Bastholm sent the memo to staff, which was obtained by Agency Spy, to Ogilvy NY creatives on Friday after he had reviewed recent digital creative efforts at the WPP Group owned agency.
He said he had looked at six recent website launches and they left him "with a migraine and the beginnings of a depression".
He accepted that creative sacrifices were made to please clients, but said the standard was downright disturbingly bad.
"When the level of quality across the board is downright disturbingly bad, then it is institutional and I have to attribute it to an internal lack of understanding of what makes for good digital work in 2010. This gives me cause for great concern," Bastholm wrote.
He then went on to list his main areas of concern. He began with design and said that the agency's work appeared to have originated from 2001 and "with a few exceptions...dull, boxy and uninspiring".
He then jumped to content and said damningly that rather than serve it up as experiences it was presented as brochure-ware.
"There's little to nothing to engage a consumer in a fun and rewarding experience that they can share and talk about," he wrote.
He added that in order for the agency to be taken seriously it had to do a lot better at digital.
His only praise came for the agency's long term work on IBM, which was included on a collection of work curated by Google Creative Labs. He said the IBM team made the agency look good for its work on US Open Point Stream.