Here we go again.  The rollercoater is climbing the hill.

The market is hot, the big agencies are hiring
as if they have unlimited budgets. The
agencies that scurried away or diversified their services away from interactive
work during the bust, years 2000 to 2004, are running back with open arms.
General agencies and direct marketing and response shops are now adding
Internet production teams at a record pace.

This frenzied activity that chews into an
agencies bottom line has prompted me to ask three questions.

1. Did
they learn from the bust (AKA dot bomb)?

2. Did
they make any significant contribution to the interactive space from 2000 to

3. Why
do big brands choose them?

All the same signs are there, mass hiring,
hiring at above market value for junior designers and developers and big brands
beginning to say “you’re too expensive”. But the difference is that the clients are in the drivers seat.  And in a business where you are only as good as your last project, the clients are not going to give much room for live or in market errors.

I recently sat at a round table where an unnamed
VP spoke desperately, “we need resources; I am even willing to buy a small
shop.” cried the lone tech guru in a sea of traditional art directors and

These were the same words that were uttered in
the late 1990’s. I think I would be less concerned if these large agencies had
graduated to an Internet 3.0 model.

In the 3.0 model interaction design, web design and engineering were all housed with in the same department.  In 3.0 the consumer is KING!

The model that failed in the late 1990’s was
what I have referred to as Internet 1.9. In the 1.9 model interaction design if present, was off to the side, not integrated with core engineers and art directors who have been making print and
direct pieces for the last six years.

It this model that slows market release as well
as lacks internal quality assurance teams.

Today large corporations and big brands are
suffering big loses to agencies who diversified so much that their talent pool
is too inexperienced to handle rapid application deployment methods that
componentized applications for future re-use, better profitability and improved consumer experience.

The big brands choose the 1.9 agencies because
they are there. They have long relationships and there is trust in numbers.
But this time it is the 1.9 shops that will fail the client by delivering
projects late, running over budget into the millions and lastly lack of quality
assurance.  At the end of the day, the consumers of the big brand will call it quits.  Then so will the client.

Those 1.9 models are getting locked in to
outdated rate cards and are still selling services and have yet to realize that
the money is in the right idea today. 

The 1.9 agencies have not made significant contributions
to the interactive space. My question when interviewing agencies has been: Have
they done anything mobile? Have they created mobile branded entertainment?
Where is they're blog? Do they handle componentized platforms for eCommerce,
E-mail marketing and eCRM, syndicated content, social networking and RSS today?

3.0 agencies are poised to make a come
back and steal big brand names from the disjointed “integrated” 1.9 shops. The
3.0 agency can answer yes to the above questions. A 3.0 Integrated agency looks
at the consumer experiences, lifestyles and passion points and then sells ideas
backed by audience data and have the code libraries to deploy rich digital

 During the bust they worked on their custom code libraries and have created a wealth of applications that span all multi-channel
platforms a few even have their own data centers. They can move quickly and
take advantage of the convergence of mediums. (AKA TV & Web)

 To the Internet 1.9 shops I yell, “Ice berg dead ahead” – however in this case there is time to turn and keep the relationships
that have fueled their bottom lines.

ON: Big Agencies: Did they learn? via @jpenabickley