Best of the Net: Interactive Agencies


It was a year when being big actually meant being better. For most of the nascent history of online advertising, small boutique startups could stand toe-to-toe with the big boys on the media playing field and get their share of the media dollars. But in 2002 the momentum shifted in favor of the established shops. This is reflected in both the winners of MEDIA Magazine’s 2nd Annual Gold, Silver, and Bronze “e” Awards, and the make up of our exclusive top 50 interactive ad agency rankings.

The big interactive agencies started to wrestle control of the online advertising business away from the smaller shops for a couple of reasons. First, with 2002 ad spending just about equal to 2001's dismal levels, advertisers, particularly the big brands, were still reluctant to jump into the online waters. When brands did dabble with online advertising it was mainly with “proven” interactive agencies or with agencies that could develop integrated cross-media campaigns — something the bigger shops do well.

Second, the big shops, many rooted in traditional media, started to understand the Internet's vast potential. Jim Meskauskas, who wrote the profiles of the Gold and Silver “e” winners, put it best:

“While the young princes then working in online advertising were speaking of the demise of their forebears, some of those 'lumbering dinosaurs' were on a quest to evolve so that evolution wouldn't get the best of them.” Third, this evolution was sped by a series of major agency consolidations that left fewer smaller-sized interactive players around compared to last year. These changes can be seen in our Top 50 rankings where many familiar names are gone and the biggest agencies on the list have grown bigger. Some of the significant M&As in 2002 include OMD now buying all the online media for Tribal DDB, @tmosphere, and TBWA\Chiat\Day, Carat buying upstart Lot21, Beyond Interactive finally absorbing Grey E Media and MediaCom Digital into the fold, and Avenue A acquiring I-Frontier, to name a few.

So with this preamble, it is only fitting that the Gold “e” winner for 2002 be Starcom IP, the interactive arm of multi-billion dollar traditional media buyer Starcom/MediaVest. The Silver “e” goes to OgilvyInteractive, last year's Gold Award winner and again the agency that heads this year's top 50 ranking. Finally, four Bronze “e” Awards were given to recognize outstanding achievement in four distinct areas of online media: Avenue A for Planning, Beyond Interactive for Integration, iDeutsch for Innovation, and Modem Media for Strategy. Congratulations to all the winners. — by Adam Herman

Gold “e” Winner: Starcom IP

There was a quote in Revolution magazine a few years ago that went, “Data, data everywhere; can someone help me think?” I use this line whenever I talk about what agencies need to focus on in the new era of data-driven marketing.

One of the main things that online media has brought to the marketing party is a level of accountability and discernment of cause and effect that was not available to marketers before. The point of the quote is that anyone can generate data. Anyone can run campaigns and push buttons to produce it. But not very many organizations know how to turn data into information that is meaningful and useful to the marketer. It should be the job of an advertiser’s marketing partner — namely the agency — to do this.

Rishad Tobaccowala, CEO of Starcom IP, was the person quoted in that article. And it is this perspective that has in large part helped Starcom IP win this year’s Gold “e” Award for agency of the year.

Starcom IP is the independent operating unit of Starcom MediaVest Group, which, all told, has approximately $16.8 billion in media billings. Starcom IP is headquartered in Chicago, with offices in San Francisco, London, and São Paulo. It can also claim more than $75 million in online media and digital marketing spending, making it one of the top ten interactive agencies in the business. Of course, billings alone are not the sign of a great shop. Innovation, professionalism, intelligence, and creativity are all qualities that contribute to a shop’s rising above the good to be among the great.

“Starcom trains its people consistently, executing well and leveraging cross-client lessons learned ensuring best practices for their entire list,” effuses Chris Theodoros, director of worldwide agency relationships at “[Their] strong leadership and bench strength definitely mirror their professionalism and unwavering commitment to the medium. A jewel in the Publicis crown.”

“The integration between media innovations in the digital marketing arena and traditional media thinking has always been important in maintaining the company’s excellence,” says Jeff Marshall, VP, director of operations at Starcom IP. Marshall currently oversees the Insights & Analytics group, manages the trafficking group, and spearheads business development and external partnership relations.

Integration is touted by many agencies that have worked in the digital arena, but few have the kind of access to clients and the history of their brands’ stewardship The agency’s clients are a who’s who of stalwart general market advertisers: Miller Brewing, Kellogg, U.S. Army, Nintendo, Polaroid, McDonald’s, Lego, Showtime, EarthLink, Western Union, Allstate, Hallmark, and Toys R Us, to name a few.

