Microsoft puts digital ad agency Razorfish for sale
June 29, 2009
Microsoft Corp. plans to sell its digital advertising agency Razorfish and has appointed Morgan Stanley to find a buyer. The report was initially released by the UK based Financial Times
The French Advertising Agency Holding company Publicis Groupe – was cited as being interested in buying the digital ad agency.
This actually was the most interesting part of the report:
“One analyst valued Razorfish at $600m-$700m, based on sales of about $400m last year and profit margins for similar businesses of 12-13 per cent. “Much more than that would be overpaying,” the analyst said, adding that even in digital marketing, valuations had fallen since last year.”
Razorfish never made sense for Microsoft… and based on how Publicis runs it’s digital assets, it might not make sense for them either. Perhaps it would make sense to spin it off as a separate company.. Make matters worse was that Razorfish was pushing out Linux based websites for their clients… and being owned by Microsoft made it all so much worse.
Clearly the Holding companies never had much success in digital.. hell they can’t even define it yet.
Sapient buys traditional ad agency
June 17, 2009
In a big WTF, Technology consulting and interactive marketing company Sapient Corp (SAPE.O) is to buy Nitro Group LLC, an independent advertising agency, for about $50 million as it looks to spread its reach to the traditional advertising space.
“It marks the first time a large digital shop has gone the other way and acquired an above-the-line agency,” said Gaston Legorburu, executive director and worldwide creative officer at Sapient, in an interview with Reuters.
What he is saying is that these digital firms are going after traditional advertising agency clients, considering the advantage they have on the digital side and the overall perceived feeling that traditional is “cake” compared to digital. It looks like this is going to be a ground breaking moment, the moment when digital companies start to raid holding company clients.
The holding companies dragged their feet for so long that this was bound to happen, and with their extreme lag in technological innovation, but huge client list it will be an interesting few years.
New York-based Nitro brings with it an impressive clientele, which includes Mars, ConAgra Foods Inc (CAG.N), Volvo (VOLVb.ST), Nike Inc (NKE.N) and Foot Locker Inc (FL.N).
Story is developing………
WPP on Madison Avenue
Crispin Porter + Bogusky buys a daddy
June 11, 2009
Crispin Porter + Bogusky, Colorado’s largest advertising agency, said Thursday it has acquired Daddy, a Swedish digital agency, in a move to expand its European operations. States the Denver Business Journal
Then Mr. “I sell 3000 calorie Whoppers for Burger King, but I have a diet book” states “”We believe that digital is at the center of everything going forward,” Alex Bogusky, Boulder-based co-chairman of CP+B, said in a statement. “We’ve made digital the focus of our U.S. business, and with the acquisition of Daddy, it will now be the center of CP+B Europe as well. We’ve worked with Daddy a bunch over the past three years and are continually amazed at how smart they are.”
Well good for them, they still launch websites without Metas and Titles, I guess that is what the problem is with the definition of Digital Advertising.
Clock still ticking until CP+B goes into digital advertising, it’s only 2009, a full 15 years after this hit mainstream, because clearly we have seen your work.
Morgan Stanley : WPP Group plc is screwed
March 13, 2009
Morgan Stanley is on record for stating that WPP group plc will lose 12% of it’s revenue over the next 18 months. A 7% hit in revenue for 2009 and another 5% per cent crash in 2010, implying a deep and prolonged global recession. Nearly 1% decline per month over the next 2 years.
This will have profound repercussions throughout the company, as clearly they didn’t fire 12% of their staff, they didn’t cut back 12% in expenses and they didn’t invest properly in digital media .. in fact they spent money on the wrong assets leaving WPP group plc with a gaping hole the size of Texas for the skillset needed during a recession / depression.
They are firing people right and left now and refusing to go into higher ROI assets that could be key to landing new accounts. In other words they are really heading down the wrong path.
This is going to be a really ugly 2 years, really ugly.
WPP’s SEO division
Advertising Agency Arnold finds new billboards
March 10, 2009
Arnold has decided to do something quite interesting. In light of all the recent store closings, they have decided to turn them into digital billboard for Carnival Cruise Lines. Literally.
It’s not like they are not going to run out of space, the vacancy of the malls has hit the roof as many of them are now “ghost towns”.
If anyone has a photo of these, please send them over. We don’t know if we should laugh or cry at this new development. It’s great to have something there other than empty windows… the problem is how did those windows turn empty in the first place…. and that is the root of the problem.
Just imagine the level of foot traffic this mall is getting… all those cool stores open…
Razorfish firing dozens of people
February 6, 2009
A Razorfish spokeswoman confirmed that the digital ad agency laid off about 70 people on Thursday on the West Coast, including its Seattle headquarters and offices in Portland, San Francisco and Los Angeles. It goes back to what people define as “digital advertising“. Clearly our definition of Digital and theirs are not identical.. actually.. not even compatible.
What Razorfish does isn’t digital advertising, what they do is Traditional Advertising and throw it online. That isn’t digital… or at least what we define as digital.
I do Digital! … uhh…. sure you do.
