First Published: Mass High Tech: The Journal of New England Technology – September 12, 2008.
It’s been busy at the Boston offices of Digitas Inc. over the last few years. Apart from being acquired and being named as one of Advertising Age’s Digital A-List winners this year, their parent, Publicis Groupe SA, recently promoted Laura Lang to Digitas worldwide CEO over the summer.
When Publicis Groupe swallowed up Digitas in January 2007 for $1.3 billion, it gave the digital agency the opportunity to win bigger accounts, but it also sent the message that digital agencies are no longer the redheaded stepchildren of marketing. The acquisition also reinforced a trend for agencies and clients alike – offline consumers are deeply influenced by what they read online.
As the web influences more offline buying decisions, digital agencies are becoming critical strategic members of the marketing landscape. Digitas’ CEO, Lang is quoted in Ad Age as saying that “We are thinking like a full-service marketing partner.” It’s probably not a moment too soon.
Jupiter Research, recently acquired by Forrester Research, predicts that the Internet will influence approximately $1 trillion in offline consumer spending in the next five years. This online-offline connection is a significant trend that marketers and brands are only now starting to recognize in material ways.
The web is the primary research tool for consumers who ultimately do their shopping offline. In May this year the Nielsen Media Research, found that 80 percent of shoppers studied had bought from stores whose websites they had visited first. This confirms data from a study in 2006 by BigResearch suggesting that 89 percent of consumers who made in-store purchases conducted some online research before going into the store.
So why have ad agencies taken so long to make this connection? Google Inc.’s direct-to-advertising success has been partly to blame. Google’s ability to cut out agencies and deal directly with advertising clients has created confusion and has made it difficult for ad agencies to know what to do with the online-offline causality. Making it so easy for advertisers to reach audiences online without having to consult agencies has caused a deep rift between the advertising world and Google. Over the last year or so, Google has been making a committed effort at kissing and making up.
Google has created several guerrilla-style marketing teams to woo back the agencies and convince them that they should include Google in all their client campaigns. More important than their fresh-faced college grads to flatter ad agency heads is Google’s deal with Publicis Groupe to collaborate on creative projects and train employees. This is the kind of relationship ad agencies have shared with media houses for decades. Now that Google is playing in the world of radio and social media advertising, it will have to play nice and do it the old-fashioned way.
It’s easy to dismiss Google’s advances as self-serving, but there’s more to this lover’s quarrel than meets the eye. Online advertising is the fastest growing category in marketing budgets and declines in TV and newspaper readership are fueling that flame. To any industry insider, it’s clear that almost all ad agencies need a serious lesson in online marketing, and working with a powerhouse such as Google can only benefit strategic and media buying decisions.
Apart from adding a few URLs to their traditional campaigns, brands have been conspicuously slow in adopting real online-marketing opportunities. Tracking technology and advanced analytics make digital agencies far more prepared to deliver results than traditional agencies can do on their own. In the fast-changing social media landscape traditional media and advertising companies can no longer sit on the sidelines or leave online campaigns as an afterthought.
Web-based marketing is far from perfect. Tracking and analytics tools offer much more raw data than they provide insight. Finding the blend between trend setting branding and real-time action tracking is still a much sought after Holy Grail. However, some brands are starting to make the connection between online researching and offline buying behavior.
As I head off to the annual Aberdeen CMO Conference this week I’ll be sure to watch out for the Google cheerleaders, the digital agency geeks and the big brand suits. It’s bound to make for an interesting after party.