How does Starcom IP get its clients to consider online as part of the marketing mix, then? “It’s actually very simple,” says Tobaccowala. “What we do is combine three different things. First, it is important to very clearly understand what the client’s objectives are. Second, it is important to bring to them their particular target audience, which we define differently than demographics. For example, in the instance of the U.S. Army, who are they looking for? If they are certain kinds of people, how do these people incorporate the digital media into their lives? Finally, we merge client objective and consumer behavior. Not ‘general consumer behavior,’ but based on real target behaviors. We actually give them ideas. Look at what you can do based on objective and consumer behavior,” Tobaccowala says.

Passion Group Marketing is one of the innovations that Starcom IP has developed using its intimate understanding of the powers of interactive media. A Passion Group is a segment of people linked together by an enthusiasm for certain interests or hobbies they have in common, regardless of demographics, lifestyles, or any other trait.

Starcom IP’s Insights & Analytics practice has led the agency in developing new ways of determining accountability and looking at how to market to a more cynical and fragmented population. With highly measurable media and the growing power of databases, Starcom IP is able to make closer connections between advertising events and the actions they induce.

Starcom IP has not gone without challenges, of course. In 2002, it had to contend with maintaining revenue generation and profitability in the face of an online and ad industry recession, just like everyone else. And being part of a public company, it is beholden to stockholders as much as it is to its clients.

But in 2002, Starcom IP also had stunning success, adding 10 new clients, including Earthlink, Macromedia, Lego, Polaroid, Allstate, and Toys R Us.

The company has also given birth to the “TV 2.0” practice. This generation of television is beyond just interactive TV, and includes PVR, video-on-demand, and other forms of convergence broadcast. “It will address the next generation of television,” Tobaccowala says. “The front end of it is very much like traditional broadcast, but the back end is very much like online.”

Tobaccowala believes the biggest impact to Starcom IP in handling 21st-century marketing will be the mainstreaming of online media. “Four years ago when we started Starcom IP, there were only a handful of agencies that specialized in online media. We were odd in that we said we were going to do a specialist unit associated with a large traditional agency. We are going to have dedicated people who are expert but are going to sit inside a major media company. If this is really going to be big, you have to be able to tap where all the money is, so therefore, you have to sit where all the other media are.”

What this will eventually mean is that the 65 full-time dedicated staffers now working in the IP unit will be reduced to zero. Not because they will no longer be working with online, but because they will be running media like television and radio the same way they do online. “The media should be so mainstream, at some stage, the people need to be making recommendations about other media. The purpose is mainstreaming the organization,” Tobaccowala says.“

For his part, Marshall says, “It is imperative for the interactive medium to continue to innovate in the following key areas: media integration, idea generation, and execution efficiency.”

Starcom IP, as Agency of the Year, has proven it is already doing just that. Congratulations, Starcom IP. — by Jim Meskauskas

Silver “e” Winner: OgilvyInteractive

Yup, they did it again. OgilvyInteractive is once more being recognized for being one of the best agencies in the industry, plying its trade in the interactive marketing space with the same degree of creativity and professionalism that it has been showing in general market media for decades.

Last year OgilvyInteractive was awarded MEDIA Magazine’s First Annual Agency of the Year Gold “e” Award. And giving it the silver this year is in no way a reflection that OgilvyInteractive has slipped. Quite the contrary — when asked, folks working in the interactive advertising space all lauded OgilvyInteractive for being one of the best agencies that they have either ever done business with or competed against.

“They are tough but fair. They are smart, do a great job for their clients, and really try to live up to their word,” comments Jim Spanfeller, CEO of, who has worked with OgilvyInteractive.

Not only is it once again considered one of the best agencies in the space by its peers, but just take a look at its clients — Ameritrade, IBM, Unilever, SAP, and ONDCP, to name a few.

But prestigious clients aren’t what make OgilvyInteractive one of the greats in the industry; it’s the kind of work the agency does for those clients that counts.

OgilvyInteractive has employed the kind of innovative media planning and placement strategies that most of us in the industry just talk about. Day-parting and surround sessions are part of OgilvyInteractive’s de rigueur strategies to best utilize the interactive medium. Getting clients to see the benefits of online marketing beyond the way it can elicit impulse response and using it also as a branding medium is something the people at OgilvyInteractive believe is core to its mission.

