Up until very recently, the advertising industry has managed to
grab the wrong end of the stick where the digital and online revolution
is concerned. Or, let’s be generous, it has managed to confuse the
long-term theory with the now-to-medium-term reality. All the hype has
been about agencies setting up specialist operations to create, plan and
buy online advertising campaigns for mainstream clients. The bad news is
that the budgets involved have largely been five- and six-figure sums
and scores of online advertising specialists have failed.
So much for hype. It’s actually a mirror image of the real story, which
is all about digital and information technology operations - everything
from hardware and software outfits to companies specialising in internet
service provision, portals and online retail - spending hundreds of
millions in old-fashioned mainstream media as they seek to become
It’s a massive growth area - so much so that in the US there are
high-tech companies that are finding it difficult to appoint a consumer
agency of any sort. Too many clients are chasing too few agencies.
So perhaps the question is not so much why Initiative Media launched a
high-tech media planning and buying agency, Initiative.com, last week,
but why it’s taken so long for any company to do so. Actually,
Initiative wasn’t the only company active in this area last week - Young
& Rubicam revealed that it has bought the Banner high-tech agency - but
the Initiative move is a statement of intent and the brand will be
rolled out globally.
Jeffrey Merrihue, Initiative’s chief executive and head of Europe,
described the move as the first major evolution of the company since its
formation almost a decade ago. Initiative.com is launched on the back of
the international Sun Microsystems win (also announced last week) and
will service Initiative’s existing IT clients, Cisco Systems and
Mannesmann VDO. The operation will be headed by Simon Foster,
Initiative’s communications planning director.
Will we see other agencies follow suit in setting up IT divisions? And
does it have broader implications for the industry? If you can set up a
specialist IT spin-off, why not ones for, say, retail?
You could argue that the IT sector is unique. IT companies have always
used specialists, typically business press buyers with a feel for
technology and its users. Now that the battle has moved into our living
rooms they need media companies that can combine the critical mass to
buy TV effectively with a feel for the digital world.
Merrihue admits he’s surprised that no-one else has made a decisive move
into this market: ’We developed the idea a while ago but we approached
it conservatively - we wanted to have the clients on board first. I was
sure competitors would do it before us.’
Will they now follow suit? Paul Taylor, the managing director of BMP OMD
(which has several high-tech clients), says he has no plans to do
something similar. He adds: ’We are able to pull together expertise from
a number of specialist divisions including Optimum Action (direct
marketing) and BMP Interaction (online advertising). We can demonstrate
an affinity for the new medium.’
Others are able to demonstrate a similar affinity. And some might argue
that if you spin off too many separate disciplines there’s a danger of
diluting your core proposition. And you could argue that it doesn’t
really matter either way - there’s so much IT business out there that
even the least clued-up specialists will get more than their fair share
That’s not the point though. This could be a new litmus test, a
differentiator between media’s leaders and followers.
As Foster puts it: ’We’ve entered the second industrial revolution and
it’s IT fuelled. The growth opportunities for agencies have to be
enormous. The least you can say is that you’d be pretty stupid to ignore