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The global digital agency (r)evolution

As the world of digital advances daily, it’s interesting to consider how digital agencies from New Zealand and Australia are evolving compared to those from the UK and US.

Tim O'Neill - Reactive MediaThe past two years have seen a digital boom in Australia (and to a lesser extent New Zealand), with several of the larger digital agencies (including Reactive) doubling in size over this time. This growth in demand has led to a digital skills shortage in both countries, which is one of the biggest challenges facing agencies of all kinds.

In a tough recruitment market, agencies are increasingly looking abroad. Many Australian agencies are actively recruiting staff from the UK and New Zealand, where the economy and exchange rates make a move to Australia attractive. There is also an increasing appetite for building dedicated off-shore teams in Asia (China, India and Indonesia are popular).

The New Zealand agency world is small and close-knit, with many companies employing less than 10 staff. Unlike Australia this leads to a lot of collaboration, and ultimately allows some of these smaller agencies to be true creative hotshops, creating amazing work that punches above its weight.

Services offered by digital agencies in New Zealand and Australia are a close match to our international friends, and the same goes for the growth areas (such as mobile and social). The smaller budgets of local marketers may hurt agencies’ chances in the International award shows such as Cannes and the Webbys, but does ensure a stringent focus on effectiveness – with the best agencies ensuring every dollar is well spent. As such, local agencies are well positioned to bring this rigorous and disciplined approach to US and UK brands.

On a recent visit to New York I met with several digital agency owners who confirmed this difference in attitude to effectiveness. This approach is not due to laziness or lack of experience, they explained, but that when playing on a bigger stage the work requires more experimentation and far greater amplification. A shot-gun approach is sometimes the best approach. A shot-gun strapped to a cannon may be even better.

What does this mean for local agencies (digital or otherwise) considering international growth?

I believe that over the next two years, as budgets continue to move from traditional media to digital, New Zealand and Australian digital agencies will continue to thrive and take a more prominent role on the global stage. I also expect more local digital agencies will expand into the US and UK markets, and also into Asia. And those that take a long-term view, I believe, will thrive.

As this happens, no doubt the difference in cultures will begin to fade, but with luck the individuality will stay intact and shine through in creative and innovative work that is unique to each region.

Tim O'Neill is cofounder and joint managing director of Reactive Media, which has five international offices.