Big ad firms find stumbling blocks in jump to Net
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By Kim Girard
Staff Writer, CNET News.com
January 18, 2000, 3:45 a.m. PT
Advertising agencies seeking to launch interactive services are finding it's not as easy as a click and a smile.
Interactive services are a logical next step for companies such as McCann-Erickson, Saatchi & Saatchi, Leo Burnett and Ogilvy & Mather as their business models evolve. But taking the success they've had building brands such as Coke and McDonald's in the real world to the Web has been limited--in part due to the focus and strength of an aggressive crop of interactive companies including Razorfish, IXL, Organic Online and Agency.com, analysts say.
All the advertising giants have launched interactive divisions, some which have tackled false starts or have been branded and re-branded. McCann-Erickson has Thunderhouse, which last month was folded into Zentropy Partners, a new company backed by Interpublic, McCann's holding company. Ogilvy, which has had a rocky interactive strategy, has OgilvyOne. Leo Burnett has little-known Giant Step. Saatchi has Darwin Digital.
"It's absolutely essential that (advertising companies) have some interactive practice," Jupiter Communications analyst Drew Ianni said. But Ianni, who believes the big advertising winners of the future will combine both interactive and offline skills in a soup-to-nuts package, argued that the giants, with the exception of Ogilvy, haven't been aggressive enough online.
Despite that argument, no one is quite sure how the nearly $200 billion-a-year advertising and branding industry is going to shake out--and how crucial interactive services are to the traditional industry's success.
There seem to be two schools of thought. The first argues that fast-growing Net-focused companies will win the advertising race in the long term because they are more nimble, smaller and focused solely on the Web. The other side contends advertising giants that built Fortune 500 company brands could use their war chests to buy what they lack in Web design, marketing and branding strategies.
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