The Wall Street Journal (paid sub. req.) reports that Internet advertising has grown into a $16.9 billion industry. Lots of firms are scrambling for a piece of the action—WPP, Google and Microsoft have all made recent headline-grabbing acquisitions that speak to the ongoing industry shakeup.
For decades, advertising has been a relatively simple process dominated by a clubby world. Long-established advertising and media-buying agencies, most owned by half a dozen global giants, make TV or print ads and negotiate for airtime or space with TV networks or publications, most owned by a handful of other big media companies.
But “the Internet was built on little companies,” says David Kenny, chairman and CEO of Digitas and digital strategy chief for Publicis Groupe SA. “Now that we’ve got big advertisers putting money on the Internet, they need big scalable operations.”
Ajaz Ahmed, chairman and co-founder of independent digital marketing agency AKQA said, “The agency of the future will be half a software company and half an entertainment company because that’s the new landscape.”
I agree with Ahmed wholeheartedly. Kenny’s comment, I’m not so sure about. Small companies can serve large spenders, in many cases, better than a so-called “scalable operations,” also knowns as big agencies.