Interact & integrate

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Goodby, Silverstein & Partners builds brands, not Web sites. And while larger ad agencies promote flashy interactive divisions, Goodby has quietly made interactive simply one more element it deploys in integrated campaigns.

"The way we approach it is, our job as an agency is to deliver great ideas that produce results for clients," says John Elder, director-interactive services at the San Francisco agency. "We focus on what we're good at, and that's creative."

Goodby's approach -- also seen at other strong creative agencies such as Wieden & Kennedy and Carmichael Lynch -- takes a road less traveled, and a different direction from many big agencies that have felt the need to set up separately branded interactive divisions.

The separate approach has been followed by such major agencies as J. Walter Thompson USA, Ogilvy & Mather, DDB Worldwide, BBDO Worldwide, Leo Burnett USA and Grey Worldwide.

These agencies are big, they're well-known and some of their interactive divisions have spiffy names, such as BBDO's @tmosphere and Leo Burnett's Giant Step.

The big shops been held up as poster children for agencies' foray into the interactive medium.

But there also are ad agencies rarely mentioned in talks about online advertising, agencies that have built their reputations on strong, skillful creative executions in TV, print, outdoor and radio media. Agencies such as Goodby, Wieden, Carmichael Lynch and TBWA/Chiat/Day are handling interactive work for clients, but these shops and others say they treat Internet-based marketing merely as part of the whole.

Rather than set up separate interactive units, they've purposely blurred the line between online and offline, delivering what they say are truly integrated campaigns from truly integrated agencies.

And, they say, they are doing what they do best: creative work. They're just applying it to a new medium.

Analysts disagree as to whether their approach is insightful and savvy or merely lazy, late and counterproductive.

"Creative doesn't mean jack online," says Forrester Research Analyst Jim Nail. "They can do the prettiest stuff they want, but if the results aren't there, they won't be able to hide behind the Cannes Lion."

For example, Nike's "Whatever" campaign, from Wieden, Portland, Ore., received considerable attention because it sent TV watchers to the Web to view the end of the commercial on, which Wieden built with Web developer one9ine, New York.

The ad campaign was visually appealing, Mr. Nail says, but had a major flaw: "You never get to learn anything about the shoes," he says. "At a certain point, you have to move beyond branding and make the cash register ring."

(Nike hasn't neglected e-commerce. Last year it opened an online store called the Nike iD initative, in which consumers are able to buy customized cross-training or running shoes, and also invested in e-tailer Fogdog Sports. A "Nike Store" is reachable through the Whatever site.)

Others say what's most important is agencies' ability to deliver integrated campaigns, which can be done equally well through partnerships with other creative, interactive or production shops, says Michael Markowitz, president of Michael Markowitz & Associates, a Santa Fe, N.M.-based advertising and communications consultancy.

"What clients weigh are the potential synergies of having an integrated team that all work for the same company vs. what inefficiencies they might have to accept in order to get a better class of talent in, for example, interactive," he says. "My personal opinion in advising clients is that I'll sacrifice 10% of potential skill or even cost for synergy, but I won't sacrifice much more than that."

The reality, he adds, is that many agencies preach integration but don't deliver because they aren't equipped to do so.

"The fact is, the level of integration and synergy that most big agencies try to present is, to a certain extent, a hoax," Mr. Markowitz says. "The turf wars and the egos internally within these so-called seamless organizations are intense. The organizations we are talking about are marketing [agencies]. So they are very good at projecting an image. The reality is that these things are far from seamless."

Even creative agencies that claim everything is integrated must reach out to smaller back-end technology developers and even Web-site builders when jobs get too complex.

Creative agencies believe their approach to interactive is effective and best leverages their brand-building expertise.

"Our philosophy is you'd be hard-pressed to find an agency that hasn't stumbled over itself three or four times in developing its interactive capabilities," says Steve Diedrich, manager of interactive at Carmichael Lynch, Minneapolis. "[So] we've let the group evolve as our clients' needs evolved," he says of the agency's interactive team. The group, now comprising 10 to 20 staffers, started interactive work 1995 for Department 56, a gift company. Carmichael calls on giant MarchFirst and on St. Paul, Minn., i-shop Ruckus Interactive for some interactive projects.

Mr. Diedrich says the agency has delivered interactive work for clients such as American Standard, Northwest Airlines and Porsche Cars North America.

"For clients that didn't have Web sites when they first came to us, we developed those. We've also done CD-ROM projects, online advertising, online sponsorships," Mr. Diedrich says.

He says the agency has partnered with outside agencies including giant MarchFirst and St. Paul, Minn., i-shop Ruckus Interactive on projects that were technologically complex.

"Depending on the scope of the project, we'll go outside [the agency]. We have no interest in solving it all here." That may not be too different from the way ad agencies hire production companies to execute their television commercials.

For some agencies that have not parsed out interactive capabilities, it's been difficult convincing clients they can handle it.

"It's a tough sell," says Rich Person, exec VP of direct and interactive marketing services at Mullen, Wenham, Mass. "[But] clients are starting to come around. They didn't take us seriously and now they are. We've been doing this [interactive work for clients] for five years."

Mullen has chosen to focus its interactive efforts in areas where it can apply its expertise in creativity and branding. Interactive marketing services ventures such as Digitas and Razorfish "do not get the branding thing, it's not part of their DNA. We do get it," Mr. Person says.

