Ad agencies, dot-com consultancies vie for Australian Internet business

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SYDNEY--A string of Australian ad agencies are scrambling to establish new-media divisions. In the past month alone, eM&C Saatchi,, Clemenger Direct and now DDB Digital have launched. Estimates on the cost of establishing a new-media division in ad agencies range up to $4 million.

Euro Interactive and Ammirati Puris Lintas Digital were among the first interactive divisions of Australian ad agencies to provide new-media services to clients nearly four years ago. Leo Burnett Connaghan & May has been building Web sites and providing content for two years.

The ad agencies are taking on local Web design companies such as Spike, Zivo and Swish, which have successfully grown their share of marketing budgets during the past five years. George Patterson Bates' parent, The Communications Group, bought interactive marketing consultancy Harrow four years ago and renamed it

Some argue against separating the new-media function. Leo Burnett Connaghan & May CEO Robert Clarke says: "Spinning off our new-media unit would be going against our philosophy of providing integrated marketing services. We've been building sites and providing content for years."

Mojo Group Chief Executive Nicholas Davie says the launch of was the beginning of a new era for the ad agency. "There are a number of new forms of communication, which is only going to increase in the future, and at a dramatic rate over a short period of time. We need to find ways of weaving our clients' brands and products into that context.", part of the Publicis Group, will provide consumer "entertainment" for brands which would be "weaved" into a variety of programming -- or content -- delivered through broadcast and narrowcast media, including the Internet.

Copyright March 2000, Crain Communications Inc.

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