Two apparently contradictory stories from the UK marketing press caught my eye recently, each from an impeccable source. One set of figures came from the Institute of Practitioners in Advertising (IPA) and the other from the Advertising Agency Register (AAR).
Firstly, UK Digital ad spend is still increasing and senior marketers expect this to continue. Indeed according to the respected IPA Bellwether report, online display spend forecasts were revised up 13.4% and Paid Search budgets revised up 14.9% during the last quarter of 2011; this despite the fact that marketing chiefs are, overall, more pessimistic about the year ahead than they have been in nearly three years.
The second piece of news appears to tell a different story: according to the latest research from the AAR, the number of UK agency new-business pitches in 2011 declined by 13 per cent on the 2010 figures. Specifically, there were 44 per cent fewer Digital pitches.
On the face of it, this is surprising. Given that all elements of Digital Marketing are growing: wouldn’t this suggest that more new projects are being signed off, from which it would follow that Marketing Directors/ CMOs would be looking around for new expert Digital agencies to whom to entrust these important new pieces of business? Good news for the Digital creative and media agencies, one would imagine.
But the more I thought about this apparent contradiction, the more clearly the truth dawned on me.
What I believe is happening is that more and more ‘Big Brand’ digital assignments (which, of course, have the biggest budgets) are being awarded without a pitch, often to the creative ‘ad’ agency (e.g. AMV BBDO, Ogilvy, M&C Saatchi, RKCR/Y&R et al) or the media agency (ZenithOptimedia, Starcom MediaVest, Carat, OMD et al) who are increasingly capable of delivering this work (and, naturally, integrating with offline), even in cases where Digital work is briefed as a ‘stand-alone’ piece of online activity.
Wow: many of us had been predicting this, but I, for one hadn’t expected it to happen quite so quickly. So digital marketing continues to grow but not, apparently, to the benefit of Digital agencies…
Interesting times. This phenomenon may be of interest, if not concern, to the likes of AKQA, SapientNitro, LBi etc. Indeed, is there a future for the specialist Digital agency or should they now either expand into offline or sell out to an ad or media agency?
As they say, timing is everything in these matters (just ask Mark Zuckerberg of Facebook). I would be prepared to bet some of the specialist Digital shops are even now meeting discreetly with the M&A consultants for a little chat about their options which, for the most capable and successful, could look very attractive indeed.
“So what does all this mean for smaller brands and SMEs without Megabucks to spend? And what about B2B?”… I hear many of you readers asking.
Well you guys are ahead of the trend here; integration and media neutrality has been a given for smaller agencies and clients with smaller budgets for some time now. When it works well, media-neutral planning leads to cross-platform creative ideas managed by integrated project managers. Voila: joined-up marketing!
Regardless of the number of zeros on the budget figure, Digital has grown up and is increasingly being absorbed into the communications mix; this is evident both in marketing departments and agency-side. However there are still significant gaps; ad agencies are regularly asking Digital agencies ‘to build something for one of our clients’ and all the Digital Marketing trainers and consultants I know are very busy right now!
Great Post – Thanks for the good read.
I think Integration in agencies is – to say the least – patchy. No names, but the worse scenario seems to be when conventional agencies have bought a digital agency and then tried to ignore them. There are some really bad functional and culture fits out there.
I am waitng to see the big name London creative agencies feature highly in things like the D&AD awards and I don’t think that will happen until really good, charismatic agency leaders are prepared to go in and break down some of those silos within the agency. Which will ruffle some very (self?) important feathers.