The goal of the Digital Agency Report cards is to present a balanced picture of the field. We chose 10 agencies for report cards, based on their size and market presence. And, while some of the agencies differ in their focus, we aimed to include U.S.-based shops in the same competitive set.

The market for interactive services has changed greatly in the seven years since we began evaluating what were first called Web shops. They often were tasked with "matching luggage": building a microsite to complement a TV and print campaign. Today, the interactive specialists have branched out into new areas, including online media, analytics and, now, social media and emerging technologies like mobile.

The Numbers: In many cases, we are restating revenue (global where applicable) to reflect more accurate figures or to account for acquisitions. With the help of Adweek financial columnist Alan Gottesman, we evaluate this group primarily on revenue percentage gain (taking into account the size of the shop) and less so on revenue-to-staff ratio. This year's average revenue growth average wasm  about 23 percent. (Last year's average was 25 percent).

Creative: We evaluate the agencies on creativity, originality and strategy, not just a cool Flash animation. While we pay attention to user experience and design, we give extra points for powerful marketing ideas. Pretty Web sites are no longer enough.

Emerging Media: This category added last year includes technologies like mobile and new venues like social networks. In particular, we wanted to see agencies that are evolving in their ways to reach consumers, rather than only relying on the tried-and-true of Web sites and banners.

Management: We rate how well executives run their agencies, whether it's by poaching high-profile executives and accounts, starting new practice areas or expanding into new geographies. The grade's base level is the shop's financial performance.

The final grade: We use a numeric formula to average the other four marks.

AGENCY.COM: D

AKQA: A-

AVENUE A/RAZORFISH: B

DIGITAS: C+

ICROSSING: C

MRM WORLDWIDE: C

OGILVY INTERACTIVE: B

ORGANIC: B

R/GA: B

TRIBAL: B+

AGENCY.COM

Numbers F
Revenue down 8% to $70 million. Won: LG Electronics, OfficeMax, Sallie Mae. Lost E-Trade. Won through-the-line creative for $100 million LG Electronics account.

Creative C
Agency.com's ambition to create ideas born in digital and distributed through various media platforms has yet to show up in the work, which mostly translates existing offline concepts to online. For Snickers, microsite and banners (online versions of TV spots from concept created by Cultura) add interactive fun to fictional Sonny and Cher-type couple. Banners communicate eBay Motors is the way to find nearby cars on interactive map. (Packing site functionality within display units, an often-overlooked conduit to consumers, is a speciality.) Jameson whiskey rich-media units pack interactive experience within banner featuring interactive bottle.

Emerging Media D
Like many interactive shops, Agency.com remains rooted in online fundamentals: site design and banner creation. It has shown an ability to make display units portable, e.g., the eBay units. Work for British Airways showed how technology and media can work hand in hand as BA "Exceed expectations" placements were run on stories of companies performing better than anticipated. But agency has yet to make a mark in new areas of community and social interaction.

Management D
Agency.com brought back founder Chan Suh as CEO in May, following disastrous yearlong tenure by David Eastman. Suh spent good part of year stabilizing agency and bringing in senior-level management that share his vision of moving out of low-end Web production work and into idea-driven campaigns. New hires included ex-OgilvyOne exec Ricardo Zane to lead New York office and former Eleven CEO Jordan Warren to lead San Francisco. Kathleen Flynn took over Chicago office after Dave Johnson left. Agency.com shut down Dallas location in November to concentrate on other offices. Suh also stopped agency's drive to expand overseas.

Comments
Agency.com has gone through difficult stretch over past two years marked by management and client turmoil, and its own identity crisis. Its roots are as an IT integrator, yet it shed its technology heritage over the years. Suh believes future lies in being about "digitally inspired idea," yet there's not much creative work to back this up yet. If goal is not achieved, it's believed Omnicom may consider combining Agency.com with another digital shop.

Final Grade: D

AKQA

Numbers B+
Revenue up 40% to $99 million on restated financial information. Won: Benjamin Moore, Kraft, Method, Motorola, Nike Global Football, Unilever. No losses. Tied for highest percentage revenue gain of any agency, but off second-smallest base.

Creative A
Cream of the crop when it comes to digital creative. The rich, immersive "Believe" site for Xbox game Halo 3 and animated wonderland "Happiness Factory" for Coke are cutting-edge site creative. Showed its ad agency DNA in 2007 with work that blurred the line between digital and non-digital. Launched an immersive alternate-reality game, Iris, perfectly targeted to Halo's devoted following. Tapped everything from fake ads in Best Buy circulars and Craigslist postings to 1-800 numbers and ringtones to rope users into sussing out clues. Nike Supersonic combined digital and experiential with a race that melded music and social networking.

