It seems that 2005 is the year of the digital media review. Orange, BT, Lloyds TSB, BSkyB, Camelot, the AA and now Abbey and Cahoot have held digital-only media reviews this year. So far, the offline agency hasn’t won any of the pitches.
These are major blue-chip clients and all are heavy users of online services – big prizes for the winning agencies. But the businesses above have other common points. They are all data-rich companies, with marketing teams who are well versed in direct customer acquisition and retention techniques. These businesses have the budgets and the expertise to appoint digital specialists, and it would be logical to assume that, in doing so, they are setting a trend that other advertisers may follow.
These pitches will surely act as a wake-up call to any media agency that doesn’t have a strong enough digital team. Gone are the days when agencies could assume that online business would automatically follow offline – moreover there appears to be a marked difference in the quality of the offline and online offerings from a number of the major agencies.
But is it good for the industry to have online media planning and buying separated from offline?
Certainly it is encouraging to see clients taking the online media channel so seriously. It is a different discipline and it requires different skill sets. For a client to assume that its existing media agency is the best it will find for its online communications is a major supposition, especially as that agency may have been appointed when the online channel was still in its infancy. So it is a logical and mature decision for a client to review its options.
From the agency’s perspective, the spate of pitches is good news (except maybe for the poor exhausted souls taking part). Agencies that have invested in strong digital teams are reaping the rewards and recognition that they deserve. Interestingly, the winners have not only been the independents such as I-Level, but also companies within networks such as Zed and Media Contacts. It seems that clients are looking for quality of team and product, regardless of whether the digital teams are part of a network – independent, big or small.
However, in the case of the AA, Camelot and BSkyB – companies that chose to separate online and offline media accounts for the first time – this beggars a much bigger question. Who is making the decision about how to split budgets between online and traditional media channels? Surely it is not the media planning agency because, in most cases, it will lose revenue by recommending digital solutions. The clients will have to be the arbitrators in defining the on- and offline channel mix.
This means that media agencies, many of which have invested hundreds of thousands of pounds in planning tools and expertise, will no longer be able to make critical decisions about investment levels in the fastest-growing media channel.
For online media owners, there is a case that separation of on- and offline media is a clear sign that their channel is being taken more seriously than ever – a real coming of age. However, they lose the opportunity to pitch their channel to media planners against the traditional media options. When an agency is appointed for online work only, the media owner’s pitch is all about its share of the online cake. This seems somehow inappropriate in such a fast-growing and dynamic sector.
The closest parallel we have in the UK is direct mail. DM specialist agencies plan over 90 per cent of all DM activity. Decision making between above- and below-the-line budgets is usually made by the client before the agencies even receive a brief. DM agencies only ever talk to clients about DM and media agencies only ever talk about above-the-line channels.
If clients appoint separate offline, online and DM agencies, then a lot of the onus will fall on the clients to drive the big communications decisions, and to pull together these different – and sometimes conflicting – teams. v