As the Lines Blur, Digital Agencies Are Taking Lead

Today Agency-of-Record Status Can Go to Anyone; Just Ask Tribal or Tequila

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NEW YORK (AdAge.com) -- Digital agencies are not only being invited to pitch brands as agencies of record -- increasingly, they're winning.

Just last month, Tribal DDB was selected to lead global brand advertising for web security firm McAfee. Said the company's CMO, David Milam, at the time: "McAfee evaluated a number of agencies, and the team at Tribal DDB demonstrated strength in every aspect of their business. Not only did Tribal DDB have a number of great creative directions but, more importantly, they backed them up with strong strategic insights."
Liz Ross, president-Americas and global CMO, Tribal DDB Worldwide
Liz Ross, president-Americas and global CMO, Tribal DDB Worldwide

While most clients still seek best-in-class specialists for every discipline, more are showing interest in digital agencies to serve as the lead on integrated communications efforts, consultants said. The uptick is particularly visible among marketers in the retail sector and other product categories where there is opportunity for e-commerce.

What's more, clients are becoming less and less fixated on the type of agency handling their ad accounts and more on the individual brains behind the marketing campaigns.

On their own merits
Omnicom Group's Tequila, New York, this year was appointed the U.S. agency for VisitBritain, the national tourist office for England, Scotland and Wales; last spring IMC2 was tapped to handle all creative, media and strategy for Mars Direct, which makes personalized M&M's and Dove chocolates; and AKQA is getting ready to roll out TV and web campaigns for Flip, the sub-$100 digital video camera that has created amateur cinematographers out of the YouTube masses, as part of its agency-of-record duties.

Clients "don't care as much as we care about what kind of agency they are working with," said Liz Ross, president-Americas and global CMO, Tribal DDB Worldwide, which was invited to pitch Jose Cuervo tequila alongside traditional shops including Publicis Groupe's Bartle Bogle Hegarty and WPP Group's JWT. "They are looking for a marketing partner and group of people that understand their business and their brand. A lot of the old, bigger agencies are trapped in their old structures, so it's really about who has the best talent."

"We've been the lead agency on a lot of projects, from small start-ups to very, very large companies," said Rick Webb, partner-chief operating officer, Barbarian Group. "The trend is definitely going on."

Technology companies are another hot space for digital agencies to forge agency-of-record relationships, Mr. Webb said, citing his agency's AOR relationship with Adobe for its Photoshop Express product as an example. In addition to online duties, Barbarian Group also handles outdoor, guerrilla and word-of-mouth marketing efforts for the brand.

"Digital shops are also shining through in those pitches because they get their products and their business. A common brief is to drive traffic ... if they are talking to us or an AKQA vs. the Kaplan Thaler Group, [digital agencies] are going to have this natural advantage."

Shifting priorities
The choice to tap AKQA as agency of record last spring wasn't a knock on DDB, the agency it worked with to launch the brand in 2007, said Scott Kabat, director-marketing at Flip marketer Pure Digital. Instead it was a realization that the company's 2008 plans were going to be heavily focused on digital.

"We learned a lot through the process, and it made us really confident that AKQA, either in-house or working with partners, could deliver an integrated plan," he said. "We were impressed with their strategic insight and their ideas around a campaign platform." The agency's first work was both digital and promotional, tying the Flip Mino to the Vans Warped concert tour. Upcoming holiday work will be a "combination of online, events and some TV presence -- but different than traditional TV advertising," said Mr. Kabat.

Late last year, Forrester completed a study of several interactive agencies. The report's author, Brian Haven, argued that interactive shops are closer to the consumer, in a better place to mine the rich insights and data available via the web, and in the right place at the right time to capture consumer behavior changes. Because of those things, interactive shops are poised to be the "foundation for all marketing efforts within the next five to 10 years," he wrote. But, he added, agencies have not yet reached the level of leadership they need.

Another difficulty: sibling rivalry. It may be easier for shops such as independent IMC2 or AKQA (owned by General Atlantic) to take on AOR duties since they don't have holding-company politics to contend with.

And at least one top digital-agency executive said he thinks the movement toward digital-agency-as-full-agency-of-record has yet to take hold. "It's way too early to call it a trend," said Clark Kokich, CEO of Razorfish (formerly known as Avenue A/Razorfish). "But you are seeing certain select opportunities where it's becoming a real alternative for clients."

Laying groundwork
According to him, the move toward becoming a full agency of record is not an explicit strategy for the agency but an opportunity that can't be ignored. Razorfish does not have any full agency-of-record relationships but has poached a creative director and a planner from the likes of McCann Worldgroup and SS&K.

Ultimately, whether or not to assign an interactive shop full agency-of-record duties is highly dependent on the client and its goals. A big offline product that's focused on brand messaging? You'll want to have a traditional agency of record. But, Mr. Kokich said, if the brand's identity and proposition live in the digital space, if a product involves a complex sale where online research is a big component, or if it's a very youth-focused marketer going after a demographic that lives largely in the digital space, it's not out of line to consider a digital shop as agency of record.

"Ten years from now, all agencies will be digital agencies," Mr. Kokich said. "The question is just what process people take to get there. We're both starting from different places, but we'll end up in the same place."
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