As marketers invest more money in online media, agencies are beginning to see the value of dedicating staff to buying and planning the advertising.
But the question of separating the work or integrating it is as thorny as the still-unresolved question of how an agency should handle interactive in general.
Some, such as Anderson & Lembke, San Francisco, have formed separate online media divisions. Anderson, for example, has at least 30 online media staffers.
How some shops handle online media buying:
Air Lines, J.C. Penney
|Anderson & Lembke||at least 30||Microsoft, AST Research|
|Ogilvy & Mather||10 to 12||IBM, Duracell|
|Ammirati Puris Lintas||2
|UPS, Compaq, GM|
|Poppe Tyson||2 full-time|
|Merrill Lynch, Toshiba|
|Source: Company data|
Interactive specialist Modem Media, meanwhile, built one of the industry's biggest and most savvy media departments, with plans to place $40 million in online advertising for clients this year.
Other agencies, harking to the not-so-distant past when one person served as interactive "guru," have named one or two executives to oversee online media.
"The rate of change in this medium and the complexity is such that you have to specialize," said John Nardone, director of media and research at Modem, Westport, Conn. "If you're not, then you're cutting corners and doing a disservice to your clients."
Because the user's experience of online media is different from, say, print, the evaluation of where a piece of online creative appears becomes more difficult.
"With print, you can pick where you want to go. With online, you have a multitude of positions," said Robert Storch, media director at Poppe Tyson, New York. "It takes time and a dedicated person to find it. You can't have someone doing all things that traditional media demand and still surfing the Net."
Compounding the problem is the research issue: The data that sites provide varies wildly and analyzing it is a labor-intensive activity, said Mr. Nardone.
COMPENSATION AN ISSUE
Compensation for interactive-dedicated media staff is also an issue, as online media budgets are a mere fraction of traditional media budgets. Agency executives at both interactive and general agencies agree that fee-based compensation is the only way to go.
"Because of the work intensity of it, we'd like to get larger than the 15% [average commission for traditional media buys], but you have to convince the client that the work you are doing is worth the higher compensation," said Poppe's Mr. Storch.
"You can never make it work from a commission base." added Ammirati Puris Lintas' Robert Solomon, president of direct and interactive marketing. "Why should a client pay you on volume of media placed? They should pay you on volume of work done."
For now, marketers don't value online media expertise too highly. According to an Ad Age/Mediamark Research Inc. survey, online buying ranked last in a list of capabilities desired in an ad agency.
The need for such expertise will boom as technology moves forward, media executives said.
"It'll change from a banners-only medium to a much more complex medium," said Robert Adler, media director at Gotham, New York. "Some may argue that creates a greater need for specialists."
SLOWER TO ACT
As was the case a few years ago, the largest ad agencies aren't as quick to build an online media department as the new-media specialists are.
"As we grow, we're going to add interactive media specialists," said Mr. Solomon. "It's just a matter of volume. If the client needs it, we'll have it."
Ammirati's online media group is managed by the direct marketing unit. The agency has two full-time people dedicated to online and an associate media director splitting time between interactive and direct.
Contributing: Jane Hodges
Copyright March 1997, Crain Communications Inc.