CAMPAIGN REPORT ON NEW MEDIA: The media specialists - As the internet becomes increasingly central to the communications process, traditional media agencies are worried that they are losing business to a new breed of interactive specialists. By Robert Gra

Looking back, it’s clear that 1999 was the year online advertising really took off in the UK. Advertisers spent about pounds 50 million online last year, a drop in the ocean compared with TV or print spend, but a massive leap from the negligible sums spent in the previous few years - when internet penetration was far lower and the medium was misunderstood in many quarters.

Looking back, it’s clear that 1999 was the year online advertising

really took off in the UK. Advertisers spent about pounds 50 million

online last year, a drop in the ocean compared with TV or print spend,

but a massive leap from the negligible sums spent in the previous few

years - when internet penetration was far lower and the medium was

misunderstood in many quarters.



Suddenly, on the back of the dotcom boom and a growing awareness among

more traditional advertisers of the interactive and

relationship-building possibilities offered by online, a raft of new

agencies emerged - distinct from full-service new-media agencies - to

specialise in internet planning and buying.



Many traditional media agencies appear to have been caught

flat-footed.



’1999 was the first year you could really call it a market,’ Ray Taylor,

the managing director of the new-media specialist eyeconomy, says. ’My

view is that the developments of the best elements of online advertising

will come from the specialist independents, companies such as ourselves

and the media21s and i-levels of this world. The true specialists will

be making all the headway and all the running.’



The agencies that Taylor mentions, media21 and i-level, are arguably the

two highest profile new-media specialist start-ups of last year. Both

have senior staff with impressive track-records in new media, the kind

of talent that is in short supply given that the industry is so young.

This gives the start-ups an edge over those traditional agencies whose

digital teams have less experience of planning and buying online.



’I think that the skills level of the market has changed a bit but not

in line with the growth of the marketplace,’ Charlie Dobres, the i-level

chief executive officer, says. ’It takes three years to get three years’

experience - you can’t suddenly acquire it.’



Pete Robins, the director of media21, says: ’Some of the bigger agencies

are looking at plugging a gap. They realise they should have done this

sooner.’



Carat is among the traditional agencies that are building a presence in

the digital marketplace. It has invested heavily to bump up its Carat

Interactive arm from six to 21 staff and brought in Robert Horler, the

former Emap Online commercial director, as joint managing partner with

Richard Wheaton. Clients include Abbey National, Sega, Philips, American

Express and News International.



Wheaton argues that traditional agencies with digital capabilities are

in a position to offer more than new-media independents. ’We can offer

planning and strategic advice across all media. They can’t replicate

that. This year our skills will go beyond the realms of the

specialist.’



Dobres, not surprisingly, thinks the specialists will continue to

prosper. ’People like Carat and Zenith do a bit of what we do but if

you’re not a specialist you can’t do it all. It’s not the same. So we

don’t see them as a threat. We know what we can do and what can be

done.’



Several of the traditional media agencies have been slow off the mark

with a digital offer and have been sniffing around the marketplace

looking to acquire one of the new breed of digital agencies. In part

this is because it has been hard for some of the big guns to recruit

top-notch staff.



Although they can offer good salaries, a lot of young talent is

attracted to the start-up culture of the specialists.



Taylor at eyeconomy says: ’Some of the traditional agencies are paying

ridiculously high salaries for people with little experience. They are

concerned - quite rightly - that they are going to start losing some of

their budgets to online. They should stop pretending they can do online

properly if they can’t and start forming sensible partnerships with

independent agencies that specialise in new media and know it well.’



The growing maturity of the internet has spawned bigger budgets. Dobres,

for instance, says that i-level now has four clients that spend more

than pounds 1 million each per year on online advertising. But in

committing more money to the medium, clients have demanded greater

accountability.



According to Julia McNally of ZnSpace, the media offshoot of the

creative digital agency Zinc that was established last August, measures

such as cost per acquisition are far more telling than plain

click-through rates. Post-click evaluation is becoming part and parcel

of the offer of the better new-media specialists.



McNally, who notched up much of her new-media experience when working in

senior sales positions for the media owner VNU, also feels that the

online sales networks such as DoubleClick and 24/7 have clouded some of

the issues and allowed less informed agencies to buy purely on

aggregated numbers rather than focusing on the targeting that the

internet allows.



Robins adds that one reason the newcomers may have an edge over the

established players is because the bigger businesses are more fearful of

making mistakes. Whereas he is firmly of the view that experimentation

is necessary. ’You have to be genuinely dynamic and be prepared to try

things and get them wrong. The interactive media space is still so

new.’





DIGITAL MEDIA AGENCY START-UPS



eyeconomy



i-level



media21



Profero



ZnSpace





DIGITAL MEDIA ARMS OF ESTABLISHED



Media Agencies



Carat Interactive



Digital Services



Mediapolis



MindShare Digital



Outrider (CIA)



PHD IQ



Starcom Motive



Zenith Interactive Solutions.



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Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).