“We have had some phenomenal successes,” says Stuart Bogaty, senior partner, integrated media director of OgilvyOne World Wide. “In the past year we have conducted several awareness studies that significantly helped to solidify the importance and value of interactive media in affecting awareness measures like recall, consideration, and purchase intent.”

Innovative strategies, intelligence gathering, and compelling data both contribute to OgilvyInteractive’s success at getting its general market advertisers to utilize the Internet as a marketing tool.

“Depending on the objectives of the client — i.e., brand awareness, demand generation, or a hybrid of the two — we have an enormous amount of proof in case studies of our work that shows how the Web can build brands, deliver ROI, or the combination of the two,” says Nasreen Madhany, global media director of OgilvyOne World Wide.

“We also have proprietary tools that help clients plan and measure the results specifically,” she adds. “In the planning area we have an integrated online/offline budget-setting tool and Web reach/frequency tool. In the measurement area we have a tool that captures the branding impact of the Web and a creative and media optimization tool.”

Integration continues to be important to OgilvyInteractive, as it should be to everyone who wants to provide advertising and marketing services in the 21st century. “The biggest distinction between us and some of the interactive agencies is how OgilvyInteractive is integrated with everything else we do. Not only with OgilvyOne, but the rest of the divisions within Ogilvy,” says Madhany.

Of course, no one assumes that providing integrated products and services is easy, especially when clients are still suspicious of the role online should play in the media and marketing mix. “Our greatest challenge continues to be making the case for Internet to become a larger part of our clients’ media mixes,” says Bogaty.

This is something every agency working in the space today must face. Getting clients to understand, quantify, and qualify the value of interactive media as part of their comprehensive communications packages is arguably this industry’s greatest challenge. But that isn’t going to deter OgilvyInteractive. “We are looking forward to the growth of the usage of reach and frequencies to substantiate the medium,” offers Bogaty hopefully.

But if that were all there is to online advertising and the demonstration of its value, we would be in the home stretch. It is OgilvyInteractive team’s intelligent, holistic understanding of advertising and marketing that won’t let it sit on its laurels. They look beyond just the trade headlines to understand what needs to be featured about the medium to realize the powers and promises of online marketing.

“We are also much attuned to the fact that we can’t, as an industry, move toward accepting R/Fs as the be-all, end-all,” says Bogaty.

“Our focus for 2003 will center around several areas,” says Madhany. “Clients remain unimpressed with a promise of ROI on the Web. We will focus on continuing to extract value from the Web and proving its worth.Emerging channels, broadband, and wireless will take on much bigger focus in testing and developing strategy,” Madhany says.

OgilvyInteractive seeks to make the Internet more organic in its consideration and application. “We are hoping to see more media-consumption-habits studies and usage studies done by agencies against their clients’ target audiences,” says Bogaty.

“Then, rather than make the case for more Internet dollars based on Internet-only awareness metrics, we can be making the case for how and where each individual target should be reached based on consumption habits.”

The Internet as a medium must be understood as part of a whole and not something in itself. It is a medium, and by definition, a medium is a substance regarded as the means of transmission of a force or effect. This is only possible if it has a place or context.

“It is very important that we all clearly recognize this and make sure that we take a large step back and address the Internet as a part of the overall media mix as opposed to on its own or in a vacuum,” say Bogaty.

Well, good work doesn’t happen in a vacuum, either. If it did, there would be no recognition for it. Congratulations, OgilvyInteractive. — by Jim Meskauskas

Bronze “e” Winner - Planning: Avenue A

Creative artists and IT wizards may still get more attention, but as far as this year’s Bronze “e” Planning Award winner is concerned, the day of the media planner has come.

“Online media makes the role of the planner greater than ever before,” explains Jeff Lanctot, media director at Avenue A. “With so many more options about where to bring the message online and how to make reach/frequency models work, placement is becoming ever more crucial.”

Making marketing work online requires the kind of trust with agency planners that gives clients and publishers the confidence to take chances, observes Maggie Boyer, Avenue A’s VP of media. Boyer attributes Avenue A’s repeat “e” Award win this year to the agency’s refusal to be satisfied with just reiterating successful media planning formulas. “What’s most exciting and at the same time most challenging about this medium,” she says, “is that there are no ironclad rules yet. We can learn from both our successes and mistakes, but to stay ahead we have to rewrite the playbook each time out.”

Boyer cites two media planning highlights of 2002 she believes pushed the envelope of what’s possible in an online campaign.

