Two of the most significant deals in digital marketing history were struck this year. In June, the world's biggest advertising group, WPP, snapped up digital agency AKQA for $560m (£350m), while three months later, rival Publicis Groupe announced it was to acquire independent digital network LBi for roughly the same price.
Such deals reflect the fact that digital is continuing to grow faster than traditional advertising models, and underline how the growing integration of offand online marketing is blurring specialisms. Anil Pillai, UK chief executive at LBi, which works with Lloyds Banking Group, Virgin Atlantic and BT among others, says that becoming part of Publicis Groupe provides the agency with an opportunity to accelerate plans to provide clients with a globally integrated offering.
Expert views: Independent agencies vs big marcomms groups
'This will allow us to target more ambitious client engagements around the world,' he says. 'As long as client demand keeps evolving, and as the boundaries between channels keep blurring, consolidation in the sector will continue.'
SapientNitro, one of just a handful of the remaining big, independent digital agencies, topped Marketing's 2012 digital league table.
LBi, which claimed first place in last year's league table, says its revenue figure went down in 2011 compared with 2010 because it migrated 90% of its media clients to direct billings last year, including major paid search clients such as Play, Boots and Dyson. For the first time, Marketing is also producing a ranking of the top five agencies according to their strengths in the disciplines of social, ecommerce, eCRM, mobile and email.
Deep-seated expertise
This year, SapientNitro has created campaigns for brands such as Sky TV. Nigel Vaz (pictured), the agency's senior vice-president and managing director, argues that there is always trepidation when an independent is swallowed by a network, because, he claims, the holding companies have a proven history of 'killing off the capabilities they originally sought to acquire'.
'The question is not whether the agency is independent or network-owned, big or small - but whether it has the quality, creativity and deep-seated digital expertise,' he adds.
So, do these big agency deals mean that the days of the independent, specialist digital agency are numbered? Vaz maintains that there will always be an opportunity for start-ups to find a specialist foothold and add to the health and diversity of the industry ecosystem. However, he adds that digital has long since ceased to be a specialist requirement for visionary companies that recognise that the medium, in its widest sense, has the power to change every facet of their business, and that its power cannot be acquired in a piecemeal way.
Another intriguing question concerns how brands are likely to react to these acquisitions. Wayne Brown, managing director at Glue Isobar, says that while brands are often concerned about the disruption to the continuity of their agency in light of an acquisition, it won't keep them awake at night.
'They'll watch to see whether a takeover has a negative impact and re-evaluate their relationship if it does,' he says. 'In the best cases they'll see major upsides, as being part of a bigger entity brings with it greater support and access to a wider range of products and services, or the ability to cross geographies.'
However, Natalie Cowen, ex-head of brand and communications at online bank First Direct and now East Coast Mainline head of marketing, says independent agencies often attract specialist people. 'I would expect the agency to have skills that complement my team's, rather than duplicating them,' she says.
Red Bull Racing's former head of digital, David Granger, who launched social-media agency Bell + Watson last month, says that when he worked client-side, he tended to rely on specialist digital agencies. This was because, traditionally, comms departments were split into digital and non-digital, and secondly, if an agency is a specialist, it tends to mean that it knows its subject inside out.
'However as brands begin to consolidate their marketing departments, so they might start to look at agencies that offer a broader portfolio,' he says.
Cost factor
Phil Wright, co-owner and director of gamification agency U Know, says a major factor for brands when choosing between a specialist and a big marcomms group, is the ease of managing the agency roster and cost. There remains a desire among brands to consolidate their roster, with Barclays, Vodafone and Kraft Foods just some of those that have looked to overhaul their digital rosters this year.
'While some areas have become more mainstream, there is a spontaneous need at the heart of digital to evolve,' says Wright. 'This means there will always be many aspects of digital that are "cutting edge" - with the knowledge and skills resting with just a few. This scarcity of the resource means that there will always be elements of digital that will be "specialist".'