Emerging Media B
An adept adopter of new forms of digital media, shop launched Smirnoff.mobi, an on-the-go cocktails and nightlife guide, showing how a brand can provide utility in mobile, rather than simply re-create a Web site. A program smartly targeted the Visa Signature card's affluent audience with wine-pairing advice and menu descriptions from chefs. Reached into social networks with a successful Facebook campaign for Target, the "Dorm Survival Guide," which struck the tricky balance between selling to teens and providing them ways to connect and share.

Management A-
CEO Tom Bedecarre and chairman Ajaz Ahmed faced a crossroads in 2007. Rather than sell to a holding company, they opted in February for a $250 million deal with private equity firm General Atlantic. Opened offices in Amsterdam and in Shanghai, where it will generate Olympics-related work for McDonald's and Coke. Took steps to transform the agency into a full-fledged digital marketing services company with acquisition of SearchRev, a search-management tool. Built out its media practice, which ended the year with 100 people.

Comments
Now with a solid financial backer, AKQA needs to prove it can develop into a digital marketing services company with hard-core metrics add-ed to its creative roots. The top ranks thinned in January when Andrew O'Dell, president of interactive, and P.J. Pereira, San Francisco ecd, left to start their own shop. Rival R/GA's expansion into San Francisco and London created more competition for talent.

Final Grade: A-

AVENUE A/RAZORFISH

Numbers A
Revenue up 30% to $369 million. Won: Choice Hotels, DirecTV, about 60 project assignments. Lost: Apple, Chase, Harrah's, Verizon.

Creative C+
Avenue A/Razorfish is unlikely to contend for many Cannes Lions. Its creative tends to be user-focused design work, rather than breakthrough ideas. Nike All-Conditions Gear site has a slick user interface combining an interactive globe with video clips of Nike-sponsored skiers and snowboarders. Banners with geotargeted mapping showing places to get Coors work well, as does creative media placement tied to the time. But video executions are ho-hum. "The Harry Situation," a Garnier Fructis campaign that parodies '70s sitcom Three's Company and overt product placement, suffers from clumsy storytelling.

Emerging Media B-
Avenue A/Razorfish showed improvement in emerging platforms and social media. Idea Lab incubated bar-code technology that Red Bull piloted. For Best Buy, it ran a run-of-the-mill YouTube contest offering a tricked-out dorm room for student with best reason why he or she should win. Facebook campaign for Victoria's Secret was slightly more interesting, letting young women post photos of themselves in Pink-branded clothing as part of the brand's attempt to tone down it sexy image. The popular group attracted over 350,000 members, far more than most brand groups on Facebook.

Management B
Avenue A/Razorfish had a strong year. Clark Kokich was elevated from president to CEO in July, after Microsoft struck a $6 billion deal to buy parent company aQuantive in May. The once-unthinkable prospect of a technology company and media seller owning an agency has mostly worked out, with the shop continuing to operate independently. Apple fired Avenue A/Razorfish "as soon as they could find the number," Kokich said, but there hasn't been any other major client fallout due to acquisition. Kokich also continued international expansion, buying Duke Digital Marketing in France in March.

Comments
The question remains whether Microsoft will sell the shop. AQuantive's ad serving and network arms were the attraction, so a sale wouldn't be surprising. Barring that, the agency must retain its autonomy or risk losing clients wary of conflicts and talent unwilling to work for the software giant. Its site design, strategy and online media remain top notch, but it will need to continue expanding outside its traditional comfort zone.

Final Grade: B

DIGITAS

Numbers C
Revenue up 20% to $312 million. Won: Samsung, Miller, Sara Lee, Saturn. Lost AT&T Wireless (digital media).

Creative B-
Creativity and Digitas were never interchangeable, yet agency has quietly improved creative chops. It worked with AOL and HBO to create "The Smart Show," an entertaining Web series for Holiday Inn Express that follows a man and woman on the lookout for interesting people, places and things while on a cross-country road trip. Webisodes won't win an Oscar but are solid branded content. A refresh of GM.com made corporate site more approachable via use of inspirational photography and clean interface with links to GM nameplates.

Emerging Media C+
Digitas took American Express into new territory with "The Members Project," an ambitious program launched in May to tap into crowdsourcing. Digitas created twist on consumer-generated content, asking for submissions for projects to improve our quality of life. Site attracted over 7,000 ideas, and American Express cardholders voted a safe-drinking-water project as winner. Digitas also led Astra-Zeneca into its first social marketing by building community site for breast-cancer survivors.

