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Traditional Agencies Launch Digital Arms - MAA Communication’s Sabre Digital & Aegis launches Isobar
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Which agencies are launching digital arms?
Aegis had already announced that it would be launching Isobar in India and that was part of they reason they strategically invested in Communicate2 (Check out our WATShow with Vvek Bhargava of Communicate2 talking about that deal). Aegis had big plans for Isobar in India right since 2006 when we had blogged about them. Now Isobar has roped in Shamsuddin Jasani who was earlier heading digital at Hungama as the VP of Digital at Isobar. On the other end a completely traditional agency MAA Communications (earlier MAA Bozell) has announced that it would be launching a digital arm by the name Sabre Digital.
What does this mean for the digital media industry?
Acknowledgement of Potential - Traditional agences opening digital arms is an acknowledgement of both growth and potential of this space.
Smaller pieces of an existing small pie? - But on the flip side it also means that there will be lesser business for everyone momentarily as more than the number of required digital agencies would float in the market.
Specialists may lose in shortterm - Well given that the industry is still nascent (only about 500 crores) the specialists i.e. the standalone digital agencies would see lesser work being outsourced to them as the traditional agencies are opening their own arms, In effect the growth would happen for the traditional agencies but limited again to their own client access as other traditional agencies who don’t have their own digital arms would still outsource to the standalone. In the long run the specialists which survive will benefit as the clients will pay a premium for specialists.
What about the adnetworks? - Standalone adnetworks (i.e. the one’s which aren’t affiliated to any digital agency (the only one’s i can think of is Komli and Ozone) will stand to gain from this trend of traditional going digital as adnetworks offer an easy and cost effective way for new traditional clients to go digital and would be relatively easy work for just set up digital agencies in traditional backyard.
On the whole this move by traditional agencies will positively impact the market from a longterm perspective but on a short term the market may suffer as too many agencies fight out for a small piece of the pie.
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