The merging of consumer advertising agencies and high technology companies is picking up speed thanks to clients with increasingly complex needs, according to experts.
”I think an interactive division is going to be as intrinsic to an agency structure as an art department is today,” said Michael Trainor, whose 12-person Providence marketing and communications firm is embarking on its first electronic commerce project.
In creating a Web site for one of its health-care clients, Trainor Associates is teaming up with a couple of technology companies. Together, the companies have the creative and programming abilities needed, Trainor said.
Merrill Clark Inc. rents space in Trainor’s Davol Square offices and New Media Advantage is a Trainor subsidiary that became independent last year, according to John Woodhouse, a spokesperson for Trainor. The relationship makes more sense than an all-out merger, Trainor said.
”The amount of business that’s driving the interactive market for small- or medium-size agencies in a market like Providence isn’t there,” Trainor said. “As size picks up, I think there will be acquisitions of companies.”
Providence’s Duffy & Shanley agency last summer made a small-scale acquisition when it joined forces with start-up kWeb interactive! Founder Kira Greene now heads duffyshanleyinteractive, the agency’s new media arm.
Today, Greene finds herself adding in-house staff every few weeks and forging partnerships with freelancers who can fulfill what she called her client’s “back end” needs. An example is a database dsi created for Software AG Americas of Reston, Va., or SAGA. Employees and vendors with a password can enter the “SAGA Art Library” site to retrieve logos or photographs used in direct mailing, presentations, and other things.
Unlike the consumer site dsi also created for SAGA, the library is an “internal management tool,” Greene said.
With more and more clients desiring one-stop marketing, it makes sense for traditional agencies with or without interactive divisions to form partnerships with technology companies, Greene said.
“A McDonald’s shouldn’t become a Kentucky Fried Chicken,” Greene said. “But for customers who don’t eat red meat, it should be able to offer chicken even though that’s not the specialty.”
“I think everyone’s doing it differently,” Greene said. “the only ones who are missing the boat are the ad agencies who hear e-commerce or database and walk away.”
Offering Web site design but no programming is like “building a house and putting the walls up, but not painting it.”
As for dsi, “I see us forming more technology partnerships and just continuing to develop the resources on the back end,” Greene said.
Only the largest of ad agencies are buying technology companies, said Christopher Dever, a senior media relations specialist for Chicago-based Corporate Technology Communications, whose client Leo Burnett Technology Group recently acquired a tech shop.
“If you have a bigger agency, you have more of the clients who are demanding it,” Dever said. For smaller agencies, “tech firms cost too much money.”
That said, there are some mid- to large-size agencies that “feel why don’t we hire five ‘lone rangers’ rather than buying out the firm?” Dever said. “They’re a lot cheaper and, because they’re lone rangers, they’ll probably work harder.”
Trainor summed up the industry at this time.
“You’re going to see different models and different solutions,” he said. “But I think everyone’s heading in the same direction.”