James Kirkham is managing partner at social-media agency Holler, which was acquired by Leo Burnett 18 months ago. He says that digital now permeates all aspects of the industry.
'As such, it was vital to ensure our 11 years of heritage and knowledge in digital is not superseded or dwarfed by having to compete with those far bigger than ourselves,' he adds. 'We felt we'd otherwise be marginalised, and wanted to ensure that we'd always be able to have top-table strategic discussions.'
Natalie Gross, chief executive at agency Amaze, contends that, ultimately, digital will not be seen as a specialism forever. As innovation becomes more about the idea and less about the technology, she argues, the more disciplined specialists, such as PR and sales promotion, will prevail.
'Interactive agencies will ultimately have to shed the "digital" label that defines them now, and emerge more as a pure-play technology, consultancy or communications agency,' she says.
Jeremy Garner, executive creative director at Weapon7, says that technology, to an increasing degree, can in itself be a way of standing out and capturing the essence of a brand. He adds that, with emerging technologies especially, it can be important for creatives to work alongside a technological expert.
Brands now expect that agencies will have the necessary understanding to be able to track the digital behaviour of consumers. Whether the answer to engaging with those consumers is digital or not, brands are best served by agencies concentrating on getting under the skin of consumers.
DIGITAL SPACE: WHO IS BUYING WHOM IN 2012
WPP acquired AKQA and Fortune Cookie (through its subsidiary Possible Worldwide)
Publicis LBi
Karma Communications The Crayon Group (including digital marketing services provider Crayon London)
McCann Worldgroup digital consultancy Lakestar Media
iProspect iSpy
Beyond social-media agency C&M
THE BIG DEBATE - INDEPENDENT AGENCIES VS MARCOMMS GROUPS
Does it matter if your digital agency is acquired by a big marcomms group, or do you prefer to work with independent ones?
Natalie Cowen, former head of brand and communications, First Direct:
'On the face of it, digital specialists becoming part of bigger marcomms groups is not a problem. However, a key reason for using a digital specialist is that they are often smaller and more nimble as well as more likely to innovate. Becoming part of something bigger often means that they are less likely to continue to do this, as they get caught up in processes and bureaucracy.'
Richard Ingram, director of brand marketing, Miller Brands:
'Digital can no longer be the expertise of independent agencies; it is too important in the marketing mix. As clients seek integration and simplicity in marcomms, it makes sense that talent is transferred by way of acquisition. The challenge is one of cultural alignment and company values. It is the independence of spirit and thinking that makes an independent entity stand out. If this is lost through acquisition, there is an issue, but if this is retained and absorbed into the acquirer, then all the better.'
Celia Pronto, marketing director, Ford Retail:
'I have worked with network agencies owned by big marcomms groups where our business was complex and international - and found they were invaluable. However, in some of the smaller businesses I have worked in, smaller independent agencies were better able to support our needs, especially as we tended to get lost in bigger agencies. The most important criteria for me with any agency is ensuring they have the digital expertise required and the right agency culture and brand fit. When agencies are bought by bigger groups these are the questions I ask, to establish the likelihood of the acquisition having a negative impact on existing relationships.'
Alison Brolls, global head of marketing planning, Nokia:
'Effective digital marketing has to be completely integrated into marcomms strategy. Client-side, it worries me some companies still feel the need to hive off digital marketing into a specialist team, often quite separate from the rest of the marcomms function. So I see no problem with major agencies striving for an integrated solution for their clients. Bottom line, the agency partner - whether it is small or part of a big group - still has to deliver quality, effective results.'
