Interactive ad agencies no longer one size

August 2, 1999

BY MICHAEL KRAUSS

"We're the brand architects; you're the general contractors," was the way a senior advertising agency executive once described the difference between ad agency account people and brand managers. He was trying to convince me to join an agency and give up life as a brand manager.

In this fellow's mind, ad-agency types ruled the strategic and creative roosts while brand managers labored away with menial tasks like coordinating trade deals in Poughkeepsie.

For our part, after hours and over beers, the brand managers would mutter that all the advertising agency was good for was, "copy and media," creative development and media insertions. If a task required any real mental muscle, we'd do it ourselves.

Over time, a symbiotic détènte, a constructive equilibrium emerged in our group. We came to respect the agency, and they came to respect us. It took a lot of conversations, but it became a partnership.

Today, if you are a large global company, you probably need a large global communications agency. If you are IBM, you have Ogilvy & Mather. Colgate has Young & Rubicam. On the other hand, there are the creative advertising boutiques, and if you are Nike, you have Wieden & Kennedy. If you are Apple, you have Chiat/Day.

Big global-communications powerhouses and spirited creative boutiques-that seemed to be the way the agency business was segmenting...until the Internet came along.

Suddenly, with the arrival of firms such as Modem Media and the promotion of Coors' Zima.com site, we realized in 1993 that the Internet could be a branding vehicle. Faster than you can say "Click through," a host of new interactive agencies appeared on the scene, and what was once a staid and stable marketplace for agency services became a free-for-all.

Amidst all this explosive change, guidelines have not been written for marketers. As a marketer, what should you expect from your interactive agency? Online "copy and media," or "full service" - everything you need to build your interactive business?

"That's a huge question that a lot of clients are asking," says Michael Denuncio, CEO of Four Points Digital, a Chicago-based interactive shop. "In fact, we're starting to see a segmentation in the interactive agency marketplace. Interactive agency brands are being developed, and interactive agencies are specializing."

"At Four-Points Digital, we stand for online marketing. We're focused on branding issues. We do a lot of site development from a marketing perspective, (where) other agencies might do site development from a technology perspective. They might do a lot of database building, applications development and software development.

"Neither model is right or wrong," he adds. "Two years ago you'd say an interactive agency is an interactive agency. Now, you start to look at an interactive agency for being good at certain things.

"Today, every client is expecting us to help steward their thinking, be partners with them and think intelligently about their marketing issues from an interactive perspective."

Denuncio's firm does a lot of site development, online advertising and e-mail campaigns. They've gone so far as to break up their creative group into different teams.

"We don't feel that the same people who develop your advertising should be developing your Web site; the issues of copy and look and feel and getting into a consumer's mind are different from information architecture, design and content strategy. We also don't believe that those people are the best people to do your e-mail and relationship marketing."

Unlike some agencies, Denuncio stops at the systems integration phase, adding, "We will never say to a client (that) we will build your back-end systems."

While there's still a lot of flux and change in the interactive agency space, the following three basic segments appear to be forming:

• Strategy: Some agencies offer to help you define the strategy for your e-business.
  
• Integration: To operate effectively, your e-business needs customized databases and software applications, and often these need to be connected to your existing business and to your new e-business partners. Some agencies provide the technology or back-end integration.
  
• Creative: The design, look and feel of your site is the centerpiece service offered by many interactive agencies.

So far, no one agency or provider does it all. Instead, most of today's marketers are borrowing a page from Denuncio. They'll shop for the best-of-breed provider in strategy, integration and creative and build partnerships of firms to deliver the best total e-business solution.

Like most things associated with the Web, stay tuned. This may change soon, too.

Michael Krauss is a partner with Diamond Technology Partners in Chicago.
He can be reached at news@ama.org.