NYT : Ad Agency ‘Trust me’ is already outdated
January 25, 2009
According to the New York Times the new TV show “trust me” is already outdated, specifically points to online marketing, SEO, SMO, as lacking in a big way on the show, because when the show was filmed prerecession the BDA’s didn’t give a crap about ROI for the client. Not sure if they wanted to admit the truth like this, or if that was the intent, but neverless it was outed in an extreme fashion.
It’s what happens when 4 companies control all the advertising dollars, the truth isn’t the truth until they say so, no matter what the reality on the ground is.
“Trust Me,” a TNT series set in a Chicago advertising agency, is clever and likeable — which, incidentally, is what most commercials try to be. But the series, which begins Monday, was created before the collapse of the credit market, and accordingly it looks at times like a period piece. Its characters live in the contemporary world but operate in a prerecession economy when television and print commercials still ruled the market, and advertising executives paid scant attention to the Internet, DVRs or the bottom line.
Classic, advertising agency fat cats talking about how to bilk the client when just right around the corner is the mother of all recessions.
I’ve fallen, and I can’t get up!
Define Digital Advertising for 2009
January 1, 2009
We figured someone had to define “digital advertising” for 2009. Many of the holding companies are using the word “digital” when in fact what they are doing is not even close. The advertising agency holding companies have made very little investment in digital. What they call digital is Flash and Photoshop, what the client is asking for is SEO and SMO.
These are wildly differing disciplines.
SEO and SMO firms don’t view Flash as digital marketing or advertising, not by a long shot. They complain that Flash does not spider in the search engines properly, requires plugins and is virtually useless for client ROI. To make matters worse, it doesn’t even render properly on many mobile devices.
Advertising Agencies are focused on flash because it’s the closest they can get to a “shiny new site” that mirrors a “killer” TV look as possible.
Virtually none of the ad agency holding companies have invested in the first discipline but have extensively invested in the second leaving a gaping hole in their capabilities. It’s a shortfall of extreme measures.
So next time an agency pitches you, ask them to define digital… if you get answers that don’t include SEO and SMO… keep walking.. because what they are talking about isn’t exactly what you are.
Adage shows what’s wrong with Advertising
December 29, 2008
It’s not the article that showed what’s wrong with the Advertising agencies, it’s the graph. On this article is a link to this graph:
All that is wrong with Advertising
The problem we have with this is that even though digital generally generates the highest ROI, it only accounts for 10% of total ad spends. It’s what happens when the agency of record is a BDA with limited digital / SEO and SMO skillset.
Even though this could potentially save accounts, the BDA’s have invested limited resources in flash heavy digital, and hardly anything with SMO and SEO.
So when broken down even further, you’ll notice that the vast majority of digital is in fact flash that the search engines have trouble spidering and reading the content inside. Meaning even with their digital approach they are going backwards to charge the clients more, and generate less ROI for them.
Fairly amazing stuff, considering the state of the economy you would think that the BDA’s would be focusing more on ROI… but they are still focusing more on bilking the client.
FORBES : “the market pricing is accurately forecasting the Great Depression of 2009, ‘10, ‘11, ‘12 and ‘13″
November 12, 2008
Something that every advertising staffer and management needs to know, advertising is the FIRST thing to go out the door during a recession. If you don’t understand economics, then you are in the wrong business.. because this is going to DIRECTLY affect your career and your ability to continue to work in an advertising agency.
It appears that Forbes is predicting the great depression of 2009, 2010, 2011,2012 and 2013.. and by reading the headlines that include nothing other than lay offs, bailouts, foreclosures and markets crashing we have to say we agree.
This author worked in the .com world during the .com crash, that was bad.. this is worse.. like not even in the same league worse. We already surpassed the 2002 recession months ago… and this is not bottomed out.. not by a long shot. We will be seeing double digit unemployment within 4 months at current job loss rates.
We’re in an economy that’s going to experience a severe structural adjustment. Many things happen during a recession, 90% of them are bad, but 10% of them actually are a positive overall. This recession / depression whatever you want to call it is forcing some pretty dramatic changes in the Advertising world. The rush to digital such as SEO and SMO is dramatic, where the ROI tends to be much higher for the client. Generally it’s not bad news for the digital firms, but it’s a nightmare for firms that mostly derive their revenue from traditional.
Here’s why it’s a nightmare, the client dumps their 120 million a year budget, the agency fires 50 people working on the account. The client then turns around and hires a SEO / SMO firm to run a campaign during the down turn to the tune of 300k a year. The SEO firm hires two additional people to manage it. It’s a net loss of 48 people in advertising, but the argument here is that the two individuals are doing the same relative work for the client as the 50… at least in terms of revenue generated for the client.
Now for the Forbes Article:
The average prices for certain loans have dropped to 70 cents on the dollar, what they usually fetch in bankruptcy. The differences between corporate bonds and Treasurys now stretch beyond some investors’ beliefs.
“Spreads are more than ridiculous,” said David Kotok, chairman of Cumberland Advisors in Vineland, N.J. “Either we have dysfunctional credit markets evidenced by absurd pricing, or the market pricing is accurately forecasting the Great Depression of 2009, ‘10, ‘11, ‘12 and ‘13.”
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