Earlier this year, in the article ‘Can the UK be the next hub for the digital production industry?’, one of the production heads said ‘digital agencies are becoming the new dinosaurs.’ At first sight, as everything becomes digital, these seems a rather odd statement. However with the recent recession, advertisers have increasingly been consolidating their spend and been looking for integrated solutions – the AAR reported that last year the number of digital pitches decreased by 33% which compared to 21% across the whole industry.

Flo Heiss, Creative Partner at Dare Digital, to a certain extent agrees:

“There seems to be a new model of agency emerging (on the other side of the pond at least) an agency that understands how to create marketing for a digital world, as opposed to just digital marketing. Confused? Let me put it another way: agencies that create ideas that can be advertised as opposed to just advertising ideas.

New style production shops will collaborate with these agencies to make those ideas real. Just like TV agencies, digital agencies need to indeed move it on not to be left behind by those new model agencies.

You cannot define yourself anymore by the media you are filling with creative. Great ideas in 2010 and beyond are those that are media agnostic ideas. What is happening after the last 10 years of madness is a consolidation of sorts with specialists working together with agencies that have the client relationships. All quite old fashioned in a way. Difference is that the ideas that fly now are of a new ilk. They are still big ideas, but the right kind of big ideas with big fat participation running through it. Digital as a mindset not a skill set.”

Nick Bluden, CEO Profero London concurs “Digital advertising agencies do need to evolve unless they want to simply become a production agency. They will do this successfully if they combine their instinctive digital capabilities with the more considered brand and strategic capabilities that will enable them to sit at client’s top table.”

So what have the digital advertising agencies doing to respond? Well the first digital agency in the UK to make a move was Glue Isobar (previously Glue London) when it declared it’s ambitions to become an integrated agency late 2006 which soon led to high profile pitches on Eurostar and 3. They were initially unsuccessful in taking the integrated account in each case (Fallon picked up Eurostar while Euro RSCG picked up 3) although they did pick up the digital work. However in December 2008, 3 sacked Euro RSCG and appointed Glue London in their stead. Campaign stated ‘3 wanted to have a greater digital focus to its advertising, rather than using it simply to support the above-the-line activity.’

Since then Glue has continued to work on the integrated campaign with the latest campaign launching earlier in the summer:

In addition they have also delivered integrated work for the Sun, Google Chrome, Toyota as well as the Green Party, which included this party political broadcast:

The full campaign can be seen here

The criticism that may be levelled is that there has not been any really stand-out integrated work. However this is perhaps the UK ad industry still focusing on stand- out TV work when considering successful integration rather than looking at the overall piece. Mark Cridge, CEO of Glue Isobar commented “To think of clients as digital or integrated is becoming increasingly redundant. We always look first for the most interesting creative and strategic opportunities in whatever work we choose to tackle, regardless of media channel. This means tackling digital campaigns alongside integrated work with plenty of social thrown in for good measure. Our 3 relationship, which came to end recently, was a massive undertaking for a client who hadn’t advertised widely in the immediate period before our appointment. We’re proud of the work we created and have left them in a much healthier place than we found them – about all you can ask of any relationship.”.

More recently Dare announced that they will be merging with MBCD to form an integrated agency (see Dare unveils new management team following merger with MCBD). For the team at Dare this is a really exciting move and gives them a fantastic opportunity to deliver highly successful integrated work. Flo Heiss commented “It’s time to stop talking integrated and start creating some great work. I hope we can do exactly that off the back of the merger with the fantastic folks at MCBD. Fingers crossed now. High fives all round later. Hopefully.”

