NEW MEDIA: The New Order - The dotcom dream has been hard hit, so what does the lie of adland look like since reality has arrived in the new-media world? Deborah Bonello reports

The pace of change within the new-media industry over the past few

months remains breakneck, despite the lambasting of all things digital.

Since the publication of Campaign's new-media agency league in February

as part of our top 300, the agency landscape has shifted

substantially.



The strongest trend to appear within the market has been redundancies.

Anyone who was anyone was laying people off, with the size of the cull

reaching such a scale that it was no longer newsworthy. The full-service

digital shops in the US were hardest hit and this, of course, had a

knock-on effect in the UK.



Predictably, the general e-commerce fallout that began in 2000 is often

held up as a cause for all the problems being experienced by most of the

new-media agencies today. But anyone who switched on a TV, walked down

the street or read a magazine would have noticed that the majority of

the marketing budgets of most dotcom companies was in fact spent

offline.



Dotcoms rarely, if ever, form the basis of any decent digital agency's

client roster, and there lies perhaps the market's greatest mistake -

the confusion of e-commerce with e-marketing.



They are not one and the same - if a business went bust after

advertising on posters, industry speculators wouldn't blame the poster

industry, they would blame the business itself - surely? The fact that a

vast number of businesses that use the internet as their main channel of

delivery have curled up and died does not mean the channel itself has

collapsed.



The fallout among the new-media agencies was more a result of

over-zealous recruitment programmes and business targets from web shops,

and exaggerated market expectations.



The cynicism sweeping the market ignored the fact there was good news to

counter the bad - perhaps most significant were the figures for online

advertising revenue in the UK during 2000, which continued to grow.

Estimates varied - internet revenue surpassed cinema, according to

PricewaterhouseCooper's figures, and grew to pounds 154 million.



Forrester Research's estimates were more modest, calculating that the

total online ad revenue for 2000 reached pounds 97 million.



The new year started off with a bang when AKQA announced it was going

global, with a little help from Accenture (formerly Andersen

Consulting).



The digital shop rebranded a number of agencies, including the San

Francisco-based advertising shop Citron Haligman Bedecarre, as well as

two interactive agencies in the US and one in Asia. The details of the

agreement have been kept under close wraps - it is not clear if

Accenture took possession of any AKQA shares as part of the deal. If so,

how many? However, the appointment of the company's global chief

executive, Rick Hadala, formerly the chief executive of APL's North

American office, suggested management consultancy forces were at work

within AKQA, putting its creative process under the spotlight.



Consolidation within the networks also continued. Omnicom's direct

agency, Claydon Healey Jones Mason, and the network's i-shop,

Agency.com, came together to found a new company - Agency Republic. The

new shop plans to combine traditional and digital marketing expertise -

a model coined by last year's merger of Evans Hunt Scott and Realtime

Studios to form ehs:realtime - by bringing together staff from both of

the agencies as well as some new hirings. Havas brought its new-media

network Circle.com into the Euro RSCG Worldwide network after closing

its San Francisco office.



Interpublic's acquisition of True North introduced Modem Media into the

network fold, inheriting True North's 43 per cent stake in the agency,

which is a strong digital services brand both here and in the US. The

shift will see Modem going head to head with IPG's web shop, Zentropy

Partners, which has close ties with McCann-Erickson and Head New Media -

part of the Lowe Group.



Modem's IPG siblings are perhaps slightly advantaged due to their close

relationships with the holding group's traditional shops. However,

Modem's strong interactive TV work for some of Unilever's brands has

also made the agency something of a household name.



As the networks pooled their services, however, they also refined them.

The online marketing specialist, Beyond Interactive, was subject to

restructuring measures and after laying off about one-third of its

staff, the agency was brought in-house by parent company Grey to become

the online media planning division of MediaCom. Jason Dooris, previously

the managing director of Media.Com, will now manage Beyond (formerly

Media21) alongside its original founders Rick Sareen, Nick Suckley and

Pete Robins.



Tempus' digital agency, Outrider, formalised its relationship with the

online marketing creative agency Incline by bringing it into the

network, a deal that will see it work alongside the digital production

agency Good Technology. And Agency.com launched its I-traffic division

to focus purely on digital marketing accounts, and to differentiate its

web building and e-commerce skills from its new media marketing

services.



The demerger of Wheel was an event that kept the cynics happy. The

digital shop was formed as a result of a merger in the middle of last

year between the two web shops, Pres.co and Foresight, but after failing

to find a way of working together efficiently the two companies decided

to part company. Pres.co will maintain the Wheel brand, whereas

Foresight becomes, well, just plain old Foresight again.