NOTES TO TABLE
SapientNitro
Founded 1998. Publicly quoted, Managing director Nigel Vaz. No breakdown provided. Clients include Marks & Spencer. Ladbrokes, Sky. www.sapientnitro.com
LBi
Founded 1995. Subsidiary LBi International. Chief executive Anil Pillai. 29% e-commerce, 19% search, 12% consultancy, 9% social, 8% ads, 8% design/build, 4% affiliate, 4% eCRM, 3% media, 2% email, 2% mobile. Clients include BT, Lloyds Banking Group, Virgin Atlantic. www.lbi.com
AKQA
Founded 1995. Subsidiary WPP. Chief executive Ajaz Ahmed. 20% design/build, 20% consultancy, 20% mobile, 20% social, 10% e-commerce, 5% eCRM, 5% ads. Clients include Nike, EDF, Fiat. www.akqa.com
Publicis Chemistry
Founded 2011. Publicly quoted. Chief executive Mike Welsh. 20% eCRM,18% ads, 12% design/build, 10% e-commerce, 10% social, 9% email, 9% mobile, 5% consultancy, 5% search, 2% virals. Clients include SCA, HP, Everything Everywhere. www.publicischemistry.com
Iris
Founded 1999. Privately owned. Joint chief executives Ian Millner and Tom Poynter. 30% design/build, 15% consultancy, 15% social, 10% ads, 10% email, 10% mobile, 5% e-commerce, 5% eCRM. Clients include Sony Mobile, adidas, Reckitt Benckiser. www.irisnation.com
VCCP
Founded 2002. Subsidiary Chime Communications. Chief executive Michael Sugden. Clients include o2, Microsoft, More Th>n. www.vccp.com
20:20
Founded 2006. Publicly quoted. Chief executive Martin Boddy. 26.8% e-commerce, 19.2% design/build, 9.3% search, 8.9% other, 6.3 email, 5.9% social, 5.3%mobile, 5.2% consultancy, 4.6% ads, 4.8% consultancy, 2.3% viral, 1.4% affiliate . Clients include PepsiCo, BP Castrol, Oxfam. www.weare2020.com
M&C Saatchi (UK)
Founded 1994. Publicly quoted. Chief executive Lisa Thomas. 27% design/build, 24% eCRM, 15% consultancy, 13% mobile, 8% ads, 7% emai, 6% social. Clients include o2, RBS Group, DSG International. www.mcsaatchi.com
Wunderman
Founded 1968. Subsidiary WPP/Young & Rubicam Group. Chief executive, UK, Mel Cruickshank. 20% design/build, 20% social, 15% e-commerce, 15% eCRM, 10% ads, 10% consultancy, 5% email, 5% search. Clients include Nokia Global, Microsoft, Ford of Britain. www.wunderman.co.uk
TMW
Founded 1987. Subsidiary Creston. Chief executive Richard Marshall. 25% eCRM, 18% social, 14% design/build, 10% consultancy, 10% email, 10% mobile, 7% ads, 4% viral, 2% search. Clients include Diageo, Sony, Unilever.
Havas EHS
Founded 1990. Publicly quoted. Chief executive Tash Whitmey. 67% eCRM/email, 10% design/build, 10% social, 5% ads, 4% mobile, 3% viral, 1% consultancy. Clients include Tesco Clubcard, Volvo, Diageo.
