SPECIAL REPORT: Midsize agencies: Perfect new-media fit?

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Stable funding, fewer managers, give boost to shops that aren't so large

Like the porridge that Goldilocks tried, some marketers are finding global agencies too big and Web developers too small for handling interactive work.

It's the midsize agencies--those shops with $100 million to $1 billion in billings--that turn out to be "just right," combining big-company stability with small-shop smarts.

"Midsize agencies can invest where clients are leading," said Steve Horton, director of interactive and new media at Martin/Williams, Minneapolis. "We're financially stable and there are fewer people to sign off [on projects]."

A LOSS BUT NOT A STRIKE

Although Martin/Williams last month gave up its 7-month-old CompuServe account to DDB Needham Worldwide, Chicago, it doesn't view the loss as a strike against the interactive capabilities of midsize agencies.

"We view it as a consolidation," Mr. Horton said, adding that Martin/Williams is still working on CompuServe's second online service, code-named Project Wow, and other projects.

While midsize shops may not have the firepower of larger agencies, they make up for it in creativity, said Matt Thornhill, president of Martin Interactive, Richmond, Va.

The agency has handled interactive assignments for clients including the Family Channel, Marriott Corp. and, most recently, Coca-Cola Co., which turned to Martin after a previous attempt at a Web site with developer Executive Arts, Atlanta, fell short.

CREATIVITY AND BRAIN POWER

"Midsize agencies like ourselves are...going to win in this arena with our creativity and our brain power," Mr. Thornhill said.

Executives at midsize agencies like Fallon McElligott and Dahlin Smith White also see themselves as well-positioned to serve clients on the basis of their interactive capabilities.

"It doesn't take a cast of thousands to do a Web site, and it doesn't take a committee to decide upon the right strategy and creative," asserted Mark Goldstein, president-integrated marketing at Fallon, Minneapolis. "What it comes down to is the passion you can put against big ideas."

HIGH TECH TO INTERACTIVE

DSW Interactive, Salt Lake City, now has about 25 staffers working exclusively on interactive accounts, said Mark Davis, VP-director.

The agency, founded 10 years ago, has always concentrated on high-tech clients and has made a natural transition to working on interactive projects.

Marketers that want to extend their Internet activities beyond advertising need agencies that can react quickly to changing market conditions without having to work through layers of executive approvals, Mr. Davis said.

At least one big-agency veteran agrees.

"I see [midsize agencies] as being more nimble, more resourceful," said Erica Gruen, a longtime Saatchi & Saatchi Advertising media executive who earlier this month joined Merkley Newman Harty as director of media services.

"We can take a total communications approach, with everyone from public relations to direct marketing to interactive...compared with larger agencies that work within more defined segments of advertising, direct marketing, promotions, interactive. We don't have to go through so many layers."

Do midsize agencies have an edge when it comes to interactive projects? With less managerial levels to wade through, can they service accounts more quickly and with more flexibility? E-mail interactive editors Debbie Williamson at IMM@adage.com or Kim Cleland at Kimcleland@aol.com or go to AdAge.com/InterActions/index.html to post your ideas on our bulletin boards.

Copyright February 1996 Crain Communications Inc.

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