Management B-
Digitas turned in solid financial performance in 2007, making Publicis CEO Maurice Levy's $1.3 billion bet that the agency will be digital engine of the holding company look feasible. First year under Publicis brought several changes. Digitas CEO David Kenny took lead role in shaping digital strategy of Publicis. He elevated Laura Lang to CEO of Digitas USA, with Alan Rutherford recruited from Unilever to lead Digitas Global. Acquired French digital firm Business Interactif (June) and CCG in China (July). Through a restructuring, Digitas gained Modem Media's office in London. It also combined its healthcare accounts with Medical Broadcasting Corp., the interactive healthcare shop bought in April. Kenny launched Prodigious Worldwide, an outsourced digital-production arm for Publicis agencies.

Comments
After a year of getting its structure in place, Digitas is ready to prove whether it can serve as fulcrum of Publicis' digital strategy. Lang is homing in on Digitas moving beyond its direct-response roots to create agency that can lead with ideas for building brands. But it still must prove it can hatch the big idea that can be executed in several channels.

Final Grade: C+

ICROSSING

Numbers B-
Revenue up 24% to $110 million. Won: Epson, Travelocity, Bebe, Esprit. Losses: General Motors (consolidated local search marketing with GM Planworks), Cracker Barrel, Today's Pool & Patio.

Creative D
ICrossing is a search shop that prizes data, even in creative. Its work for Lincoln Educational Services shows its bare-bones approach to design: iCrossing stays away from Flash that can obscure sites from search engines. Instead, focus is placed on building a single site-entry point and morphing it based on what led a visitor there. For instance, a user clicking on a Lincoln link after searching for "culinary careers" sees something different than one looking into cosmetology. It's not the stuff of Cannes, but it's a creative use of insights gleaned from data. Other work is similarly no frills. A Mazda car configurator doesn't draw oohs and aahs, but it is a streamlined tool for getting users to a test drive.

Emerging Media B-
ICrossing has steadily built its social media capabilities. For Palm, it moved customer service onto blogs and message boards and monitored social sites for mentions of the Palm Treo, then reached out to solve customer problems for Palm. For Mazda USA, it built a mobile site that determines the type of phone being used and changes design accordingly.

Management C-
CEO Jeff Herzog and president Don Scales continued to follow their build-out blueprint by adding complementary services. Of the trio of acquisitions, 100-person Proxicom in July looms the largest, promising to marry iCrossing's search expertise with site development. The company also added capabilities in measurement with Sharpe Analytics in March and internationally with Spannerworks in February. It closed a $62 million round of financing to fuel the expansion. Perhaps as important, Scales has moved quickly to integrate the new companies, adopting Proxicom's vertical market delivery model over geographies.

Comments
Shop remains a work in progress. Long dismissed as "just a search shop," it has proven its ability to grow into new, underserved areas such as mobile and social media. (Still, search accounted for 80% of the shop's revenue in 2007.) Herzog and Scales are betting their brand of measurable, results-oriented marketing will win it larger client budgets. The question remains whether the shop can truly operate as an integrated company (and cross-sell its services) following six acquisitions in just over two years.

Final Grade: C

MRM WORLDWIDE

Numbers D+
Revenue up 12% to $230 million. Won: Lunesta, National City Bank, Nestle, Weight Watchers, BSkyB, Ameriprise, 21st Century Insurance and 3M. Lost: Wendy's, Empire Blue Cross, Reebok.

Creative C+
MRM focuses on metrics-driven creative. Work can reflect a canny sensibility or be as droll as a direct-mail piece. On plus side: MRM worked with McCann on PicturetownUSA for Nikon, which gave D40 cameras to residents of a small town. Photos were uploaded to a Web site where visitors could experience town life and see what the D40 can do. Other efforts developed jointly with McCann Erickson fall flat. Microsite for McCann HP campaign "Society for parental mind control" is Flash venue favoring graphics over usability or originality.
 
Emerging Media C-
Agency's forays into social media are not memorable. Highlight: A MasterCard promotion with Peyton Manning, following on McCann Erickson TV spots, lets users customize their own Manning pep talk to send to friends, adding crucial element of customization. Lowlight: Nature Valley site, WheresYours.com, turned into garden-variety social net for sharing photos, videos and info about healthy lifestyles. Like many brand communities, it was mostly a ghost town.

Management C+
CEO Reuben Hendell rightly concentrated on solidifying relationships with big-spending clients Intel and Microsoft in 2007. The global reach of MRM and its focus on analytics sets it apart, yet shop's direct heritage seems to hold it back from pushing creative frontiers and innovating in new digital channels. Lost digital vets Anders Ekman, director of new business, and Paran Johar, managing director of MRM Los Angeles.

Comments
In many ways, MRM is in an enviable position, as Intel and Microsoft are making digital an integral part of their marketing spending. (Intel already spends 20% of its marketing online; it wants to make that 40% this year.) MRM needs to build its cred as a leading digital shop and already has embarked on an ambitious effort for Intel that implements "always-on" social marketing (Intel engineers communicate directly with IT pros). But as long as Microsoft owns Avenue A/Razorfish, MRM will need to fret that client will move work in that direction. Recruiting topflight digital talent and establishing rep difficult as long as shop is viewed as solely the interactive and direct arm of McCann.
 
Final Grade: C

OGILVY INTERACTIVE

Numbers B+
Revenue up 23% to $425 million. Won: Adidas (Asia), Dove (global digital AOR), Kraft's Oscar Mayer, Select Comfort. No losses.

Creative B
As stand-alone pieces, OgilvyInteractive's creative work is rarely "wow," but does get job done, typically as part of an integrated campaign. It can also surprise. A Six Flags site is standard, but Ogilvy does deft job of moving experience beyond site to incorporate Google widgets and MySpace. A similar penchant to fish where fish are makes hit out of Hellmann's "In Search of Real Food" Webisodes on Yahoo. Stranded on a microsite without the portal's audience and social tools, videos would not be as successful. "The Rook" microsite for Adidas in Asia takes interesting stab at episodic gaming.

Emerging Media B+
Thanks to forming digital innovations group in 2005, OgilvyInteractive has early bead on new channels. In Singapore, it created a smart utility for Johnnie Walker that used the cell phone to provide branded service rather than marketing message. The Digital Personal Assistant has event and taxi listings that mesh well with spirit's responsible-drinking message. A DHL game takes casual-gaming trend mobile by using out-of-home ads to promote download of DHL-skinned Tetris game. But not all approaches are hits. A Select Comfort Web 2.0 site that aggregates sleep-related content from across Internet has clever execution, but social site about sleeping seems like unintended satire.

Management B
Ogilvy North America co-CEOs Carla Hendra and Bill Gray brought in Jean-Philippe Maheu as chief digital officer in April to helm OgilvyInteractive. Jan Leth moved from co-CCO to role of vice chairman, global digital creative. Key hires included Dave Bolten, director of technology, poached from R/GA, and Adam Lau, ecd in New York, recruited from AKQA. Maheu has kept OgilvyInteractive a formidable presence among large interactive agencies.

Comments
Although OgilvyInteractive remains competitive digital marketing organization, status as separate entity is murky as Ogilvy spreads digital throughout agency. Maheu's challenge is for OgilvyInteractive to remain a competitive digital specialist while integrating seamlessly within Ogilvy.

Final Grade:B

ORGANIC

Numbers A-
Revenue up 40% to $115 million. Won: Estee Lauder, Equinox, Martha Stewart Living Omnimedia, Sony PlayStation. Lost: Sprint.

Creative B
Organic's calling card is an "empathy" approach that creates experiences based on customer needs. It can be used for something as dry as making mortgage information less scary to first-time home buyers. For instance, Bank of America's site for its No-Fee Mortgage Plus service successfully uses different video snippets based on the savvy of the potential borrower. But Sprint's "Music Sherpa" microsite, which introduces characters Ian and The DJ in attempt to identify Sprint with online music, is typical of many uninteresting brand destinations. On plus side, "Way beyond the trail" campaign for Jeep Patriot finds ways to marry interactivity and video storytelling to reach outdoorsy young men with a choose-your-own-adventure video approach.

Emerging Media B
Organic has carved out niche as an early adopter of social media that creates brand communities with authentic voices. It identified an opportunity with Jeep drivers on the brand's community Web site by pulling in Jeep activity from Flickr, Facebook, YouTube and other sites rather than having owners upload photos. Smart approach recognized the diffuse nature of the social Web. What's more, the shop's Emerging Platforms Group, set up in 2006, developed projects that might be spun off into stand-alone properties.

Management B
Omnicom's Organic had a second consecutive year of breakneck growth, following meager years after dot-com meltdown. Suffered loss of Sprint, however (which will hurt agency in 2008). Organic was the beneficiary of top clients Chrysler and Bank of America shifting marketing spend online. CEO Mark Kingdon started a strategy practice in September to attract consulting projects. Organic also added a Chicago office, its sixth location. Lost strategy lead James Kim and San Francisco ecd Mauro Alencar.

