[Previous] [Next] - [Index] [Thread Index] - [Previous in Thread] [Next in Thread]

Subject: Re: UKNM: Cool! Let's have another webmedia debate!
From: Felix Velarde
Date: Wed, 20 May 1998 10:51:42 +0100

Mike Bracken wrote:

> Bumped into Mr B last nite, [memo to self: stay out of john lewis bathroom
> dept in future]and talked to him about these buyouts/closures/call'em what
> you will, that have been happening of late.
> Which got me thinking - a few months ago I can remember a lot of vitriol
> after the webmedia belly-up, but do recent events bear out Mr B's comments
> at this time - basically, the market's fucked and a shistorm is a comin!
> So, are we in a shitstorm, or is this a bit of fallout?

Isn't it funny how when, every two years, there is a market
shakeout in new media, everyone in the new media and advertising
press goes bonkers? In the last month or two we've seen
WebMedia, AMX, New Media Factory, Indexfinger and Upstart
keeling over. Some say 'oh, this is the end of the internet',
others 'this is the end of digital media', more 'told you so',
and so on. None say 'this is a function of natural selection'.

Perhaps they should. One of the questions I am asked frequently
is 'why should we work with your company as opposed to my ad
agency or creative dependent?'. Clients should I think
invariably ask an agency to justify its existence prior to
hiring them. It's only natural. I believe, and have since almost
day one of the UK industry, that success in new media will only
come to those who achieve tangible results for their clients. My
view is that if, on your first job, you achieve the aims set out
in the brief, you will have a client and budget to continue. If
you are successful enough on their behalf, you will accumulate
more clients, budgets, a reputation for success and a future.

And if you are successful enough for your clients, you should be
able to apply that to your own business. Which is where some of
our erstwhile competitors and colleagues have fallen down. The
company that I am involved with has never neglected making new
business cd-rom presentations as carefully as those it produces
for its clients. We've never failed to structure our own web
sites with sales in mind, and as a result we one of our sites
gets over 120,000 page impressions a month
(http://www.head-space.com). That's our little demonstration
that we are reliant on success throughout our business, not just
on what we write in the pitch document.

'So why are you so against ad agency new media shops?', you
might ask. The problem I think with ad agencies is that they
generally assume that they will be successful because they've
got the client relationships, they understand the brand and so
on. What they forget is that they do not have an understanding
of the brand's relationship to new media users, who act in a
different way to the average couch potato or commuter. Which is
why we've seen closures like that of Lowe Digital, and the
withdrawal into in-house production of some major clients, which
many of us consider a major pity. Maybe ad agencies can learn to
work with specialists, allow them the freedom to use their
business plan to best effect (i.e. give credit, one reason we
don't take third-party work from any advertising agencies). If
they can once again get their heads around the age-old concept
of letting the creative specialist be creative, maybe the
ditching of the Lowe Digitals of this world will not be
necessary in the future.

Another problem associated with ignoring the basic tenets of
survival of the fittest is the 'walking into a brick wall'
effect. Some of the companies we've watched sailing past the
window have done so taking a lot of investors' cash with them. A
major problem with using large amounts of cash to kickstart a
new media company is that at some point in order to become
profitable (i.e. credible and sustainable) you need to pay the
money back (even if it's to daddy, as in some pretty surprising
cases). This can lead to all sorts of problems both in terms of
hard cash and politics - remember First Information Group?
Suddenly the brontosaurus realises that it is in a spring, not a
new media lake. So what the independent, entrepreneurial
companies have found is that while turnover may not be enough to
float us all on AIM, our flexibility and our understanding of
our environment means that at least we are viable and profitable.

Successful companies have found that by concentrating their
efforts on nurturing existing clients, they can reinforce the
success that they have created on their behalf. In the last year
the majority of our new business has come from existing clients.
The successful new media agencies (and for that matter ad
agencies) don't spend all their money trying to land that big
new bit of business, they spend their time making sure they are
creating success in their media for themselves and their
clients. The ones that fall, the ones that don't make it through
the biannual shakeouts, tend to be the ones preoccupied with the
size of their client list. Not the quality of their solutions,
nor their understanding of their niche. While the future remains
somewhat muddy, this process can be quite interesting to watch -
it's evolution in action.

Felix Velarde

Managing Director Head New Media

[ success is about interaction ]
[ voice + 44 (0) 171 737 7579 ]
[ vodaphone mobile 0468 990711 ]
[ http://www.head-newmedia.com ]

  UKNM: Cool! Let's have another webmedia , Mike Bracken

[Previous] [Next] - [Index] [Thread Index] - [Next in Thread] [Previous in Thread]