For agencies, one thing's for sure: Interactive is in. Everything else is up in the air.
How to do it. Where to do it. When to do it. Why to do it. And especially, who should do it.
In the frenzy to be interactive, advertising agencies, marketing communications companies and multimedia production shops are both competing and combining with each other. Agencies are fighting to keep control over client business; multimedia companies, meanwhile, spy big bucks from big marketers.
"There's a definite fear factor that everyone has," said Bill Harvey, president-CEO of Next Century Media, a new-media consultancy in New Paltz, N.Y. "The new interactive media companies fear they are being given a lot of money with a mandate to succeed, when in fact they're often unsure what will work and what won't. And of course the traditional agencies fear they're going to lose clients to new media."
It's this uncertainty that's driving agencies to staff up on technical programmers, production companies to seek out savvy marketers and designers, and marketing communications companies to focus on interactive services.
"It's pretty competitive out there right now," said John Houston, director of strategic consulting at Modem Media, a Westport, Conn., interactive agency whose clients include J.C. Penney Co., CBS and AT&T. "Traditional agencies are spawning interactive groups and multimedia production companies are aspiring to be marketers .*.*. and everyone's trying to get that winning combination needed to serve advertisers well."
Traditional agencies especially are trying to ensure their interactive bases are covered, for fear of losing a client's confidence-or worse-its business.
"There are two vectors coming at this in different ways, and we think the agencies will win because interactive is just another medium and technology won't drive its success-strategic marketing will," said Larry Dexheimer, a partner at Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York. "We get small companies pitching us left and right, and we use them for formatting computer language. But pretty soon, we'll be doing it all in-house and there won't be a need for them."
In the near term, however, Messner recognizes its need to go out-of-house for some work. The agency contracted Seattle-based Free Range Media to create MCI Communications Corp.'s Gramercy Press Web site and San Francisco developer Organic Online to build sites for Volvo Cars North America and 1-800-COLLECT.
Most industry analysts predict such technical providers will be a dime a dozen eventually, and interactive programming will be a standard medium like print or broadcast.
"Over the years the programming that's not yet invisible will become invisible," said Gene DeRose, president of consultancy Jupiter Communications Co., New York. "The we're-gonna-put-you-up-on-the-Web companies won't be alive for long. Consultants and developers are getting paid a lot of money to create sites, when next year there'll be a set of in-house tools for a fraction of the cost."
In the meantime, there's a lot of give-and-take between traditional agencies, interactive agencies and multimedia companies.
"One of my responsibilities is to read the trades and talk to as many people as I can, evaluating price and talent," said Marian Wright, a senior media planner at Deutsch, New York. "Some college kid could do the programming for nothing, but to go with a company that has real marketing savvy will cost a lot of money."
More often than not, agencies and advertisers are willing to pay big bucks to get results.
"We get at least three solicitations a week; I haven't even had time to send out our mass mailing," said Steve Klinenberg, director of new-business development at Digital Facades, a seven-person Los Angeles company that has worked with Ketchum Advertising on the Acura account, created a CD-ROM for Sony Consumer Electronics and is currently building an Internet site for sunglasses manufacturer Oakley Inc.
Mr. Klinenberg, who left Chiat/Day's new-media department only four months ago, believes interactive media will be just one part of the advertising mix.
"What we do kind of parallels the role of a production house for television commercials. We're a vendor where agencies can go for specialized help, so we want to cultivate relationships with agencies," he said.
Capitalizing on pre-established agency relationships, a few interactive vendors have actually spun off from larger commercial production companies, including R/GA Interactive and Red Sky Interactive.
"There are companies out there with a few guys in a basement who can do amazing things," said Brian Loube, head of production for R/GA Interactive, New York, whose 15 employees have worked with Chrysler Corp. and the U.S. Postal Service to develop applications for Time Warner's Orlando interactive TV test. "But it'll be a long education to understand the needs of advertisers and agencies. Because of our background with R/GA Digital, we already understand that."
Similarly, Red Sky Interactive, a five-person company, reaps the benefits of the reputation of its parent, Bay-area Red Sky Films, a production company that has worked for Foote, Cone & Belding; J. Walter Thompson USA; Levi Strauss & Co.; and the Gap.
"Our relationship with agencies is very synergistic. They bring us in right at the sales pitch to show clients our team composition and physical resources," said Tim Smith, Red Sky's president-CEO. Red Sky has worked on interface prototypes for U S West's interactive TV test in Omaha and shares a building with Saatchi & Saatchi Advertising in San Francisco.
However, most production companies understand their roles may be fleeting in the interactive industry. So instead of waiting for agencies to catch up to them, some are marketing actual products, like online editing programs or interactive how-to books.
"Pretty soon agencies will know how to do all this," admits Andrew Fry, president of Free Range Media, the Seattle multimedia company behind MCI Communications Corp.'s Gramercy Press Web site as well as IBM Corp.'s Digital Alchemy site, a showcase of digital art and animation created by IBM hardware.
Other companies have either staffed themselves or formed new consortia to offer full interactive agency service.
Modem Media and Magnet Interactive Studios, based in Washington, for example, both call themselves full-service interactive agencies, with departments including marketing, creative, research, technology and account service. On the other hand, New York-based K2 Design has formed a consortium dubbed the Interactive Group with companies Online International, which specializes in systems development and marketing, and New Frontiers Information, which produces customized high-end computer technology.
"Companies who are going to make it will have that combination of design, technical programming, marketing and interactive utility," said Greg Jacobson, managing director of CD3, a Stamford, Conn., consultancy that matches multimedia developers with agencies and marketers.
And as in life itself, the most fit will survive and surpass the competition.
"Technology is technology, and it's available to everyone," said Adam Curry, former MTV VJ and president of OnRamp, a New York multimedia production company that created the Planet Reebok Web site.
"That's why it's so competitive-programming will become equivalent to typing. So companies have to really understand the medium as well as pour their own magic sauce on the situation. The companies with the best sauces will win."