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.



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 £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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