• by Catharine P. Taylor , January 2, 2009

The indie darling blew up after signing with a major label

It's been a little more than two years since Publicis said it would buy Digitas for $1.3 billion, and it seems fair, even now, to wonder whether the vibrant independent digital organ that was Digitas could have been rejected by patient Publicis, the big holding company that at the time had arguably the smallest digital footprint of its competitors.

Even through the dot-com downturn, Digitas was usually considered in a class by itself because of its direct-response heritage, its firm belief in strong analytics and a client roster that any agency would envy. It was a shop filled with gearheads who talked about CRM tools with the same passion traditional agencies talked about Cannes Lions.

But in the early 2000s, the agency, which began life as the direct marketing agency Bronner Slosberg Humphrey, was different in another way, as well: While many other digital agencies got scooped up by major agency holding companies, it held on as a small, public company, which, at the time of the Publicis acquisition, meant it had only four U.S. offices and no global footprint. Despite its strengths, the shop's future looked limited. "Our belief was that we needed to be in media at scale and that we needed to be global," says David Kenny, the former Digitas CEO who now, along with Jack Klues, serves as comanaging director of Publicis's VivaKi, a unit formed this year with the mission of bringing scale not only to Digitas, but to all of Publicis's digital assets.

Yes, the idea of being acquired by Publicis looked great on paper. Now, two years in, it's safe to say, as Digitas CEO Laura Lang says, "It was really the right thing to do." Because the shop had a transformational year in its own right and simultaneously helped the fortunes of the much larger holding company it is now part of, it is OMMA's 2008 Agency of the Year.

No AOY story is complete without stats, and here are some noteworthy ones: With 25 new clients in the United States (including nine at its Digitas Health unit) and more than 10 new ones in its expanding overseas markets, the company saw 100 percent new business growth year-on-year. New clients include Crest toothpaste from Procter & Gamble, AstraZeneca's Crestor and Pulmicort, and AOL; it also expanded its relationship with Mars Snackfood's Starburst brand. Starting as the brand's online media planning shop, it took on digital strategy and creative duties this year. The media team, under executive vice president and global media director Carl Fremont, doubled.

Maybe all of this is to be expected from a company that suddenly goes from being a digital agency with a handful of offices to one with the resources of a huge communications conglomerate at its disposal, resources that helped it move this year into far-flung locales such as Brazil, Sweden and Singapore. "They opened the checkbook," admits Lang, a long-time Digitas exec who was promoted to the top post this year. (Even Digitas is not entirely immune to the dismal economic climate, though: Due to reductions in client spending, it cut 2 percent of its U.S. workforce in mid-December.)

In 2008, Digitas did more than grow. For one, it became more creative, as evidenced by edgy, outlandish campaigns such as the "Share Something Juicy" effort for Starburst. Clients still come to Digitas because of its analytics and CRM capabilities, but today, the shop is becoming stronger at producing media-influenced creative; messages that live within their audiences' milieu, rather than, as Lang puts it, delivered "to consumers in the cracks between the content they were consuming."

"Share Something Juicy" is primarily consumer-generated content wrapped up in a larger campaign idea - just as Starbursts are meant to be shared, so is content, particularly the kind those in the 18-24 demo are prone to distributing. The campaign has resulted in a host of Web natives sharing something juicy, and its success in driving click-throughs, visit duration and video consumption has beaten expectations.

Digitas' Starburst work also included sponsorship of a series of animated videos called "Nite Fite," which feature two characters arguing key questions of the day - such as whether or not Rush is a heavy metal band. (Okay, maybe not exactly "key.") The series has so far resulted in more than 2.5 million YouTube views, and a healthy number of video responses. "Their strategy was not about building a Web site. It was about being out there on the Web," explains Carole Walker, vice president of integrated marketing communications, Mars Snackfood U.S. On a broader level, 2008 was the year Digitas put a stake in the ground as a producer and curator of Web content. It launched The Third Act, a brand content arm aimed at helping clients produce and distribute content in a world where old production and distribution models are being upstaged. To that end, it did something the old gearhead Digitas probably never would have: It sponsored an event called the Digital Content NewFront. A play on the old TV network upfront, it invited key thinkers in online content and even competing agencies, to discuss the role brand content plays when marketers are no longer bound by the strict production and distribution hierarchies of old media. It's all part of what Fremont describes as the shop's endeavor to answer the question: "How do we join [the consumers'] world?" The shop's mantra - "creativity drives performance" - weds its CRM heritage to its increasingly creative leanings.

Breaking out of its CRM box is only one reason Digitas earned our top honor. The other is that even if Digitas is only a small part of its holding company, it has been able to make the entire agency group stronger, not just by being owned by it, but by becoming truly a part of it. The relationship between Digitas and units such as Starcom Mediavest and VivaKi are anything but arm's length. Says Klues, "I would say there are things that are part of their culture I knew we'd value as a media business, but I just didn't know how much." He adds, admiringly, "Before getting to know Digitas, I would've given us pretty high marks."

Kenny says the close relationship between Digitas and entities such as Starcom and ZenithOptimedia was fueled by those groups' willingness to embrace Digitas. "What was a pleasant surprise was how much they were willing to change their businesses to accept Digitas," he says.

This strong sense of partnership plays out in a number of ways. One is in making Publicis's clients happier. Klues notes that having Digitas in the fold has made for a stronger partnership between Starcom and Samsung, and the shop has also done things such as push Kraft's sponsorship of Dancing with the Stars, which was originally engineered by Starcom, so that it's much more a part of all of the digital touch points for fans of the show. Klues credits the shop with "having truly activated" both Starcom and Zenith. In addition to Kraft and Samsung, Starcom and Digitas share clients including p&g and Mars; ZenithOptimedia and Digitas share clients including Delta Air Lines and Whirlpool.

Another way in which Digitas's partnerships benefit Publicis is that the shop has played a core role in redefining Publicis as a holding company steeped in digital know-how. Lang sits on the board of VivaKi, and, as the lead digital agency of the unit, it is playing a central role in developing technologies that can be used across all of Publicis's digital assets. While the goal is to co-develop platforms with major media partners ranging from Microsoft to Disney, it's not entirely beyond the realm of possibility that such platforms could also be used by competitors.

As with Digitas's other intra-holding relationships, it works both ways. Digitas has been able to leverage other Publicis digital assets, such as the mobile marketing company Phonevalley, to bring campaigns onto other platforms.
We've emphasized many concrete rationales for naming Digitas OMMA's Agency of the Year, but maybe the best reason to have done so is this: Digitas seems to be the root cause of the digital competition between Publicis CEO Maurice Lévy and WPP's Agency of the Year, but maybe the best reason to have done so is this: Digitas seems to be the root cause of the digital competition between Publicis CEO Sir Martin Sorrell. At ubs' annual Global Media and Communications Conference in December, Sorrell used the forum to clear up what he called "a misunderstanding over our digital businesses" in terms of their relative size. Sorrell said digital marketing now accounted for almost a quarter of the Group's revenue and that its "digital prowess" was three times that of its nearest competitor - you guessed it, Publicis.

Kenny claims that Publicis is Google's biggest customer; at the usb conference, Sorrell said WPP's GroupM was its "largest single agency customer." But, through a program that started at Digitas, it's Publicis who has truly cozied up to the search giant, operating a talent exchange in which Google and Digitas employees have temporarily swapped roles. (That deal, according to Kenny, was the precursor to a similar job swap between Google and p&g.)
Whichever holding company you choose to back, one thing is clear: Publicis wouldn't even have been part of the equation if it weren't for Digitas.