In 2004, online advertising's share of the ad market broke the 3 per cent barrier for the first time and, with UK revenues forecast to reach more than £500 million pounds in 2004, is now closing in on radio.
Although it was a year in which the larger advertising agencies began to wake up to the opportunities that exist online, it is still within the digital independents that the best work and the strongest new-business performances can be found.
Campaign's Digital Agency of the Year, for the second year running, is Dare. Right at the end of the year, the agency capped a strong new-business run when it won the long-running pitch for the £5 million Wanadoo account, beating Agency Republic, Profero and TBWA\GGT.
The Wanadoo win reinforced Dare's pitching credentials - while some of its retained business wins across the year came directly out of its relationship with Bartle Bogle Hegarty, Wanadoo did not. The account will see Dare working closely with the above-the-line agency M&C Saatchi on the future positioning of the Wanadoo brand.
Dare's managing director, Mark Collier, cited being able to demonstrate effectiveness as one of the reasons for the win, something the agency sets great store by.
In 2004, Dare introduced value reports across its portfolio of clients to measure the effectiveness of its campaigns. The results make for good reading: this year's online acquisition campaign for Barclaycard, for example, was its most successful ever, with volume targets exceeded by 142 per cent and cost per acquisition targets by 48 per cent.
The phone-meets-camera "peel" campaign for Sony Ericsson, which used an interactive element allowing users to peel back the banner to reveal the camera on the back of the phone, broke new ground in terms of interactivity. Dare found that 17 per cent of users interacted with the ads, versus an average rate of 8 per cent, and that users were engaged for an average of 46 seconds (against an industry average of just 13 seconds).
But effectiveness springs directly out of creativity, and Dare is no slouch in the creative stakes either, as it proved across 2004 with campaigns for Sony Ericsson, Lynx Touch and Thomson Directories. The Quickshare campaign for Sony Ericsson used interactive streaming video in an expandable banner to show a scene from a bar. Users were invited to take a "live" photo of any part of the scene they liked by dragging a camera phone across it.
Some award-winning work for Lynx Touch, meanwhile, encouraged users to unzip women out of their clothes and set them challenges to improve their "touch", and the campaign for the retained client Thomson Directories saw the Thomson catwoman sent cartwheeling across computer screens.
As well as Thomson Directories and Wanadoo, Dare also picked up retained briefs for Tetley and Woolworths in 2004, the latter of which involved the development from scratch of a digital marketing programme. The agency also won two accounts from COI Communications and new assignments for Lever Faberge, as well as project-based business for Diageo's Johnnie Walker brand and FilmFour.
Growth also came from existing clients, particularly Barclays and Sony Ericsson, which commissioned Dare to develop the agency's first US work - a campaign to support the launch of the Z500 phone.
All this helped the agency demonstrate dramatic growth in turnover, income and profit across 2004. Turnover was up 213 per cent to £3.6 million, gross income increased by 216 per cent to £3.2 million and net profit grew by 337 per cent, to more than £700,000.
Its commendable focus on planning - an area often misunderstood by digital agencies - led to Dare expanding its planning team to five (more than 10 per cent of its total headcount) and forming a partnership with Basis Research to find out about consumers' online motivations.
On the creative side, the appointment of Agency Republic's creative director, James Cooper, one of the brightest stars in digital advertising, to work alongside the Dare creative partner, Flo Heiss, looks set to add further to the quality of Dare's creative output. Cooper will join in the New Year, just in time to begin working on Wanadoo.
Glue London came a close second to Dare this year, based on a strong new-business performance achieved in the absence of any handy link to an above-the-line agency. In fact, glue regained full independence at the start of 2004, when it used cash reserves to buy back the 32 per cent stake in the business previously held by St Luke's.
Retained account wins this year include More Th>n, The Number 118 118, Masterfoods Snackfoods and the advertising business for Dailymail.co.uk and Mailonsunday. co.uk, after a three-way pitch against the incumbent, Wieden & Kennedy, and Delaney Lund Knox Warren & Partners.
The agency also won roster places on the BSkyB and Unilever accounts, helping glue's income grow by close to 50 per cent, from £2.01 million in 2003 to £2.9 million in 2004.
Creatively, glue picked up two gold Lions at Cannes for Pot Noodle's noodleweb and for the "hysterical girlfriend" viral game, plus a bronze Lion for its "give up" campaign for the Royal Marines.
Agency Republic also had a great new-business year, winning the £10 million online Egg account in partnership with its sister agency Claydon Heeley Jones Mason. It also added the £3 million Parcelforce account, convincing the client to switch its entire spend online in the process, as well as the digital briefs for Blockbuster, Friends of the Earth, O2 Ireland and Dunlop. New-business wins helped the agency achieve 77 per cent year-on-year revenue growth.
Finally, Profero deserves an honourable mention for winning the pan-European and the pan-Asian media account for Apple, a win that led to the agency converting the U2 Vertigo television commercials online.
Good creative work for the Home Office and Ask Jeeves capped an excellent year for the agency, in which it launched offices in Hong Kong, Beijing and Shanghai and set up a UK-based production company, Inventa, in association with Radio One's Pete Tong.
Recent winners: Dare (2003); glue London (2002); no award (2001); i-level (2000).