With regard Profero, I was fortunate enough to work alongside Nick Blunden last year to determine what exactly an agency like Profero in London becomes and our response was twofold – firstly we recognised that we had an amazing opportunity (with the founders leaving for more exotic climes) to hire in talent at the most senior level who come from a more ‘traditional’ advertising background to really drive an integrated advertising solution. By bringing Dale Gall and Elspeth Lynn in, the senior management was in fact more skewed to a traditional world and if it had been a start-up (with Nick part of the team) it would have certainly not been seen a digital offering. However as many digital agencies are finding labels stick (just look at the success of Pereira & O’Dell, a team out of AKQA, in winning integrated work once they had lost the label of AKQA), and clients find it hard to move away from these labels.

At the same time we recognised that digital can offer far more to be business than advertising and to a certain extent the integrated digital piece is far more valuable to a client than the integrated advertising piece. We therefore launched 2 new business units, Connect (that builds e-commerce websites) and Yabba (a conversation marketing agency to compliment the existing business of Performance. To a certain extent this is exactly what agencies like LBi and Sapient Nitro represent but at a much larger scale.

It did seem that across the agencies that still the biggest challenge digital agencies are having is that they still do not have the right level of client relationships which is something that was flagged up in this early last year (Trads v Digs – who will win. However no-one seems to be skirting away from the issue and there is no point in blaming the clients. Nick Blunden at Profero said “I think it reflects a combination of timing, and the relative lack of senior relationships and strategic marketing credibility that digital agencies have. Blaming clients for not being brave enough is too easy an explanation.”

Irrespective all the agencies participated were extremely buoyant about the opportunities ahead. They recognised that there would still be challenges but at the same time the opportunities are endless. Tom Bazeley of Lean Mean Fighting Machine said “In years to come, 2010 to 2020 will be looked back upon as a golden age in advertising. The pipeline of new platforms, formats, technologies, software, devices (let’s call them contraptions), will continue to gush forth. This will give every agency on the planet more opportunities to express an idea. Allied with mass audiences and the production budgets to match, the art of developing advertising will become more rewarding and exciting than it has been for fifty years. So, I don’t really care about what sort of agency box Lean Mean Fighting Machine lives in, I just care about using new contraptions + imagination to sell things. Whether this means we’re up against Dare, BBH, Apple or HBO isn’t really the point. If we’re good enough, we’ll be fine, and if we’re not, we won’t.”

Finally I did speak to one digital agency boss, who declined to be included in this piece, who was very negative of what digital agencies had achieved in general and felt that digital agencies had failed. I was surprised and disappointed to hear this, especially as it just enforced the negative bias digital agencies get from some of the press here in the UK.

Well I thought it would be interesting to see how digital agencies had fared against their more famous and established counterparts in the advertising industry by comparing like for like results after the first 10 years of trading for each agency. Alas I am still waiting for responses from CP+B, Mother and W&K but BBH did kindly get back to us (hats off guys).

Anyway after a decade, BBH (who last year came runner up to Mother as agency of the decade) had just one office in London and a total revenue of £13m. If you then compare this to Dare which had 3 offices and a revenue of £15.6m at its 10th birthday or Profero who have 8 offices globally and a team of 187 people after ten years, I would posit that it is nonsense to say that the digital agencies have failed.

Hopefully off this strong platform, these agencies will now be able to evolve and deliver the type of work that allows them to be considered great. I suppose that only time will tell.

A little more on the digital agencies that took part:

Positioning: We are a marketing agency. We create brands for this digital world we live in. We also tell people about the ideas that build those brands. We call that advertising.
Most famous for: Axe Feather, Lynx Blow, Waterslide, My Fry
Recent Project most proud of: Product Testing Institute

Glue Isobar
Positioning: glue Isobar is a modern creative agency with digital very much at its heart.
Most famous for: MINI “Ave a Word’, Pot Noodle “Hysterical Girlfriend” …
Recent project most proud of:

Lean Mean Fighting Machine

Positioning: A Digital advertising agency
Most famous for: EMIRATES Nonstop Fernando
Recent project most proud of:
www.flushtracker.com for Unilever

Positioning: A marketing agency for the digital age.
Most famous for: Dennis, MINI White Rabbit, MySkyStatus
Recent project most proud of: