How Digital Shops Are Gaining Turf

NEW YORK The deciding factor in the recent, much-coveted Nokia global strategy/creative review turned on a detail that may prove prescient in the outcome of future agency searches. "While digital was not what we were looking for, we asked what the role of digital would be from each of the agencies," says Jo Harlow, svp, marketing, Nokia Mobile, who is based in London. "That's what set Wieden + Kennedy [London] apart. They used digital as a starting point, not an afterthought. They gave us a very digitally led idea. They came up with a complete dialogue with the consumer."Conversely, Agency.com has had success moving from digital to traditional with clients like Ikea. In February, Ikea expanded Agency.com's assignment from the Web to so-called above-the-line work, catapulting the shop into the lead agency position. The idea is for Agency.com to come up with big marketing ideas, from a digital perspective, that can live in many forms of media, digital and analog. "We think we're in a good position to bring digital ideas to clients," says Chan Suh, Agency.com CEO, "but we don't want to be so narrowminded that we only talk of Web sites and banners and buttons."There may be no better display of the shifting fates of industry players than with those two agency wins. While the dimensions of this new agency landscape are still being defined, one thing is clear: London multinationals like JWT, Publicis, Grey, Saatchi & Saatchi and McCann Erickson are struggling to reinvent themselves beyond dots on the corporate map. While they overwhelmingly work for global clients in the U.K., many of the country's national brands are choosing the likes of alternative, smaller shops such as CHI, DLKW and Beattie McGuinness Bungay and, in Nokia's case, Wieden + Kennedy. There is no shortage of such choices in a market buoyed by start-ups and single-office "hot shops." Within the last month alone, top execs at two network offices announced their exits and intent to create a nontraditional start-up: In late June, the well-regarded top team at Rainey Kelly Campbell Roalfe/Y&R—CEO James Murphy, creative director Ben Priest and planning director David Golding, who are close to flagship clients Marks & Spencer and Virgin—left the agency; and less than two weeks ago, Leo Burnett ecd Jim Thorton, who joined Burnett from Mother in 2003, announced his departure. These moves underscore the talent exodus from the more traditional agencies in London. 'Dare Digital Ltd., which is being acquired by Canada's Cossette Communication Group, was founded by former agency execs who wanted to leverage the positives of that experience and leave behind the negatives. Dare managing partner Mark Collier is the former joint managing director at BBH London; John Bartle, a retired founder of BBH, is non-executive chairman."We wanted to bring a grown-up perspective and strategic thinking of above-the-line communications to the digital world," says Dare planning partner John Owen, who was formerly director, Starcom IP. "The digital age is about the democracy of a good idea which can come from anywhere, including the consumer. So it's about being more open and more collaborative, and having respect for the consumer's contribution. Traditional agencies are used to control rather than collaboration and that's where they are coming unstuck because they are finding it difficult to adapt to the new ways of working," said Ajaz Ahmed, chairman, AKQA, a company that itself has roots as agency Citron Haligman Bedecarré. Ahmed offers a point of view echoed by many of his U.K. digital peers: "In many ways, the worlds of Madison Avenue and Silicon Valley are thousands of miles apart. In general, the advertising industry tends to be very conservative. The traditional advertising industry is very reluctant to change while the technology industry is about relentless innovation. Many traditional agencies think of 'digital marketing' as taking an advert and sticking it up on YouTube. We are not really trying to compete in the advertising space. The world has moved on and we don't aspire to become like the traditional advertising agencies; we are trying to create something new and take a different path. "The profound rise of social networks shows that consumers are much more interested in themselves than advertising," he continues. "The shouting, jingle-chanting and brand name blasting needed to imprint information on the brain of a couch potato, wondering where his next snack will come from, just sounds ridiculous when presented to a mobile, mouse-clicking, multi-tasking, technology-literate totally in-control consumer."While that may be an exaggeration or a throwback to a different time, London digital agencies clearly want the upper hand in connecting with that in-control consumer.Last year, Ahmed said, AKQA won global Coke, Smirnoff, Johnnie Walker and McDonald's accounts pitching against traditional agencies. In March, Eurostar digital shop Glue did not prevail in the railway's general agency review—where it was up against Beattie McGuinness Bungay and Fallon, which won the business—but was given additional offline assignments. In June, Albion, which works for eBay's Skype Internet phone service, landed the online auctioneer's (U.K. business), beating more traditional agencies, including Mother. But agencies like BBH, which has bolstered its digital capabilities by hiring 80 new people over the past 18 months, aren't willing to cede that turf so readily. Last December, BBH went up against three London interactive shops to win a digital assignment for Lynx, the Unilever deodorant brand for which it works offline. To be sure, a siloed business is blurring: While digital agencies are being pitted against traditional shops in mainstream reviews, agencies are going up against digital specialists to win digital assignments. "It would be an exaggeration to call it a turf war, but there is a tension as to who owns and leads the [client] relationship," says Ben Fennell, managing director, BBH London.But it was the Eurostar review, announced last November, that got London ad circles talking. In November, the cross-channel service is moving from Waterloo station to St. Pancras and launching its 186 mph High Speed 1 service. Eighty-seven agencies applied for the plum, high-profile piece of business, which had been handled by TBWA.Greg Nugent, Eurostar head of marketing, still can't understand the fuss made over Glue's emergence as a review contender."I'm surprised I keep getting asked why I included Glue," he noted. "People said we were quite brave to do so—that's quite a back-dated version of the way the industry works. It never entered my head not to include Glue. You bring in as many good people as you can, wherever you find them. Five years from now, we will have forgotten what it was like to do business any other way." Mark Cridge, managing director at Glue, which also made it into the finals for 3 Mobile earlier this year, says: "Eurostar was a watershed because we came very close to getting the business. It's an expensive new business strategy. But even [though we didn't get] the business, we can now get the ear of marketing directors, which is critical. For a digital agency you have to pitch the whole account to do that. We wouldn't have this strategic role without pitching the whole account."Along those same lines, BBH's Fennell says, "The Lynx win was a very big moment for us. It was our first purely digital pitch and the first time against digital agencies. We built a different agency team with digital planners and creatives alongside [BBH cd] Rosie Arnold." Digital's growing influence in marketers' overall communications strategy may lead to a kind of rebundling of media, at least as far as planning is concerned."We found it harder and harder to develop fantastic breakthrough ideas without having channel skills in-house," Fennell says. "You need to come up with a big creative idea alongside a big engagement idea."Shortly after Nokia made public its selection of Wieden, one of the review's other finalists, JWT, London, said it was merging with a WPP sibling across town, Digit, as a way to bolster its digital offering. Digit's managing director and other executives are moving from the shop's offices in the edgy Spitalfields neighborhood in East London into JWT's quarters in posh Knightsbridge. But digital competitors argue that "old-school" agencies, particularly those associated with big global networks, are tarred with media legacy issues."Traditional network agencies just see digital through a broadcast lens. Digital is seen just as more screens, more ways of delivering the same content," says Glue's Cridge. "We create time, we don't buy time. Digital companies understand how to get people to spend time with brands rather than brand broadcast to them."And because digital agencies are not bound to a "legacy" mentality, they are adapting more readily. "When we designed our agency in 1995, it was always our intention to get the foundation of interactive right with the idea we'd go the other way," says R/GA's Bob Greenberg. "We consider it just adding capabilities."And that may just be the difference between traditional and digital agencies.

Brand Marketing

How Digital Shops Are Gaining Turf

Noreen O'Leary

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