"The trendy things are the Agency.coms, the Zentropys, and we're just not going to go that way,' he adds., partly owned by Omnicom Group, is a pure-play interactive services venture. Zentropy is an i-shop rollup controlled by Interpublic Group of Cos., which also owns Mullen. Mullen's interactive contingent, meanwhile, functions as part of Interpublic's Lowe Group Digital.

It's traditional agencies, not i-shops, that can develop fully integrated campaigns, argues Steve Sandoz, Wieden's interactive creative director.

"Our belief in this space is that in order to do the most interesting work in the online medium, the best way to do that is complete integration for everything you do for a client," Mr. Sandoz says.

Consistent with that philosophy, the agency opted not to establish and brand a separate interactive arm.

"Either acquiring an agency or building a separate agency was at cross-purposes with the whole integration model," Mr. Sandoz says. "If the whole goal is how you use these online tools to enable someone to go deeper into a relationship with a brand, then it's not a discrete element but an extension of what you're doing in other media. Better to do that with a small, nimble group of individuals who can take advantage of the rest of the agency's resources."

Wieden handles Web-site development, online advertising and online media-buying for clients. The agency has 11 interactive staffers in its Portland headquarters and about 10 each in New York and Amsterdam.

The agency will work with design or production shops if necessary. More likely, it works with shops that can develop the back-end technology for sites.

In addition to Nike, Wieden has done interactive work for clients including AltaVista Co., Calvin Klein Inc. and Another traditional agency, TBWA/Chiat/Day, Playa del Rey, Calif., works with Red Sky Interactive, San Francisco, to do "heavy lifting" on certain "large-scale projects that will last for a long time -- Web sites that will [last] a year, if not more," says Jason Kuperman, director-convergent strategy (son of Bob Kuperman, president-CEO of TBWA/Chiat/Day Americas).

For example, TBWA/Chiat/Day will call on Red Sky, which recently merged with New York i-shop Nuforia, "for any clients doing any e-commerce or large database work -- anything that requires back-end infrastructure," Mr. Kuperman says. "Not because that's what Red Sky's known for, but because we are not interested in getting into it in any great depth."

That strategy, he says, allows interactive staffers at TBWA/Chiat/Day to focuses on marketing. "Our role is to assess how the site is designed from a brand standpoint," Mr. Kuperman says in referring to a site the agency developed for Nissan North America's Infiniti i30.

"We see that the Internet is a really powerful tool to help build markets. So having a separate division for us is not something we scoff at," he says. "(But) we feel the benefits of delivering a truly integrated campaign, with the same creative director, etc. . . . are so much more compelling than getting caught up in setting up a separate division.

"We love working with Red Sky," he adds. "It still feels really integrated because we work well with them."

TBWA/Chiat/Day actually was early to get into -- and out of -- interactive. It set up an ambitious interactive operation in Los Angeles only to shut it down in 1997, when the agency decided to farm out such work to i-shops, such as Red Sky, in which parent Omnicom owned -- and still owns -- a stake.

Sibling Omnicom shop Goodby in San Francisco is focusing its interactive work on creative.

"Our mission continues to be: Extend our great thinking for clients into the online space," says Mr. Elder, Goodby's director-interactive services.

Goodby keeps interactive "just another department within the agency because we want to keep it as integrated as possible," he says.

The agency, which doesn't develop Web sites or back-end integration systems, has created online advertising for clients including Hewlett-Packard Co.

For traditional agencies, tackling interactive is no longer an option, Forrester's Mr. Nail says.

"By 2004, 22% of marketing spending will be interactive, [including] Internet advertising, interactive TV, e-mail, Web-site design. That's a big chunk of the budget. So if you don't understand how to create an engaging campaign on the Web, you're in deep trouble four years from now."

Mr. Nail says to nurture interactive capabilities, an agency must set them up as a separate entity, such as @tmosphere, which opened last year as an arm of BBDO Worldwide's New York office with a mandate to create and integrate online and offline work.

But Rich LeFurgy, a partner at venture capitalist Walden Group's WaldenVC and chairman of the Internet Advertising Bureau, endorses the integration theory: "If you look back when TV was emerging, it was only the agencies that fully embraced TV through TV production capabilities and that saw the potential of TV by committing to their own TV resources," he says. "Those are the only agencies that even exist today. All those agencies that didn't embrace TV are now either out of business or were acquired.

"At the end of the day, this is just one more way to communicate with the consumer," Mr. LeFurgy says. "It needs to be integrated in everything that an agency does for a brand or a business because treating it as a separate part of the mix ultimately doesn't work."

That said, Mr. LeFurgy doesn't think even the creative agencies preaching integration get it, either: "Creative shops are still looking down their noses at the Internet and don't consider it to be a full peer to TV advertising, mainly because they can't figure out how to get a :30 on the Internet. I don't think they've really built out their capabilities for the Internet.

"On the other hand, the big agencies that have chosen to have separate interactive units that either grew out of their direct marketing capabilities or have been acquisitions or have been little more than strategic investments are not integrated nearly enough," he says.

"Until everyone is pulling in the same direction with the same [profit and loss] and management structure, we're still going to see different ways of looking at the world."

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