First, because it showed that ZenithOptimedia has a strong enough digital operation, outside of its Zed Media business, to compete for large online accounts, and second, because it highlighted the increasing trend for clients to integrate online media business with planning and buying across more traditional channels.
Of course, one man's integration is another's separation, and the news was a blow to Agency Republic. The agency had run the O2 online media business out of its Media Republic division and alongside the digital creative account it continues to hold. So while O2 now has its media under one roof, it faces the loss of any benefits it accrued from having its online creative and media in a single agency.
While O2 praised Media Republic for building its "credibility within the online market", the O2 marketing director, Sally Cowdry, concluded: "The lines are now blurring between the offline and online media space and as a result we see the need to adopt a more integrated campaign for planning and buying."
That word "integrated" again. In reality, one suspects that another word in the O2 press release ("efficiencies") is the biggest influencer behind the change and that, despite media being handled through one point, Agency Republic and ZenithOptimedia will do well to continue the success delivered by O2's online campaigns to date.
Commercial terms may be improved and there is certainly an opportunity to improve cross-media thinking, but this comes with the risk of widening the divide between media and creative. After all, ZenithOptimedia is based in a different building and has just swiped one of Republic's largest accounts. The dismantling of the traditional full-service agency model taught people many lessons, and it will be interesting to see if they can now be applied in this case.
On a positive note, the O2 decision is clearly indicative of improved digital resource at mainstream agencies. While cost might be driving the move, it shows that media agencies have upped their game sufficiently to benefit from the possibilities of consolidation. As a result, there are now very few online accounts split from the rest of the media (i-level's COI and Orange accounts are obvious exceptions, but how long will this remain the case?) and the major beneficiaries from growth in online spend are now sure to be the major networks. Where once they may have feared the surge in online activity, they now have every reason to welcome it. How else do you explain the presence of several mainstream agencies among the membership of the new IPA Search group? Even the driest online techniques represent revenue growth.
This article was first published on Campaign