Who's Been Winning?

There has been lot’s of discussion in the creative agency world about the impact of digital marketing and how agencies should respond.  It appears every agency from advertising networks like BBH to traditional DM shops like OgilvyOne to creative hotshops have put “Digital at the Heart of the Agency.”

Only this past May Alastair Reid reported in Campaign a reasonably balanced article about the increase in digital awards being won by traditional agencies, and brought out the classic Goodby turnaround in the US a few years ago.

But whose really been winning?

Looking at the 2008 NMA Top 100 that was just released last week, we see that Digital agencies have seen another year of solid growth — averaging 20% across the list.  In his introduction Michael Nutley also makes a balanced argument for the state of the industry.

But maybe we are being too analytical — if one uses the simple measure of headcount over the last 5 years, we can see where the growth has been and inferr that this represents shifts in revenue.

The top digital agencies have had an amazing run since 2003.  I take 2003 because it is 5 years ago and it was solidly after the collapse in 2001-2.  From ad hoc conversations I think that agencies like AKQA have gone from say 120 in 2003 to over 350 today — that is 191% growth in London alone.  Dare was probably about 60 people in 2003, and now reports having 174.

I’ll need to do more digging to get good numbers but here is a basic table I’ve pulled together from industry articles and league tables and rough memory.  It will be interesting to check in another year’s time.

Agency 2003 2008

Digital Specialists

AKQA London
Dare London
Agency.com
LBI
iris Digital
120
40
30
350 (NMA)
174 (NMA)
115 (NMA)
352 (NMA)
33 (NMA)

Integrated DM/Digital

Proximity London
OgilvyOne
DraftFCB
220
210
282 (ipa)
270
185 (ipa)

Advertising
Grey
JWT
McCann
BBH
AMV BBDO
200 (ipa)
246 (ipa)
245 (ipa)
450 (ipa)
400 (ipa)

Independents

iris
Mother
Crispin
450 (ipa)
125 (ipa)

The End is Near (again)

Shops Stand to Lose in Digital Revolution

November 14, 2007 By Brian Morrissey

Agencies have the most to lose in the new digital order, even more than broadcasters, per industry leaders surveyed by Accenture.

NEW YORK Changing consumer habits, driven by the shift from analog to digital media, are revolutionizing the ad industry. But that could spell bad news for agencies, according to a new study by Accenture.According to 70 industry leaders surveyed by Accenture, agencies have the most to lose in the new order, even more than broadcasters. When asked who would fare worst in the transition to digital advertising, 43 percent said agencies, compared to 33 percent who answered broadcasters. Cable operators were third with 10 percent. No respondents chose search companies or digital ad specialists. IBM

The end of advertising as we know it

IBM Institute for Business Value study

Imagine an advertising world where… spending on interactive, one-to-one advertising formats surpasses traditional, one-to-many advertising vehicles, and a significant share of ad space is sold through auctions and exchanges. Advertisers know who viewed and acted on an ad, and pay based on real impact rather than estimated “impressions.” Consumers self-select which ads they watch and share preferred ads with peers. User-generated advertising is as prevalent (and appealing) as agency-created spots.Based on IBM global surveys of more than 2,400 consumers and 80 advertising experts, we see four change drivers shifting control within the industry.

Advertising v Interactive Advertising

It is a common theme in the traditional advertising world, and direct marketing world, and sales promotion world that creatives come in sets of two. Art Director and copywriter. They work as a team, are hired as a team and even move agencies as a team.

This makes sense when the agency’s work is primarily a concept — it would be a tough job if the creative blackbox had only one lone hipster sitting in a dark corner, eyes rolling back in his head, trying to reason out whether it should be “Did somebody say McDonald’s?” or “Hey, sombody say McDonald’s!”

In this traditional world where what is given to a client is often a print ad or a script or mail pack, doubling up the creative team makes perfect sense. The account team scales based on the complexity of the client. The planner is a senior consultant and can work on his or her own. Design is a afterthought handled by “mac operators” that are part of the studio once the big idea has been cracked. Production just happens. The real magic is at the concept and with the account folk tapping their fingers, it is no wonder the creatives insisted on working in pairs.

So is this still relevant when our work is so much more complex?

A great campaign now has multiple channels, contact strategies that have to be delivered and synchronised over time, technical executions with data dependencies that require NASA-level project management and fifteen thousand different client teams that need to give their input.

In this world is it fair to put the weight of the delivery on even a superstar copywriter and art director? Can we expect them to know if a flash movie can branch based on if-then logic? If the layout breaks all of the information architecture rules Jacob Nielsen has so painstakingly taught the industry? Whether when a customer starts a card application, a promotion should be offered based on home address, income or key benefit? Whether an e-mail can come from a the sales team, and which of 15 key messages should be delivered in the opening paragraph? How to organise and edit 30 pages of text to make a good argument?

Mark Kingdon on Organic’s site says:

Great advertising was often created in “pairs” — a copywriter and an art director. In the digital world, the creation process is more complex. Strategists, designers, information architects, media specialists, and technologists must come together to create great experiences.

Organic Threeminds Blog

The next step is to look at how the digital agencies are structuring themselves — does RG/A have creative teams? AKQA? LBi? We know Sapient doesn’t, just as Accenture has never heard of them, so where will advertising move to?