Re: UKNM: Cool! Let's have another webmedia debate!

[Felix Velarde]

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


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