CAMPAIGN REPORT ON TOP 300 AGENCIES: New-media agencies arrive - The bursting of the dotcom bubble last year brought more credibility to the new-media industry as its surviving players moved into the mainstream

Last year saw the new-media agency industry come of age - as consolidation within the market continued, many of the major players gained a degree of credibility and maturity not previously achieved by any of the new-media agencies.

Last year saw the new-media agency industry come of age - as consolidation within the market continued, many of the major players gained a degree of credibility and maturity not previously achieved by any of the new-media agencies.

Campaign's last new-media league was published in May 2000, and generated a great deal of interest. The rate of growth and the increasing significance of digital, both in terms of design and as part of the marketing mix, is represented by the fact that the new-media agencies have now become part of Campaign's annual Top 300 bible and a vital part of the agency landscape.

The digital agencies have left the ghetto and made it into the mainstream.

Research for the new-media agency league was done in-house. Agency fee income has been used to rank the agencies as it was decided that this was the most reliable indicator. Of course, this method has its pitfalls and a number of the online media specialists have refused to supply their figures because, unlike the creative agencies, they felt that their fee income would give away too much information. Perhaps most noticeable by its absence is Campaign's new-media agency of the year, i-Level.

The league includes 12 reports on some of the agencies that grabbed attention last year, whether for the right or the wrong reasons.

The past 12 months have not been an easy ride - the dotbomb drizzle which turned into a downpour in the year's final quarter took its toll on the new-media industry. However, to a certain extent the digital agencies were not hit as hard by the downward trend because so many of their clients are bricks-and-mortar companies.

Therein lies one of the biggest confusions that bounced around the business world last year, which was that only dotcom companies did any digital marketing - an assumption which could not be more wrong. Sure, many of the web agencies were forced to streamline - resulting in some substantial redundancies - but this was more to do with over-zealous expansion strategies and too many staff with not enough work than with any of their clients going bust. Bad business strategies on the part of the agencies as businesses themselves, rather than poor stamina on the part of their clients, was as much if not more to blame for the agency slump which struck towards the end of 2000.

Consolidation was a key market force - Grey bought the online media specialist media21 and rebranded it as Beyond Interactive. The new agency, which is now part of a global network, is in the process of consolidating into a full-service new-media ad agency. Hyperlink Interactive was bought by Cable & Wireless, and the two big web players Pres.co and Foresight combined to form Wheel. The direct marketing agency Evans Hunt Scott and the web agency Real Time Studios joined forces in March to create a consolidated business model as the new-media industry lamented the lack of integration between clients' off- and online marketing strategies.

Despite the trend for consolidation, however, the pure specialists excelled.

I-Level stuck to its guns and continued to provide solely new-media planning and buying solutions - which helped it pick up a couple of IPA Effectiveness Awards. Grey Interactive folded all of its online media activities into sister agency Media.Com, leaving it to focus on creative and strategy and allowing Media.Com to get on with what it does best - media. The DeepGroup kicked off the year by dividing up into separate companies catering to different client needs.

Mark Cridge took the helm of Gluemedia, DeepGroup's online ad specialist, and the company also dedicated groups to design, strategy and web architecture. Dalgit Singh, the creative director at Digit, built on the agency's creative credentials, and the new-media and marketing agency Lateral launched a network, buying in separate companies to deal with demand for services, backend solutions and broadband interface design.

Expansion was also on the new-media agency agenda. I-Level hit Benelux, Profero made inroads into Spain with the launch of Profero Iberia and Quantum New Media opened a Scottish office and made plans for hitting Europe. Deepend expanded to New York, San Francisco, Toronto and Sydney, and on the cusp of the new year AKQA revealed that it was branching out into a global network with help from Accenture.

AKQA was the runaway winner in this year's new-media league, with more than pounds 35 million more income than its closest rival, Agency.com, which came out second despite a rocky year.

It is worth noting that at the time in which research for this year's league was done, a lot of the agencies had the support of international networks. However, a number of companies only opened offices abroad in the middle or towards the end of the year. Although only UK-based work is counted, international presence plays a strong part in building a company's reputation.

There is no doubt that next year, this league will probably be singing a very different tune as the next 12 months will be a make or break year for many of the players in the new-media industry.



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