Interactive Agency Execs Talk Shop at Ad:Tech

SAN FRANCISCO Interactive agencies are feeling the upswing that resulted in an estimated 40 percent year-over-year increase in Q1 Web ad spending, but they are still facing many of the same issues that they did during the downturn and some new ones, too.

Three i-shop executives discussed their attempts to convince clients to shift some traditional media dollars to the Web, the rise of the procurement officer and other industry trends at a session at Ad:Tech here yesterday.

“No one’s particularly good at telling clients how to optimize the budget,” said Mike Windsor, CEO of WPP Group’s OgilvyInteractive, adding that it is still “1971” in the ad world where mass media is king.

He said, however, that when agencies put interactive in the context of a client’s overall ad spend, it gets easier to convince them to move money to the medium. “This is peanuts,” Windsor said. “For the cost of one TV commercial, you can double your Internet budget.”

Sound research also goes a long way in educating clients about the Web’s value, said Darin Brown, evp at SBI.Razorfish. “It’s been 10 years of research, 10 years of proof,” he said.

Another challenge that remains is, “Who owns the budget?” said Mark Kingdon, CEO of Omnicom Group’s Organic. Is it the marketing, information technology or e-commerce department? “There are questions about who should own this channel and how it should be integrated with other marketing channels.”

The executives also acknowledged the procurement officer’s growing role in marketing decisions. “It’s a little like welcoming the devil into the room. They’re not emotional [and are] hard-core negotiators,” said Windsor. But, it’s all about how agencies play the game, he said. “It’s a negotiation strategy more than anything. They’re not just about reducing money. It’s about maximizing value. … It’s forced us to change the way we do business. More and more every assignment is a pitch. You have to learn to manage the business under new rules.”