“With AT&T At Work we applied concepts that have worked offline and successfully translated them into an online campaign for the first time,” she explains. “Working with five major sites, we applied a three-phase approach, starting with intensive, heavy, high-impact-visibility ads, followed by a period of less frequent reminder ads and more specific direct targeting, which led up to a final blitz with heavy reiteration of our core message. This kind of three-phase campaign requires a sustained, disciplined follow-through seldom seen online. It requires a true meeting of the minds, a united front between agency, client, and publishers.”

The agency’s celebrated MSN8 launch campaign also took a number of unconventional planning risks, among them the first ever home page takeover of the New York Times online and first ever use of animated flash on and

“Most agencies would have played it a lot safer,” says Boyer. “But our planners, particularly Alison Hyder, who coordinated the AT&T Wireless campaign, and Tricia Lasky, who planned the MSN launch campaign, deserve a lot of credit. They were out on the edge all the time.”

Looking ahead to 2003, the agency continues to work hard to forge new agnostic ways of measuring optimal relationships of reach and frequency online, according to Boyer. “The Web audience,” she says, “is an extremely diffuse, fast-moving target. We as an industry need to find ways of locating the 80% of people who only see an ad once, and upping frequency.”

Another challenge facing Avenue A will be to seamlessly integrate recently acquired i-Frontier into the agency fold. — by Phil Leggiere

Bronze “e” Winner - Integration: Beyond Interactive

For Harvey Goldhersz, CEO of Beyond Interactive, this year’s Bronze “e” Integration Award winner, industry leadership grows from staying well ahead of the pack in the analytic capabilities that turn buzzwords like “synergy” and “holistic perspective” into reality for clients.

“We’re the only agency with the systematic tools to actually measure offline media’s effect on online results,” Goldhersz explains, referring to Media Compass, one of Beyond’s proprietary tools. Media Compass employs econometric modeling to analyze how broadcast or other offline campaigns relate to online metrics, be they traffic, sales, or other chosen variables.

“For other agencies lacking the knowledge base we’ve developed,” Goldhersz continues, “online and offline remain apples and oranges. For us they can be analyzed as one continuum.”

Armed with this information, clients are better able to allocate and, as necessary, reallocate their media mix by seeing which TV ads drove online metrics, for example. Another best-in-class proprietary technology, Lifeline, provides clients with historical and current targeting and rate data on over 3,500 digital media sites. In 2002 these technologies were leveraged in two breakthrough integrated campaigns, for M&M’s and Cendant Travel.

The M&M campaign featured memorably lovable personified M&M candy characters, such as Red with the big head, Crispy, and Cool Blue, each stating their case in TV spots as to why they were the most popular M&M color. In addition to including the TV videos, the online component of the campaign invited consumers to a “Vote for Your Favorite Color” contest, play interactive games and visit the characters’ own Web pages.

“People were excited about the M&M color ads because they were so much fun,” observes Goldhersz, “which they were. But what really was pioneering in the campaign was the fact that Beyond was able to capture information from visitors and voters online to track both the relative success of TV spots and online and offline consumer buying behavior.”

Beyond also launched the campaign for Cendant’s family of travel brands, which includes, Avis, Travelodge Hotels, and Howard Johnson’s. “The campaign was really ambitious, since it involved so many different brands and cross-promotional possibilities,” says Goldhersz. “For us it marked the realization of a holistic approach.”

As part of the campaign, TV and online travel promotion ads from various Cendant brands drove consumers to the website, where they could sign up for hundreds of discount packages — flight and hotel, flight and rental car, flight and shopping — based on personal preferences. Based on information generated online, Beyond was able to customize direct promotions of multi-branded offers, seamlessly moving from brand ads to direct sales.

Goldhersz reflects, “Our goal is to lead the way into an era of what can for the first time truly be called platform-agnostic advertising, in which all the important data from each ad medium can be easily aggregated on one platform and analyzed as a whole.” — by Phil Leggiere

Bronze “e” Winner - Innovation: iDeutsch

Online innovation, explains Fred Rubin, director of iDeutsch’s New York office and an agency partner, needs to combine right-brain intuition and left-brain logic.

“People too often think of creativity and practicality as two different things,” he says. “But for us innovation is not just a matter of artistic creativity — though of course that’s part of it — but also about coming up with new ways to solve clients’ problems.”

iDeutsch, winner of this year’s Bronze “e” Innovation Award, is a component of the $1.5 billion Deutsch agency, a part of Interpublic. As Rubin describes it, “iDeutsch didn’t just begin with Donny Deutsch waking up one day and deciding online advertising might be an interesting thing to try. It grew out of our existing clients’ needs. They came to us and we’ve managed to keep that sustained focus. Because of that we can get to know a client’s needs and goals intimately.”