The furore about the launch of a number of bespoke interactive TV

advertising agencies such as Blink and Deepend's Sleeper, and Phosphorus

ended in an anti-climax when no strong creative work proceeded to emerge

from the shops.



However, the past month has seen a slurry of interactive TV advertising

campaigns launching for the likes of Unilever, P&G and Panasonic.

Sleeper has signed a series of deals with some of the major traditional

production companies, which suggests the creative block that has

infested the agency might have passed. That, and the recent

reorganisation of both Open, which is being brought into Sky

Interactive, and ONdigital - now ITV Digital - should also shake things

up.



There are still a number of major shifts on the horizon within the ad

networks - the future of Razorfish's European network has a big question

mark above it. The end of this year will see the separation of the men

from the boys, and interactive TV advertising is about to go

mainstream.



Top 50 UK agencies ranked by declared income

Rnk New media Holding Declared Declared % new Staff

specialists company income billings media 2000

(pounds m) (pounds m) work

2000 2000

1 AKQA Independent 60.00 250.00 80 170

2 Agency.com Omnicom(38%) *24.35 n/s 100 250

3 Wheel The Wheel Grp 22.00 27.00 85 380

4 Razorfish Omnicom(7%) 19.60 17.00 100 150

5 Modem Media UK IPG(43%) *15.00 n/s 100 150

6 Revolution Chinadotcom 11.20 11.20 100 50

Corporation

7 Hyperlink Cable and 11.00 11.00 100 100

Interactive Wireless

8 Outrider Tempus 8.60 12.00 95 125

9 Seven Seven 8.00 8.00 100 57

Interactive Worldwide

10 Circle.Com Havas 7.60 7.60 100 128

11 Rufus Leonard Independent 7.50 n/s 85 130

12 Quidnunc Independent 7.29 13.97 100 n/s

13 Victoria Real Endemol Entert- 7.00 7.00 100 130

ainment UK(50%)

14 Global Beach Global Beach 6.50 6.10 100 60

Group

15 Traffic AMV 6.00 12.00 100 100

Interactive

16 Zentropy IPG 5.81 n/s 100 75

Partners

17 Tenten Independent 5.70 5.70 100 27

Digital

18 Syzygy UK WPP 5.40 n/s 100 90

19 E-Marketing Independent 5.25 5.25 100 41

20 Grey Grey Commun- 5.20 5.20 100 120

Interactive ications Grp

21 Ccg.Xm Cordiant 5.13 22.42 100 50

Communications

22= design net Global Technlgy 5.00 n/s 100 30

Communications

22= Zinc Havas 5.00 5.00 100 90

24 Deepend Independent 4.55 4.55 97 100

25= Interesource Interesource 4.50 4.50 100 60

New Media Holdings

25= FI System/Brand FI Systems 4.50 n/s 75 115

New Media

27 Reading Room Independent 4.38 4.38 100 37

28 DNA Consulting Independent 4.30 4.30 100 65

29 Blue wave Independent 4.20 4.20 100 68

30= Tribal DDB DDB Worldwide 4.00 20.00 100 68

London

30= Siegelgale Siegelgale 4.00 5.00 60 95

Holdings

32= AMX Havas 3.60 4.00 100 70

Communications

32= Netsite Integra Net UK 3.60 3.60 100 65

Productions

34 e-xcentric Independent 3.40 2.80 70 n/s

35 Black Info. Independent 3.30 3.30 100 35

Design

36= cScape Strategic Netb2b2 3.20 3.20 90 52

Internet Servs

36= Good Technology Tempus 3.20 3.20 100 53

38 Saatchi Vision Publicis Groupe 3.12 10.60 80 24

39= Domino Systems Independent 3.10 3.10 100 115

39= Green Cathedral Independent 3.10 3.10 100 23

41 Publicis Publicis Groupe 3.00 6.00 100 50

Networks

42 Feref Independent 2.80 n/s 50 30

43 Fortune incubator 2.70 2.70 100 65

Cookie UK Brainspark

44= Profero Independent 2.60 10.83 100 68

44= Precedent Independent 2.60 n/s 80 45

44= Snow Valley Independent 2.60 2.60 100 35

47 Absolute Independent 2.40 2.40 100 n/s

Internet

48 Worldwide Xceed Independent 2.10 2.10 100 45

Group UK

49 Digit-Digital Independent 2.01 2.00 100 33

Experiences

50= Clockwork Web Independent 2.00 2.00 100 40

50= Quantum Independent 2.00 4.50 100 35

50= Javelin Group Independent 2.00 n/s 90 18

Sources: Campaign

(* estimated income)



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1 Job description: Digital marketing executive

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).