Posted By | By Nicola Smith
The news that M&C Saatchi has acquired mobile marketing company Inside Mobile (nma 25 March 2010) is a milestone in a wider trend. As Ben Cusack, group creative director at Mobile Interactive Group, says, “If you look across all groups, they’re beginning to gather decent mobile vehicles. Aegis have got Marvellous, Publicis have got Phonevalley, WPP have got Icon. But this is the first time a traditional agency has taken notice of mobile.”
And there’s a growing realisation among brands that mobile is now an essential part of the marketing mix. Sienne Viet, head of mobile and social at Marks & Spencer, says, “When we started to integrate mobile, we knew we’d need to go to specialist agencies because we needed not just an agency that could deliver against a specific brief, but one (or more) that could work with us strategically, to help us brief in ideas properly, educate us and be proactive in suggesting approaches. This is just not possible currently with a traditional agency.”
- UK mobile ad revenue grew 99.2% between 2007 and 2008, according to the IAB
- A number of large agencies have bought mobile specialists in the past three years
- M&C Saatchi acquired Inside Mobile in March 2010, the first traditional UK ad agency to buy a mobile specialist
- David Holecek, interactive marketing manager at Volvo, is concerned further acquisitions might mean mobile specialists in agencies are slower to adapt
With advertisers keen to ramp up mobile activities, further acquisitions among agencies are likely. Paul Berney, MD EMEA of the Mobile Marketing Association, says, “It’s all about traditional agencies realising they need to integrate mobile into what they’re doing, and it’s faster to buy a company than acquire skills from scratch.”
Charlie Carpenter, client services director at marketing intermediary Creative Brief, says the sense of urgency is rooted in experience. “Three or four years ago, when digital was taking off, agencies, and particularly ad agencies, were slow to bring in skills and capabilities, so they’ll be quite keen not to get caught short this time round. I’d expect to see more agencies moving to bring mobile capabilities in-house quite quickly, given that there seems to be a move in the market.”
Stefan Bardega, managing partner at MediaCom, a media agency that set up its own mobile division in 2008, believes there are two tiers of agency: those that invested two years ago, ahead of the curve, and those that are now faced with acquisition as their only option. “A lot of agencies are suddenly waking up and realising they have to get mobile capability, and because they don’t have a year to get that by training people up, they’re acquiring companies,” he says. “That’s is fine, but it is a more expensive way of getting those skills.”
The jury is out on some of the first agency/mobile acquisitions that took place. Mobile agency Sponge was acquired by US mobile technology company NeoMedia in 2006 in an attempt to create the largest player in the mobile space, before being bought back by its management team six months later. Alex Meisl, chairman of Sponge, says, “Maybe some of the earlier acquisitions made one or two years ago haven’t always been successful, purely because agencies didn’t know what they were trying to acquire. They just thought they had to mobile so looked around for a mobile agency to buy.”
This wasn’t necessarily good for brands. Douglas McDonald, head of mobile at digital marketing agency TMW (and other Creston agencies) and former client services director at Sponge, warns that acquisition does mean an inevitable amount of “organisational inertia”. “The result in terms of proper integration of activity is probably going to take longer if you acquire because people have lots of other issues to deal with,” he says. “This will take away focus from what’s the best way to integrate mobile into a new campaign for Reebok, for example. Having been at a company that did get acquired, I can see that that definitely happens.”
Others believe further acquisition in this space is preferable to training people in the complexities of the mobile channel. Scott Seaborn, who joined Ogilvy two years ago as head of mobile technologies, acknowledges that adding mobile knowledge is a challenge. “You can’t teach people to do mobile easily. The only way to do it is to make mistakes. These mobile agencies have made all those mistakes over the past ten years. Acquisition of these specialists is brilliant for brands because their agencies can have full control over mobile production, and it gives the agency a lot more power to do better work.”
Luxury Swiss watchmaker Jaeger-LeCoultre chose Phonevalley, acquired by Publicis in 2008, to develop its iPhone app late last year. Phonevalley has worked closely with the brand’s media buying agency Zenithoptimedia, also owned by Publicis, to promote the app. “We can benefit from its international expertise,” says Gwenaelle Pourcelot, media assistant at Jaeger-LeCoultre. “And in the day-to-day work, we don’t feel the weight of the group because we’re working with a small team with strong expertise.” The app, a watchmaking school, had 140,000 downloads within two months.
While acquisition is arguably the most rapid route (on paper at least) to bring in mobile expertise, different approaches work for different companies. Both Creston and Ogilvy have taken a slightly evangelical approach. Creston hired McDonald, who has gently steered the digital team towards mobile. “These guys have a huge amount of digital expertise and mobile is part of digital, so they have 80% of the intellectual property and all the expertise to do mobile. They just need someone to help point out what the last 15% or so is,” he says, adding that the advantage of having his expertise in-house is that he can be involved in client meetings from the start.
“At Creston we’ve gone from doing no mobile to speak of to, in the last seven months, doing mobile for about 40% of our major clients,” McDonald says. “That’s because we integrated it into our proposal from the start.”
Ogilvy has also brought in an expert, Seaborn, to communicate the benefits of mobile, via big company meetings, presentations to account teams and the construction this month of a digital lab “full of funky hardware”, with partners including AdMob, Google, Nokia and Sponge. “As I got the teams more excited, that fed through to clients, then we got them in the lab and that started to generate briefs,” he says. Ogilvy has a network of 59 partners, from enablers to developers, giving it a very agile mobile workforce, and has won more than ten awards for its mobile work since Seaborn joined.
MediaCom, meanwhile, has spent two years educating its 500-plus workforce on the benefits of mobile, and head of mobile Peter Fyfe has just joined the board of directors. “All areas of the business now have mobile capability,” says Bardega. “So the direct response team book mobile search campaigns, our display team do mobile banners and buttons. We’ve been through the pain barrier and now have mobile in every corner of the building.”
Mark Brill, chairman of the DMA Mobile Council, believes that “acquisition will be the next step in the development of the mobile advertising sector”. But is this all good news for brands? David Holecek, interactive marketing manager at Volvo, which works with independent mobile marketing company Mobiento, believes that in an ideal world the trend would ensure brand consistency and interactive integration. But there are potential problems. “The mobile space moves at light speed,” he says, “and there’s a clear risk that the larger, more traditional creative agencies won’t be able to adapt as quickly as they need to.”
But Dusan Hamlin, joint MD of Inside Mobile, remains confident. “We know mobile is a far more effective channel when planned as part of an integrated marketing approach,” he says. “The benefits of this far outweigh any risk, particularly when the partner agency understands the value of mobile within the marketing mix. For the few agencies like M&C that get this formula right, little can stand in the way of success for clients.”