Amaze
Founded 1995. Subsidiary Hasgrove. Chief executive Natalie Gross. 25% consultancy, 20% design/build, 20% e-commerce, 10% mobile, 10% social, 5% ads, 5% eCRM, 5% search. Clients include Toyota Motor Europe, Unilever, ASICS. www.amaze.com
Publicis London
Founded 1972. Publicly quoted. Chief executive Karen Buchanan. 32% consultancy, 23% design/build, 10% mobile, 10% social, 8% ads, 5% e-commerc, 5% eCRM, 5% search, 2% virals.Clients include Renault, Procter & Gamble, UBS. www.publicis.co.uk
G2Joshua
Founded 1988. Subsidary WPP. Chief executive Tim Hipperson. 20% consultancy, 20% email, 20% eCRM, 15% ads, 10% design/build, 5% mobile, 5% social, 5% viral. Clients include Vodafone, Coca-Cola, HSBC. www.g2.com/g2joshua
Profero
Founded 1998. Privately owned. Managing director Dale Gall. 36.5% media, 16% ads, 8.3% search, 8% social, 6.7% e-commerce, 6.5% design/build, 5% consultancy, 5% mobile,2% eCRM, 3% viral, 1% affiliate, 1% email, 1% iTV. Clients include Marks & Spencer, Western Union, Smirnoff. www.profero.com
Grass Roots UK
Founded 1980. Subsidiary The Grass Roots Group. Chairman David Evans. 55% design/build, 10% consultancy, 10% email, 10% mobile, 5% eCRM, 2% affiliate, 2% media, 2% search, 2% social, 2% viral. Clients include o2, BMW Whitbread. www.grassroots.com.uk.com/digital-marketing
Dare
Founded 1999. Subsidiary EDC Communications. Chief executive Lee Leggett. 35% design/build, 20% consultancy, 20% social, 13% ads, 5% mobile, 2% e-commerce, 2% eCRM, 2% iTV, 1% email . Clients include Sainsbury's, BMW, Barclaycard. www.thisisdare.com
Glue Isobar
Founded 1999. Subsidiary Aegis Media. Chief executive Perry Herriman. 25% consultancy, 20% ads, 20% design and build, 10% mobile, 10% other, 7% social, 5% eCRM, 2% virals, 1% email. Clients include Toyota, Auto Trader, Kellogg's. www.glueisobar.com
Gyro
Founded 1981. Privately owned. Chief executive Christoph Becker. 25% design/build, 25% email, 20% eCRM, 10% ads, 8% consultancy, 3% e-commerce, 3% mobile, 3% e-commerce, 3% search. Clients include FedEx, Virgin Atlantic, HP. ww.gyro.com
MRM Meteorite
Founded 1990. Subsidiary Interpublic Group. Chief executive Debbie Smith. 22% design/build, 18% ads, 15% email, 12% eCRM, 12% mobile, 8% consultancy, 5% social, 5% viral, 2% search, 1% affiiliate. Clients include Direct Line, Vauxhall, Intel. www.mrm-meteorite.com
Imagination
Founded 1968. Privately owned. Chief executive Douglas Broadley. No breakdown provided. Clients include Ford, Shell, Jaguar Land Rover. www.imagination.com
Kitcatt Nohr Digitas
Founded 2001. Subsidiary Publicis Groupe. Chief executive Marc Nohr. 15% ads, 15% eCRM, 15% email, 15% social,10% consultancy,10% design/buiild, 10% e-commerce, 8% mobile, 2% viral. Clients include Waitrose, Intel, Procter & Gamble. www.kitcattnohrdigitas.com
TH_NK
Founded 2004. Privately owned. Chief executive Tarek Nseir. 50% design/build, 20% consultancy,10% e-commerce, 10% mobile, 5% iTV, 3% search, 2% eCRM. Clients include Pottermore, Channe 4, Nando's. www.think.eu
Reading Room
Founded 1996. Privately owned. Chief executive Margaret Manning. 30% consultancy, 30% design/build, 15% e-commerce,15% social, 10% mobile. Clients include Barclays, Skoda, London Business School. www.readingroom.com
Leo Burnett
Founded 1967. Subsidiary Publicis Groupe. Chief executive Paul Lawson. 22% design/build, 22% social, 15% consultancy, 15% ads, 7% mobile, 5% e-commerce 5% email, 5% viral, 2% eCRM, 2% media. Clients include Procter & Gamble, BBC, Renault
