tempest be integrated into WPP's OgilvyOne stable? Online uncertainty did not stop Ogilvy buying Tempest, as Deborah Bonello reports

Last week was possibly one of the darkest for the internet industry

- the downgrading of the online advertising market that began last year

was accompanied by news that Yahoo!'s chief executive in the US, Tim

Koogle, was stepping down from the post. Koogle's departure coincided

with a warning from Yahoo! that it would miss its already lowered

expectations during the year.



Why? A drop in online ad revenue because of market uncertainty. That,

and rumours that MSN may charge subscribers for the use of its service

because online ad revenues are not proving to be enough to sustain the

company, painted a rather bleak picture.



Forecasts from UK companies suggest that the European online advertising

market is going to be considerably less damaged than that in the US.

Forrester is predicting a 74 per cent growth in the European online ad

market this year. However, online adspend did drop towards the end of

last year. Marc Cohen, the European adwatch manager at Forrester, said:

'In contrast to the lower overall online advertising spending, November

and December 2000 showed increases in the number of companies

advertising, but they were getting lower rates for each ad

purchased.'



This quiet period in the first half of the year was also predicted by

Forrester, with steeper growth expected in the second half as

traditional advertisers replace dotcoms that are tightening their

belts.



Merrill Lynch's predictions are more conservative, predicting growth of

25 per cent in Europe.



Adrian Baker, the managing director of DoubleClick UK, said:

'Advertisers are recognising the importance of talking to their target

audience on niche sites. As the maturity of the market grows, so does

the maturity of the users and these users spend more time on sites that

they have found right for their interests. This understanding has

prompted advertisers such as Volvo to debut its S60 sedan exclusively

online and British Airways introduced its flat beds across Europe

online. We are seeing the trend of traditional advertisers coming online

globally.'



Despite the constant state of flux characterising the industry,

consolidation in the agency sector continued. Ogilvy Interactive, which

is part of WPP's OgilvyOne, acquired the independent online planning and

buying media agency Tempest. A veritable veteran at the grand old age of

two, Tempest was one of the first agencies to launch as a specialist in

the market.



The acquisition of Tempest adds another string to Ogilvy Interactive's

bow. As well as building sites, brands and online strategies and

creating e-mail and viral campaigns, Ogilvy & Mather's digital shop will

now also take full control of clients' online media strategy. But how

has Ogilvy Interactive managed so far? Largely with help from mdigital,

the digital branch of its WPP sister media agency MindShare. Also in the

fold is The Digital Edge, part of The Media Edge, which came with WPP's

Young & Rubicam acquisition. Will the arrival of Tempest's interactive

TV ads change the structure of WPP's existing media relationship with

Ogilvy Interactive and its clients? Unlikely. Nigel Sheldon, a managing

partner at mdigital, said: 'Ogilvy Interactive is a sister company of

ours and we will continue to work with them.'



With the acquisition of Tempest comes the formation of the third online

planning and buying outfit, Ogilvy Interactive Media. This new outfit is

being headed by Richard Collins - Tempest's founder and original

managing director until last week. Tempest will continue to operate as a

separate agency and brand from Ogilvy Interactive Media and, according

to insiders, mdigital will also continue to work with Ogilvy Interactive

on its shared clients.



To some this might seem like a shrewd move by WPP to cover the online

media buying industry. To others, however, it could be perceived as

putting too many fingers in the same pot.



OgilvyOne's chairman, Nigel Howlett, is of course convinced that this is

the best way: 'There were some skills in the digital space that Ogilvy

Interactive didn't have and urgently needed.' Of course, this isn't the

first time that Ogilvy has bought in digital skills. It acquired the

new-media shop Noho Digital, which became Ogilvy Interactive, in June

1999 to boost its digital offering and its managing director and

founder, Tim Carrigan, is now a managing partner at Ogilvy

Interactive.



'Our key focus is to provide the kind of services which our clients

need,' Howlett said. Obviously, but the presence of not one but three

similar online media buying houses could serve to confuse rather than

reassure clients, surely? Howlett said that one of Tempest's

differentiating services and a key sub-brand that will survive within

the agency as well as being brought into Ogilvy Interactive is its

AdvancePositions system, which optimises search engine listings

positions for clients.



One industry source said: 'My view is that this is clearly the beginning

of the end of Tempest.' True, the online media agency didn't have the

best year last year, but then no-one did, really.



So, as they say, everything has worked out beautifully. Tempest gains

the external support it needed from the advertising industry giant, and

Ogilvy Interactive expands into online media. Whether they will all live

happily ever after is a different question.



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