Gartner's Magic Quadrant reports are evaluations of leading vendors in various fields. Recently, the research firm released a Magic Quadrant for Global Digital Marketing Agencies, assessing 14 major digital marketing agencies.
The Quadrant, Evaluation Criteria
The Leaders are identified as SapientNitro, Razorfish, IBM Interactive, R/GA and AKQA, while Visionaries are iCrossing, Accenture Interactive, Wieden+Kennedy, Wunderman and Digital@Oglivy. VML, Digitas and Draftfcb are considered Challengers, and Meredith Xcelerated Marketing is the only Niche Player.
Gartner said the criteria for making any of these quadrants included annual revenue of at least US$ 150 million, a front office that delivers customer-facing digital experiences, a full range of services, global reach and staffing, at least five new clients last year, and competence in paid, owned and earned media.
The “ability to execute” dimension was evaluated by such factors as competence in delivering a product or service, overall viability, sales execution and pricing, marketing execution and customer experience. “Completeness of vision” measures market understanding and strategy, sales and overall product strategy, and innovation.
What makes a Leader in this report? Take SapientNitro. Gartner said its Strengths include an “agile delivery model” that brings together business strategists, marketers, designers, UX experts, technologists and Project Management Institute-certified program managers, coupled with an account management model that has secured long-term relationships and healthy margins.
Gartner also points to the agency’s ability to secure large integration projects requiring scale and a global reach. In the report’s evaluation, SapientNitro provides both, building on its background in application development and system integration. The agency is also known for innovation in mobile marketing for such clients as Sony and Vodafone, and it has developed longstanding agency-of-record relationships with major clients, including MetLife and Unilever.
But the report also cited Cautions for even a leader like SapientNitro. It has lost two founding clients, CGU Insurance in Australia and Virgin Blue, although the report points out that these appear to be isolated cases. Another cautionary note: the growing competitive threat from other major agencies that combine mature IT service providers with leading ad agencies, such as WPP and Infosys.
The report similarly evaluates the Strengths and Cautions of the other Leaders. AKQA, for example, is assessed as an innovator that combines strategic and creative services with UX, digital commerce and technology, and that engages in R&D-like engagements for clients like Google. But its acquisition by WPP last summer could jeopardize its creative independence, the report said, and there are some doubts about its staff resourcing practices.
Other Leaders: R/GA, Razorfish, IBM
R/GA, founded in 1977 by brothers Richard and Robert Greenberg, is praised for a broad-based service portfolio that includes long-term relationships with such brands as Nike, its addition of product ideation to the traditional services model, its experience in design expertise and its drive to push the limits of technology in creating interactive user experiences -- while keeping the tech invisible. On the downside, the agency is attempting to go global but is still New York City-focused, and has what the report assessed as a “let smart people figure it out” loose methodology.
Now part of the Publicis Groupe, Razorfish was one of the first Net-based agencies. It is known for being able to tackle tough problems and for its strong user experience expertise, and has the technical and business chops to deliver on cross-channel engagements. But Gartner said its global presence is “more virtual than physical,” the company has been through multiple owners in the last decade, and its higher fees suggest that smaller or less prominent clients may not get the agency’s A teams.
IBM Interactive, as one might expect, has long-term relationships with Global 1000 executives in every sector of the world, combines business strategy with surprisingly strong skills in creative services and UX, and has the ability to facilitate unity between a client’s CIO and CMO. Cautions include the fact that its emphasis on large organizations means that smaller firms may not get high priority, there’s a complex sales model, and the firm is known for being expensive.
Visionaries excel at “completeness of vision,” as do Leaders, but Visionaries’ “ability to execute” is not as high.
Gartner praises Accenture Interactive for its ability to extend the brand of its parent firm, its ability to measure market performance, and its aggressive push to meet ambitious business results for its clients. But the report notes that the agency has limited creative resources and has reportedly been inflexible in working with a client’s existing vendors.
WPP’s Digital@Ogilvy is known for strong creative, global reach and an early adoption of social marketing, although it is heavily tilted toward marketing instead of business strategy, has had difficulty integrating its various practices, and lacks large enterprise application development/system integration skills.
iCrossing, a division of Hearst, offers an integrated approach to global clients, builds on its history in search marketing and brand tracking, and takes advantage of Hearst’s content resources. However, Gartner said iCrossing’s negatives include a still-ongoing integration of a stream of company acquisitions and a reported lack of creative flexibility.
Challengers and Niche Players
Gartner positions Digitas in the Challenger category, in part because of its recent loss of major clients, limited global reach and higher pricing. Similarly, Draftfcb recently had several major clients leave and clients have cited its so-so creative skills. The only Niche Player in the report is Meredith Xcelerated Marketing, dinged for silo-oriented operations, a retainer-oriented pricing model and limited technology and strategic services.
This past summer, Forrester Research released its Interactive Design Agency Overview 2012, with information on 97 vendors. That report differs from Gartner’s Magic Quadrant assessment, in that Forrester’s presents tables indicating which agencies provide which capabilities, but without Gartner’s qualitative assessments and rankings.