DIGITAS: Shop's direct marketing heritage gets facelift

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digitas changed its name in December to better reflect its aspiration to become a major Web marketing services agency.

However, the Boston-based company, which was Bronner Slosberg Humphrey and Strategic Interactive Group and then renamed Bronnercom before adopting its Internet Age moniker, already has a solid base from which to build significant online services.

`BRICKS AND CLICKS'

"It's been a big transformation, essentially taking two companies -- one a pioneer on the Internet, the other in one-to-one relationship marketing -- and putting them together into one Web-based enterprise," says Kathy Biro, vice chairman-president of Digitas. "But it's more than a name. It's the formalization of our point of difference, that we're about integrating bricks and clicks, moving established businesses into cyberspace through the marrying of our direct marketing heritages with other media."

Wall Street is waiting. Digitas completed its initial public offering in mid-March on the eve of the Internet stock implosion. The stock soon plummeted and has remained south of its $24 IPO price.

ACQUISITIONS AHEAD

But the IPO provided more than $200 million in cash, allowing Digitas to pay debt and fuel its global expansion, which, Ms. Biro emphasizes, could include acquisitions.

"Our growth to date has been organic, no acquisitions," she says. "We never will be a roll-up. We're not building a holding company model," she says.

But "We haven't ruled out acquisitions because, certainly, our clients are asking us to build a global network and it may well turn out . . . that acquisitions may be the best way to grow."

Digitas' strategy is to remain firmly focused on blue-chip companies, including longtime clients American Express Co., AT&T Corp. and General Motors Corp., which make up two-thirds of its business. The three clients alone, Ms. Biro points out, require the company to grow internationally.

As such, Digitas in December 1998 opened its first international office in London, now with a staff of more than 60, and this spring opened an office in Miami to better serve the Latin American market.

BUILDING ASSETS

"Many people laughed at us, that this whole gold rush was about securing dot-coms as clients," says Ms. Biro. "But in those businesses, a big-scale relationship in the Internet alone is maybe $2 million. Our average client is $10 million, with AT&T, AmEx and General Motors each $40 million-plus accounts."

"We're not going after a flash-in-the-pan," Ms. Biro continues. "We work with companies building businesses that are meant to last. We're about building sustainable assets."

Among other new-business ventures, Ann Taylor, Domino's Pizza, Wells Fargo Mortgage Co. and Xerox Corp. named Digitas to create various integrated Web and relationship-marketing capabilities. Digitas also agreed to work with RichFX, a computer-generated video technology company, to develop 3-D retail Internet sites and jointly market the technology to potential e-commerce customers.

"It's all about providing the technology and the creativity and, in that, we're creating an industry that defies categorization," says Ms. Biro. "The people who follow this industry try to put it into convenient boxes. So, for the technology-oriented, it's a technology undertaking, while marketing and advertising say it's another form of advertising. Well, it's all of those things and more.

`ART OF THE POSSIBLE'

"Technology defines the art of the possible," she continues. "If you're not thoroughly versed in that, you're yesterday's news in terms of what you're able to physically create for clients. It's important to be au courant. The rest comes down to strategy and creative execution."

Still, in Ms. Biro's mind, going public was a major step forward for the agency.

"It was a fundamental element for us to get stock ownership in the hands of every single employee," she says. "It's meant to both reward and retain employees, which is hard to do in a high-growth business."

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