Prosperity Recruitment are the organisers of a Digital Media Seminar taking place October 2nd 2008, 2pm-5pm at the Digital Exchange Building, Dublin. Martin Bailie of London Agency, Glue, will speak on merging online with offline to deliver highly effective integrated campaigns. You can register here.
In April 2008, online marketing agency, Interactive Return, was acquired and became part of Publicis Groupe Media (Ireland). This post examines the motivations for mergers and acquisitions between digital advertising agencies and offline (traditional?) advertising agencies as well as the challenges and opportunities presented by such events. The prospects for similar mergers or acquisitions in the Irish marketplace are then addressed.
Motivations for the Digital Agency to Merge or be Acquired
1. Digital marketing has become mainstream. For advertisers in many sectors including travel, accommodation, tourism, financial services, technology, retail and government, a significant portion of advertising and other promotional budgets now goes into digital channels. As digital marketing budgets increase, advertisers are seeking to spend this budget where they spend the rest of their advertising budget - with their ad agency or media buying agency. The larger the advertiser’s digital budget, the faster this migration of online marketing budgets to the established ad agencies occurs.
2. Acquisition by a large ad agency should provide for the digital agency (easy?) access to larger advertisers.
3. Partnering with a multi-channel offline agency should provide opportunities to execute integrated online/offline/through-the-line campaigns which (from recent experience) is very interesting.
4. Most digital marketing agencies are micro-sized, owner-managed entities. Acquisitions and mergers provide the principals and other shareholders with an opportunity to realise the investment in the company.
Motivations for the Ad Agency or Media Buying Agency to acquire a Digital Agency
1. Advertisers are seeking integrated online/offline solutions. While, in many sectors, the proportion of the budget given to online may still be small, online is the fastest growing area of advertising spend for virtually all advertisers. In an economic downturn, many observers feel that there will be an even faster migration of advertising budgets to online channels.
2. Even where the demand from advertisers for online marketing appears to be low, online is still cool. Ad agencies want to be able to demonstrate that they are “ahead of the curve” in regard to their online capabilities.
So, what’s it like being part of big ad agency now?
I’ve heard this question a few times over the last four months. The short answer is, “it’s great”. Myself and my colleagues have been welcomed with open arms into our new parent company. Interactive Return continues to operate quite independently but in partnership with Publicis companies in Ireland and further afield. My colleagues in those companies feel that Interactive Return brings value to their client campaigns. As a result Interactive Return is now working with more global brands than ever before.
It is often suggested that concern about loss of budgets to offline channels can hamper the integration of a digital agency into a larger offline agency. If everybody says it then I guess it must be true. However, we most certainly have not experienced it. A genuine commitment by all stakeholders to ensure that we deliver what’s best for the client has resulted in the integration of Interactive Return’s service portfolio into the overall Publicis offering within a few short month
Digital Marketing Landscape in Ireland
Of the main global advertising networks, in Ireland just one of these, Publicis, has built-up its digital marketing capabilities through acquisition, as well as through organic growth. The other networks have taken a more cautious approach. There remains a large number of small, independent online marketing service providers. Some of these have done pioneering work for many years. As the industry matures during an economic downturn, I believe there will, in the next one to two years, be considerable consolidation through business failures, mergers and acquisitions. Small, independent service providers will continue to be successful where they can excel in new online marketing niches.
This week saw the launch of Google’s new browser, Google Chrome. Google’s history of product development and product launches has not always covered the $140Bn company in glory. A browse through Google’s product offering reads more like a potted history of the commercial internet than a product portfolio. However, Google Chrome is, in my opinion, completely different. This really is the big one.
Emer Lawn at Interactive Return has covered some of the features and functionality of the new browser. This post looks at the business significance of Google’s latest contribution to the online world.
Mozilla Firefox proved the case that a small, relatively unknown, unconnected company can take a big slice out of, what looked like, Microsoft’s hegemony of the browser market. To date, most commentators seem to feel that Firefox will be most adversely effected by the arrival of Chrome. I disagree. Internet Explorer’s share of the market is about to be decimated.
Chrome is the interface that will draw together Google’s disparate online applications including Search, Docs (The Microsoft Office killer), Gmail and everything else, and piece them together into a brave new, Google-managed, online environment. Google’s applications have already made significant in-roads into schools, colleges and universities. In a few years time Microsoft Office and Internet Explorer will seem more and more foreign to each new batch of graduates who have grown up on Google’s “free”, online, open-source applications.
Web stats for the Interactive Return website show that 4 days post-launch of Chrome, 1% of visitors to the Interactive Return website are using Chrome. Over at Search Engine land, Barry Schwartz is reporting 10% Chrome usage! I suspect the folks in Redmond havn’t been sleeping much this week.