Digital Agencies Start To Step Out Of Creative Shops' Shadow As 'Agencies Of Record'

This story was written by David Kaplan.
In the grand scheme of the ad agency business, there are the creative shops at the top, with media and planning agencies playing the support role. Somewhere in betweenor in third placeis the digital agency. But that dynamic is changing. An AdAge piece shows how digital agencies are now starting to compete with traditional agencies for the title, "agency of record." Over the years, the term has lost the meaning it might have held in the Mad Men days, when clients got all their marketing needs from a single agency, as opposed to parceling bits of the ad budget to a variety of specialist shops. Still, being an AOR carries a good deal of cache. The company that holds the title sets the tone for an advertiser's communications strategy and gives them control over the bulk of a client's ad spend.

-- Going where the insights are: Digital shops are seen as offering a number of advantages over their traditional older brothers. The trend of "media neutrality," which tends to de-emphasize the typical hierarchy of big campaigns starting with TV at the top, followed by print, radio, out-of-home and then digital somewhere towards to the bottom. Aside from digital becoming more mainstream, the data and consumer insights online ad agencies possess is considered valuable when allocating a marketing budget.

-- A real alternative, but not a trend: Citing a Forrester report on the evolution of digital shops last year, AdAge quotes analyst Brian Haven as saying that interactive agencies are well-positioned to be the "foundation for all marketing efforts within the next five to 10 years." So in a few, but growing cases, the idea of putting digital shops in charge is not so far-fetched. Still, the notion is limited and Razorfish CEO Clark Kokich tells AdAge that it's a little too soon to call this a trend. However, he adds that online ad agencies are becoming a real alternative for major clients. In other words, if an offline client just needs a branding campaign, best to go the traditional route. But if the campaign demands targeted online research, or if the product is aimed particularly at younger consumers, a digital shop could be more than credible as the AOR.

By David Kaplan