As evidence of how intimate client relationships give iDeutsch its innovative edge over competitors, Rubin offers the agency’s online Snapple campaign, an example of creative problem-solving developed in response to the soft-drink vendor’s need to aggressively position itself against the “big boys” of the 18-24 market despite a limited budget.

“Deutsch had worked with Snapple to develop an effective TV promo with personified bottles, each with its own personality, but Snapple’s budget made it a major challenge to get the kind of exposure and marketing synergy Coke or Pepsi could afford,” recalls Rubin. “But we saw a way to expand that campaign and take it to a new level by leveraging a deal with Viacom to promote the Snapple brand across all of their online/offline properties, gaining powerful synergy at an affordable price.”

For the online portion, iDeutsch took the personified bottles of the TV ad and created a “What’s Your Story” promotion, inviting consumers to enter a contest by creating their own story using the Snapple bottles as characters. At the ad mini-site, participants could pull bottles through an imaginary city, making up a story at each stop. The site drew well over a hundred thousand visitors, with about 10% of visitors entering the contest and even non-entrants visiting multiple times to keep up with the stories.

“Websites and online ads are still often seen as being about the technology,” says Ingrid Bernstein, iDeutsch New York’s SVP and creative director. “But innovation online is really about the delivery of brand experience. As examples, Bernstein cites campaigns for Revlon’s High Dimension and Almay Beauty.

The agency developed a Revlon ad site for High Dimension hair, which included a color-choice chart and shade calculator, enabling visitors to preview results of a dye job ahead of time. A revamped website and campaign for Almay translates the basic brand message “The Pure Source of the Beautiful” into a valuable interactive experience that provides consumers with answers to their specific beauty questions from experts. — by Phil Leggiere

Bronze “e” Winner - Strategy: Modem Media

Modem Media, this year’s Bronze “e” Strategy Award winner, founded 15 years ago, justly calls itself the world’s first interactive agency. With offices in Stamford, San Francisco, London, and São Paulo, Modem Media can boast of many industry firsts, including the first email marketing campaign, constructing the first commercial website (for Coors’ Zima Beer in 1993), the first Internet ad (the following year), and the Web’s first rich media ad, back in 1996.

While all that makes for fascinating history, the company is most proud of its current place at the cutting edge of online strategy development and implementation, according to Modem’s vice-president and director of media, Sharon Katz.

“What sets our strategic practice apart,” explains Katz, “is that when we develop strategy with a client, we focus first and foremost on how their online advertising can and must be a value exchange between an advertiser and its customers.”

Whereas most of its competitors still view online consumers as a passive “target” to be reached with a message, Modem Media “flips that premise on its head,” says Katz.

“We really base all our strategy on making the consumer’s experience of interacting with ads worthwhile on a practical level, giving them something in return for their time,” says Katz. “People don’t watch the Internet, they use it. So you can’t just tell them who you are or what you can do for them. You need to show them with a hands-on benefit they can make use of.”

Putting this philosophy into practice, Modem this year successfully implemented its value-exchange ad strategy for Hewlett-Packard by offering ad viewers a “CIO Briefcase” service that allowed consumers to get customized real-time daily IT news feed by areas of interest.

In partnership with Kraft, Modem made value exchange the centerpiece of its advertising strategy by offering consumers online tips and access to recipes and information to help plan home menus and diets.

Modem’s celebrated “Hate Lines?” campaign for Delta Airlines was a dramatic example of how online advertising could move from a mere discussion of brand benefits to an actual demonstration. Not content with touting the airline’s efficiency in customer service and minimizing waiting times, Modem’s campaign provided online visitors with tools to actually save time, showing them how to print out an online boarding pass from a slot in the top banner. Another banner feature allows users to get real-time information about security-line waits at airports. Another element was the targeted online placements to promote high-traffic cities NY and Atlanta.

Looking ahead, Katz sees the biggest strategic challenge of 2003 as being the creation of new models to better measure the success of integrated campaigns.”One critical issue that will be taking up plenty of brainpower this coming year will be how to tie online-generated information to subsequent offline buying behavior,” says Katz. “We see that as key to moving things to the next level.” — by Phil Leggiere

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