Landing on your feet when your i-agency stumbles

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Charlie Cousins could feel it slipping away. In late 1999, Cousins, the manager of marketing services with Arvida Co. L.P., the residential real estate division of St. Joe Co., Jacksonville, Fla., assigned his Web site development and online marketing to Third Street Interactive.

But by mid-2000, Cousins sensed his account was getting less attention from the Stamford, Conn.-based interactive design and marketing firm.

Third Street missed launch deadlines several times, delaying the introduction of Arvida’s online presence from June to November. Then, this year, management of the Arvida account shifted to OnlineFocus Inc., Cupertino, Calif., a sister shop of Third Street. Both agencies are units of Boca Raton, Fla.-based UCI Web Inc.

Arvida’s goal hadn’t changed: Design a site targeting both the residential real estate broker and agent market and the home buyer with a "fresh approach" to real estate marketing.

But with the change of agencies, a new account team was in place, populated with young executives lacking the experience of the older executives who had formerly worked on the account, Cousins said. Time-zone differences created additional problems. OnlineFocus’ reliance on e-mail over phone calls only exacerbated the communications problems and made interaction less personal, Cousins said.

UCI Web Chairman-CEO Joe Schmoke admits that at one point, the agency was "gulping down everything we could because we didn’t want to turn business away."

Only recently did Cousins learn that UCI Web had gone from a peak of 140 employees in June 2000 to around 80 today.

Earlier this month, Cousins pulled his account. He would not disclose the amount that Arvida had been spending with either of UCI’s agencies.

Flailing interactive agencies

This biography of a floundering relationship between an online marketing agency and its client is not unique. In the past several months, high-profile roll-ups such as MarchFirst Inc., Organic Inc. and Ltd. have fallen on hard times, often leaving clients to find their own way.

The closure or reorganization of interactive ad shops can leave clients in a difficult position, said Rudy Grahn, an analyst in the online advertising group with research consultancy Jupiter Media Metrix Inc.

Sometimes shops don’t just die outright. They wither, leaving clients to only slowly realize their account performance could be in jeopardy, Grahn said. Projects and site launches can become stalled and marketing initiatives can be delayed.

"For those who are depending on the campaign to drive business, any flux is more than a hiccup," Grahn said. "If they have to start from scratch, even within the same organization, your performance is hurt, momentum is lost and it throws your campaign into flux."

The type of agency and the services it provides can determine the scope of the problem, said John Nardone, president of international media with Modem Media Inc., Norwalk, Conn. Clients of agencies that are building sites and handling online marketing can find themselves stranded if neither the site nor the media supporting the brand has been completed, he said. (Last week, Modem Media announced plans to reduce staff by 4.8%, or 40 workers.)

"You’re stuck in the middle of some project that’s not easy to yank and hand over," he said. "That’s scary stuff because you don’t know what you’re going to find once you get under the hood. It’s very risky."

The fallout in the interactive agency community is likely to be a short-term, if widespread, phenomenon, as the industry weeds out failing shops, Grahn said. The current interactive ad shop woes don’t pose a long-term problem to marketers, he said. "It’s definitely a buyer’s market for agency services," he said. "It would take you literally 10 minutes to get 10 more to line up at your door for your business, at very favorable terms."

Still, the short term can be painful. For his part, Arvida’s Cousins isn’t sure how much of his problems with UCI Web related to the company’s downsizing.

Before pulling his account from UCI Web, Cousins had already begun preparing a transition plan. Realizing the risks of outsourcing, Arvida staffed up internally.

"We saw the need to commit to adding people to certain areas if we were going make viable," Cousins said. "You have to make a monetary and people commitment if you have something that’s going to survive."

Since the launch of Arvida’s site last year, Cousins had been augmenting Third Street’s site work with services from Power Images, a Fort Lauderdale, Fla.-based graphic design and interactive shop. Even when UCI Web still controlled the Arvida account, Power Images handled about 10% of the site work. Now, Power Images handles about 75% of the account and in-house staffers handle the remainder.

Making it work

Clients can avoid getting caught short in the midst of agency transition by planning ahead, Grahn said. During the review, request references and an existing client list, discuss the agency’s financial status and outside funding sources with its principals, and look for other signs of long-term stability.

Once an agency has been selected, create a strong bond with the senior account representative, he said. If anything falls apart and the shop breaks up, the rep will have a thorough understanding of the business—and the account can follow the rep to the next post.

"These are the same criteria that people should have been using all along," Modem Media’s Nardone said. "But people got blinded by science and sold on technology."

Grahn suggests clients bolster outside agency support with an internal team that can build ads, negotiate short-term media buys and carry on the marketing until a new shop is brought on board. "In a pinch, a lot of marketers can pull a lot of the work in-house," he said.

That’s what they’ve done at Arvida. Together, Arvida and Power Images now perform routine site content updates and plan the "big-picture stuff" about the next generation of the site and what Arvida’s online marketing should entail, Cousins said. They hold weekly planning and trafficking meetings. Cousins said he knows where the site is going.

"It’s working out a lot better. You learn by your mistakes," Cousins said. "We’re a lot happier than we’ve been for the last five months."

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