Tangent Snowball
Founded 2003. Publicly quoted. Managing director Damien Bentley. 20% consultancy, 20% other, 15% e-commerce, 13% eCRM, 10% design/build, 10% email, 5% mobile, 3% search , 2% ads, 2% social. Clients include Carlsberg, Tata, SAP. www.tangentsnowball.com
Rufus Leonard
Founded 1989. Privately owned. Managing director Will Rowe. 30% design/build, 20% e-commerce, 15% consultancy,10% ads, 10% mobile,5% eCRM, 5% email, 5% mobile . Clients include British Gas, Williams F1, Lloyds Banking Group. www.rufusleonard.com
Billington Cartmell
Founded 1990. Publicly quoted. Group managing director Jason Nicholas. 15% ads, 15% design/build, 15% social, 10% consultancy, 10% email, 10% iTV, 5% e-commerce, 5% eCRM, 5% mobile, 5% affiliate, 5% viral. Clients include GSK, Ella's Kitchen, Unilever. www.bcl.co.uk
Karmarama
Founded 1998. Subsidiary Karma Communications Group. Managing partner Dan Thwaites. No breakdown provided. Clients include BT, Sony, Honda. www.karmarama.com
StartJG
Founded 1996. Joint managing directors Jennifer McAleer, Kevin Gill. 40% consultancy, 20% other, 10% design/build, 10% iTV, 10% social, 5% ads, 5% mobile. Clients include adidas, Barclays, Marks & Spencer. www.startjg.com
ais
Founded 1998. Subsidiary Havas. Founding partner Steve Stretton. 30% eCRM, 25% social, 20% design/build, 10% consultancy, 6% email, 5% mobile, 4% ads. Clients include Vodafone, EDF Energy, Skoda. www.aislondon.com
Big
Founded 1996. Subsidiary The Mission Marketing Group. Chief executive Dylan Bogg. No breakdown available. Clients include JCB, Pirelli, Beverge Brands.
LIDA
Founded 2000. Subsidiary M&C Saatchi. Chairman Matthew Heath 25% eCRM, 16% design/build, 15% email, 14% mobile, 10% ads, 10% consultancy, 10% social. Clients include o2, Boots, Ikea.
Zone
Founded 2000. Privately owned. Chief executive James Freedman. 40% social, 25% design/build, 10% consultancy, 5% ads, 5% e-commerce, 5% email, 5% search, 5% social. Clients include Tesco, BT, Coca-Cola. www.thisiszone.com
We are Social
Founded 2008. Privately owned. Managing partner Jim Coleman. 100% social. Clients include adidas, Heinz, Heineken. www.wearesocial.net
Poke
Founded 2001. Subsidiary Mother. Managing Partners Nick Farnhill, Peter Beech. 25% design/build, 25% e-commerce, 20% ads, 20% social, 5% consultancy, 5%mobile. Clients include Everything Everywhere, Aurum Group, Mulberry. www.pokelondon.com
The Group
Founded 1991. Privately owned. Managing director Cathal Smyth. 95% design/build, 5% consultancy. Clients include Centrica, Tesco, Tullow Oil. www.the-group.net.
Work Club Group
Founded 2007. Privately owned. Chief executive Martin Brooks. 25% social, 23% consultancy, 22% design/build, 10% email, 10% mobile, 10% other. Clients include Sharp, BBC, Pernod Ricard. www.work-club.com
Holler
Founded 2001. Subsidiary Publicis Groupe. Managing partners James Kirkham, Simon Hankin, Will Pyne. 70% social, 10% mobile, 5% consultancy, 5% design/build, 5% other, 5% viral. Clients include Mercedes-Benz, Red Bull, Innocent. www.holler.co.uk
Agency Republic
Founded 2001. Subsidiary Omnicom. Managing director Matt Kwiecinski. 45% ads, 25% design/build, 10% eCRM, 10% mobile, 5% consultancy, 5% mobile. Clients include Vodafone, Beiersdorf, PepsiCo. www.agencyrepublic.com
Outside Line
Founded 2001. Privately owned. Founder Ant Cauchi. 53% social, 30% design/build, 12% other, 5% consultancy. Clients include InBev, Arla Foods, British Gas. www.outsideline.co.uk
