To Lead Overall Brand Strategy, Digital Shops Have Much to Do

Forrester Study Says Four Core Capabilities Need to Be Developed

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NEW YORK ( -- Digital agencies should take the reins on overall brand strategy for marketers in the next five to 10 years, but they have much to accomplish before than can do so, according to a new report from Forrester Research to be released today.
Brian Haven
Brian Haven

"Increasingly marketers are realizing that [offline and online] has to be integrated ... but interactive agencies have not yet proven they have the capability to manage brand strategy," said Brian Haven, senior analyst at Forrester Research and the author of "The Forrester Wave: Interactive Marketing Agencies."

Core capabilities
However, the report suggests interactive agencies are better positioned to take over brand strategy than traditional agencies because of the data and insight they are able to cull from interactive channels and because consumer behavior is shifting toward such channels. But to get there, digital agencies need to develop four core capabilities, according to the report: measurement and analytics, audience research, cross-channel integration and social media.

The study considered which agencies have the most potential to become brand strategy leaders and ranked seven of the country's leading interactive agencies, from holding companies to independents: Avenue A/ Razorfish, Critical Mass, Digitas, Imc2, OgilvyInteractive, Sapient and VML. All agencies have a minimum of $50 million in interactive revenue and at least a 20% revenue growth from 2005 to 2006.

Of the seven agencies evaluated, Ogilvy Interactive, Avenue A/Razorfish and Sapient were in the top tier. Digtas followed closely behind, with VML, Critical Mass and Imc2 following on the second tier.

52 criteria
The agencies were evaluated on 52 criteria that included agency tools, techniques, strategic capabilities, planning process, measurement and emerging channel experience and expertise. They were also judged on forward-looking strategy to meet clients' demands in the next three to five years and management team, vision, product and services road map.

OgilvyInteractive, the agency with the largest interactive staff in the evaluation, was praised for its strong analytics capabilities, robust audience research techniques and broad experience with emerging channels and social media.

But OgilvyInteractive's weakness is the lack of enough collaboration with sibling WPP Group agencies to really lead brand strategy, Mr. Haven said: "It's a question of how they fit into the holding company model."

Avenue A/Razorfish was praised for its quantitative and qualitative audience research capabilities and measurement and analytics and broad experience with social media, but according to the report the agency's "overwhelming focus on the digital space means that it's not yet equipped to lead overall brand strategy."

Sapient, Digitas
Sapient's strengths lie in technology integration, measurement and analytics, but its weakness is the perception in the industry that it doesn't produce good creative work, Mr. Haven said. Meanwhile, Digitas was credited for its robust measurement and analytics capabilities. But Digitas could stand to increase its skills in social media.

VML, Imc2 and Critical Mass were all praised for strong web design skills, but critiqued for relying on strengths in interactive-marketing basics.

"When it comes to web design, they do a good job, but broad interactive capabilities are still anchored in the website," Mr. Haven said.
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