Comments
Kingdon's decision to leave Organic for Second Life creator Linden Lab is turning point for 14-year-old Organic. Without a strong technology offering or international reach of competitors, shop risks getting caught in between being a tech agency and a creative shop. Layoffs earlier this year at its Detroit office also point to precariousness of its largest client, Chrysler. Mitsubishi relationship winding down.

Final Grade: B

R/GA

Numbers C
Revenue up 21% to $110 million. Won Sunglass Hut, Barnes & Noble and Discover. Lost: Purina.

Creative A-
R/GA again produced high-quality work for client Nike. It showed flexibility in moving from traditional strengths in Flash microsite experiences to embracing downloadable content with work for Nike Air Force 25. The centerpiece of campaign was video-heavy, artful Web site with Nike athletes honoring classic players. Content was on Web, cell phones and Madison Square Garden's replay screen. Work for Nokia N95 site ably translated Lowe TV campaign to the Web, adding a consumer-generated element by inviting users to submit videos, shot through their N95s, of them taking things out of their pockets. R/GA also added slick mash-up tool. Verizon Action Hero was ambitious attempt to use sophisticated computer-generated graphics that upload a person's image onto a character, but technology overwhelmed idea.

Emerging Media B+
R/GA is impressive in emerging media areas like mobile, yet less so when it comes to social media. While a Nike Zoom effort seamlessly translated a training site into an on-location training tool by adding mobile capabilities, shop can falter when a more human touch is needed. Nike+ companion blogging site, Nike Insider, is clunky and comes across as marketing.

Management B+
R/GA has shown impressive growth year in, year out, though revenue increase tempered by last year's 33% jump. R/GA CEO Bob Greenberg has assembled a seasoned management team that hasn't suffered the kind of high-level poaching and defection of some rivals. He added depth by bringing in key creatives, including Berlin Cameron United copywriter Taras Wayner and Robert Rasmussen from JWT. He solidified shop's move outside of New York by adding more people to its London office, and S.C. Johnson and John Lewis to anchor client Nokia. R/GA also built out its data and planning services.

Comments
R/GA continues to be best in class at creating engaging, often remarkable digital experiences. With its new office in San Francisco and an employee base topping 600, IPG agency will need to prove that its deep management bench can assure consistent quality. It also needs to prove itself in the social Web, where a more bare bones, authentic approach rules.

Final Grade: B

TRIBAL

Numbers B+
Numbers: Revenue up 25% to $200 million. Won: Kraft, Lowe's, Nokia and Wrigley's in the U.S. No losses.

Creative B+
Shop's creative has evolved from flashy microsites to smart marketing based on brands creating media and utilities of their own. Tribal was on its game with its campaign for Philips' Ambilight TV, working with Microsoft to create an Ambilight player that mimics the crisp picture of the flat-screen TV. Shop also spearheaded a Pepsi effort that moved beyond vacuous consumer-generated ad efforts to let the public design a Pepsi can. The end result: 90,000 submissions and user-created designs on 500 million cans. Not all of Tribal's stabs at ads as utility work equally. Another collaboration with Microsoft, for Johnson & Johnson's Clean & Clear, is a typical IM theme-pack promotion, giving girls the option of customizing "winks" on MSN Messenger.

Emerging Media B-
Tribal is not a big believer in basing campaigns within social networks -- or "playing with shiny new objects" in CEO Matt Freeman's words -- choosing instead to use them as extensions of existing brand sites. The microsite ASimpleSwitch.com, backing Philips' Live Earth promotion to get people to switch to energy-efficient lightbulbs, includes some social networking tools, but remains mostly a brand site. For Volkwagen, it set up a popular fake blog for Horst Schlammer, a hapless driver on a quest for his driver's license.

Management A-
Freeman continued to expand agency's footprint, opening nine new offices. His management team remained intact, with key lieutenants Liz Ross running Tribal West, Paul Gunning managing East and Stephan Beringer handling Europe. As some interactive agencies remain stuck on sites and banner ads, Tribal has moved into general agency work, winning a through-the-line pitch for Deutsche Telekom in Germany. Solidified Asia leadership by bringing in Amanda King from DDB as president of Asia, and luring top creative Dirk Eschenbacher from OgilvyOne.

Comments
Freeman has come a long way. He's gone from the "Web guy" on the sidelines to a rising star at Omnicom. The question is what role Tribal, traditionally the rebellious little brother, plays within DDB. While DDB is looking to add its own digital capabilities, Tribal is pitching through-the-line accounts. Both view each other warily. At some point, DDB will need to decide whether to further integrate Tribal.

Final Grade: B+