Weapon7
Founded 2001. Subsidiary DAS Europe. Chief executive Adam Graham. 26% ads, 15% social, 11% other, 10% design/build,10% viral, 8% mobile, 7% eCRM, 6% email, 5% e-commerce, 2% iTV. Clients include Mercedes Benz UK, Smart, DHL. www.weapon7.com
Freestyle Interactive
Founded 1996. Privately owned. Managing director Suzanne Linton. 28% design/build, 15% other,12% consultancy, 12% social, 7% e-commerce, 6% ads, 6% mobile, 6% search, 4% eCRM, 2% affiliate, 2% mobile. Clients include Amtico, Alstom, Arriva Buses. www.freestyleinteractive.co.uk/www.freestyleinteractive.co.uk
Code Computer Love
Founded 1999. Privately owned. Chief executive Tony Foggett. 36% design/build, 13% mobile, 10% consultancy, 10% e-commerce, 5% ads, 5% email, 5% media, 5% search, 5% social, 4% eCRM, 2% affiliate. Clients include Oxfam, First Group, NUS. www.codecomputerlove.com
Haygarth
Founded 1984. Privately owned. Managing director Marcus Sandwith. 24% design/build, 24% eCRM,17% social, 15% consultancy, 5% ads, 5% email, 5% mobile, 5% search. Clients include Disney, Heinz, Procter & Gamble. www.haygarth.co.uk
Brave
Founded 1998. Privately owned. Managing director Ash Bendelow. 15% ads, 15% design/build, 15% eCRM, 10% consultancy, 10% email 10% iTV, 5% affliate, 5% e-commerce, 5% mobile, 5% viral,. Clients include Panasonic, John Frieda, Ecover. www.brave.co.uk
Table 19
Founded 2008. Privately owned. Managing director Matt Broekhuizen. 40% consultancy, 25% eCRM, 10% design/build, 10% mobile, 5% email, 5% social, 5% viral. Clients include Research in Motion, The Carphone Warehouse, BSkyB. www.table19.co.uk
Collective
Founded 2003. Privately owned. Chief executive Nick Constantinou. 40% design/build, 15% consultancy, 15% mobile, 15% social, 5% e-commerce, 5% eCRM, 5% viral. Clients include Honda, Electronic Arts, BBC. www. Collectivelondon.com
Ogilvy Action
Founded 2007 .Subsidiary WPP. Managing director Richard Woodward. 40% design/build, 30% consultancy, 10% ads, 10% e-commerce, 5% social, 2% mobile, 1% eCRM, 1% email, 1% viral. Clients include SC Johnson, Philips, Qualcomm. www.ogilvyaction.com
Gravytrain
Founded 1999. Privately owned. Chief executive Kevin Taylor. 50% search, 20% e-commerce, 10% consultancy, 10% social, 5% affiliate, 5% email. Clients include Cycle Stuff Direct, Just Landlords, Quotesearcher. www.gravytrain.co.uk
Underwired
Founded 1996. Privately owned. Managing director Felix Velarde. 80% eCRM, 20% design/build. Clients include Sony, Asics, Harveys Furniture. www.underwired.com
Chameleon
Founded 1998. Privately owned. Managing director Vicky Reeves. 29% design/build, 20% e-commerce, 18% other, 10% ads, 10% consultancy, 8% search, 5% social. Clients include Unicef UK, Breakthrough Breast Cancer, Great Ormond Street Hospital. www.chameleon.eu
M&C Saatchi Sport & Entertainment
Founded 1997. Subsidiary M&C Saatchi. Managing director Jamie Wynne-Morgan. 50% social, 50% viral. Clients include Castrol, Natwest, Reebok. http://sportandentertainment.mcsaatchi.com/
Methodology
Information was collated by Marketing by sending a survey to each
agency. The respondents have been ranked according to their 2011
turnover. For agencies affected by the US Sarbanes-Oxley Act, which
restricts the amount of information firms are allowed to make public, we
are unable to publish figures.
Marketing takes care to publish accurate company data, but cannot be
held responsible for any errors or omissions in the leagues.