Jockeying for position in digital dimension

A CROWDED digital marketplace is driving diversification in Perth’s web development sector and pushing this specialised industry into the advertising heartland of branding.

Triggering this shift in the marketing and advertising sector has been the growth in the number of businesses offering digital or online services.

Everyone from Perth’s top advertising agencies to public relations firms and franchise printers are touting their digital credentials.

And in a strange about-turn, it’s pushing some web developers to broaden their services and embrace brand strategy and marketing advice.

Bam Creative managing director Miles Burke said traditional web design development studios needed to provide consulting services to keep pace with the market.

However, he said the rapid expansion in the online and digital market pointed to an industry-wide shift that had blurred the once distinct lines between marketing businesses and service providers.

“20 years ago there were five or six printers in West Perth that served the advertising industry; now there are a few premium printers,” Mr Burke said.

“What has happened is the rise of franchise and network printing companies such as Snap, which does everything, and the same thing is happening to the web industry.

“Brand strategists and marketing agencies are starting to offer the services that we provide and in return Bam and the industry at large ... are now looking at placing themselves in that (strategic) area.”

The push factors aren’t limited to market conditions.

Increasingly, Mr Burke said, clients were seeking advice on how to integrate a digital strategy into their broader marketing plan.

He told WA Business News the rapid growth of social marketing had led to a big jump in the online footprint far beyond traditional websites and clients were eager to understand how they could best harness this revolution.

Bam has plans to hire a senior marketing consultant to build its strategy and consulting business and ensure it can provide the services clients are demanding.

“Ten years ago the average client came to us and I would ask ‘why do you need a website?’ and they would say ‘because my competitor has one,’” Mr Burke said.

“Now we are getting more and more clients coming to us saying ‘we need a website to solve this issue or fix this problem or automate this’.

“They are now thinking bigger picture about how they can save time ... and we can help promote or mature the business brand.”

SUMO Digital Agency director and owner Martin Grant said web development firms that solely relied on advertising agencies for referrals could be feeling worried, but added SUMO was not in that category.

“Our model doesn’t depend on media spend nor do we ratchet up our billing based on client turnover – something many ad agencies survive on,” Mr Grant said.

“In an era of clearly measurable return-on-investment and accountability I would be more concerned for the approach they (the advertising agencies) are used to than for digital agencies or web developers.”

Vivid Group managing director Damian Cook welcomed the expansion of digital services across Western Australia’s marketing and advertising sector, which he said was delivering better educated, more engaged clients.

“I don’t see it as a threat at all, we currently deal with a number of the big agencies and the closer our relationship is the better,” Mr Cook said.

“If you have an agency that is creating all the campaigns and doing all the tactical work and then digital runs in isolation it is not going to be as effective as if it runs hand in hand.”

However Vivid’s business model is less reliant on the so-called ‘front-end creative’ for websites than the hidden applications that power sites and their functionality.

The creative, web development work represents only about 30 per cent of Vivid’s caseload with the other 70 per cent taken up by the hard, application-development contracts.

“We do a lot of larger e-commerce projects that the other companies either can’t or don’t want to do,” Mr Cook said.

“We do a lot of web content management systems, not creative, but the applications that power them as well as intranets and extranets.

“And that side of the work the agencies aren’t trying to do.”

Mr Cook said Vivid, which was acquired by the Mitchell Communication Group in 2008, believed there were big opportunities in the retail sector as Australian shoppers migrated online.

“A lot of the retailers that have traditionally sat on the fence are now realising they can’t anymore,” he said.

“They have been worried about cannibalisation but that is going to happen anyway, it’s a matter of whether they cannibalise themselves or lose that business to someone else.”

Fujitsu director microsoft solutions centre, Mike Gordon, said their business was similarly shielded from the shifts in the marketing and advertising sector because it was focused on developing the functionality that sat behind web sites.

He said Fujitsu worked in partnership with the local advertising agencies to build the applications behind their creative designs.