End of Term Report – Digital in 2009

2009 isn’t quite over yet, but we thought we’d get in early with our end-of-term report rather than wait for the New Year hangover. It’s been a pretty good year with fantastic integrated digital work for Walkers, McCain, Volkswagen, Diesel, Innocents and Carling to name but a few.

2008 has been characterised for us by a number of calls from major clients around last Easter all of whom had the same problem. They spend large amounts on digital, often with incumbent ATL agencies who want much bigger budgets for 2009. And they don’t know whether they are getting value and/or the best direction.

Indeed the ATL agency land-grab of digital has continued a-pace and the war stories continue to shock and awe us. Outsourcing is still rife. As we have long said outsourcing is OK, but profiteering from one’s own in efficiencies is absolutely not. One client employed their ATL outfit to develop a site which they duly delivered to general applause. What the client didn’t know is that the agency outsourced the work. What the agency didn’t know is that the outsource agency outsourced it again. What the second agency didn’t know is that the third agency used a freelancer! Thus there were four layers of cost and mark-up passed onto the client. Ouch!

So what of 2009? Clearly the economic situation is going to lead to tight budgets and with luck a subsequent increased use of digital to reach audiences in a cost-effective manner. Clients are going to be looking for truly clever thinking and appropriate charging. So will the industry step up to the plate and react to the realities of the clients situation? Our fear is that too many will still follow the age-old agency ethos of finding fair means or foul to grow their accounts and achieve billings of last years fee plus a percentage. Evidence of the fee proposals we have seen so far says foul!

A worrying trend is the development of major websites where no-one considers the cost of maintenance in the year after go-live. Many sites are being developed that unwittingly lock the client into the agency for the lifetime of the site. There is nothing wrong per se with that – until the relationship deteriorates or the agency demands unreasonable ongoing fees. The balance of power should always remain with the client – they pay the bills. And that means knowing how to plan a technical strategy, write a brief and structure a contract.

Meanwhile, the rise of Digital Out Of Home (DOOH) brings a very interesting convergence between ATL and digital skills. Never before has ATL advertising had the potential to be used so tactically and with such speed to market. In turn we will see mobile interacting with DOOH next year. The opportunities for the creative and technically minded are truly endless.

So what does that all mean for the agency panacea? We believe continued convergence of digital channels will have to drive transparency. Agencies admitting they outsource is one thing. Making a virtue let alone a benefit of it to the client is another. There is an irony that as technology gets better and more available, and clients eyes are opened to the opportunities, that specialist agencies will be ever more in demand. Why? Because more than ever, one agency won’t be legitimately able to handle it all.

The agencies that will triumph in 2009 will be those that can find a model that enables them to operate profitably and inventively at the same time as passing on cost benefits to their clients.

Clients that will commission the best work are those that can operate from a position of digital knowledge and confidence, while knowing where to find and how to listen to the best advice.

Clients are catching up. Greed will not be good in 2009. Prudence combined with brilliance will!

Filed by sam.brownfield on November 7th, 2008 under Rant or Rave?