Does the Industry Need Big Digital Agencies Anymore?

Production Shops Go Directly to Clients in a Threat to Middlemen

Posted by Kunur Patel and Jeremy Mullman on 11.16.09

NEW YORK (AdAge.com) — When Wm. Wrigley Jr. Co. dumped Digitas, Tribal DDB and Agency.com for a trio of smaller, production-centric digital shops last week, it did more than deal a setback to three global interactive agency networks. It raised the question of whether big digital agencies are being outflanked by leaner, faster, more-creative shops.

Those agencies and their peers routinely hire the likes of Big Spaceship, Firstborn and EVB — the troika that swiped Wrigley — to help execute highly technical creative projects the agencies dream up for global-scale clients such as the gum maker. Now those little shops are moving into direct relationships with marketers such as Pepsi, Microsoft, Adidas and Pernod-Ricard, and leading some to wonder whether the biggest digital players are becoming unnecessary, pricey middlemen.

And that’s not the only squeeze going on. As old-line agency networks build better digital units, they’re increasingly competitive with the bigger digital shops because they can offer similar scale. Case in point: Havas’ Euro RSCG 4D’s recent takeaway of IBM’s digital account from Digitas. (more…)

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