The big pixel

The boom continues in digital media design, says Mike Exon, but shortages of quality staff could be a problem in the future. Research by Natalie Spencer

Position Consultancy Digital media fee-income m Digital media turnover m % strategy work % creative work % technical/implementation % of UK fee-income derived from digital media
1 Wheel* 21.25 21.25 15 65 30 85
2 Revolution 11.2 11.2 30 40 30 100
3 AKQA 11 21 30 30 40 100
4 Ehsrealtime Group 10.4 25.03 29.87 25.97 44.16 38.5
5 Hyperlink Interactive 9.35 9.35 10 30 60 85
6= Rubus 9.1 9.1 100
6= IS Solutions 9.1 9.1 20 20 60 100
8 Seven Interactive 8 8 15 55 30 100
9 Syzygy 6 6 15 35 45 100
10= Grey Interactive 5 5 25 25 50 100
10= Reading Room 5 5 40 20 40 100
12 Rufus Leonard 4.85 5.44 35 40 25 85
13 E-xentric 4.79 4.79 30 35 35 100
14 Citigate.com 4.73 5.06 30 30 40 100
15 Wolff Olins 4.62 6 30
16 Deepend 4.41 4.41 0 100 0 97
17 DNA Consulting 4.3 6.45 25 30 45 100
18 Fi System Brand New Media 4.2 4.2 20 50 30 75
19 NetSite Productions 3.6 3.6 25 20 55 100
20 Design.net 3.5 3.5 20 40 40 100
21 AMX 3.4 3.4 10 45 45 100
22 Fitch Interactive 3.39 3.39 15 80 5 30
23 Circle.com 3.22 3.22 30 35 35 100
24 Green Cathedral 2.9 2.9 20 30 50 100
25 Black Sun 2.8 3.6 20 70 10 40
26 Nucleus 2.57 4.75 60 20 20 95
27 View 2.48 2.86 30 40 20 55
28 Global Beach 2.4 2.4 20 40 40 100
29 Fortune Cookie UK 2.39 2.54 34 25 35 94
30 Clockwork Web 2.3 n/a 20 30 50 100
31 The Identica Partnership 2.13 3.26 30 60 10 30
32 Digit 2.05 2.05 20 80 100
33= Euro RSCG Wnek Gosper Interaction 2 4 20 40 40 100
33= Oasis Communications 2 3.6 40 35 25 40
33= Electronic Ink Europe 2 2 15 55 30 100
36 Graphico New Media 1.93 2.12 5 80 15 92
37 PSD Associates 1.83 2.56 10 30 60 29
38 Domino 1.8 1.8 25 30 45 100
39 Lateral 1.75 1.75 30 40 30 100
40 DVA 1.69 1.69 10 40 50 75
41= Black ID 1.6 1.6 20 40 40 100
41= Kmpinternet.com 1.6 1.8 100
43 PoulterNet 1.51 3.41 30 25 45 28
44 Zapp Communications 1.5 1.5 37.5
45= Precedent 1.4 1.68 30 25 45 80
45= Startle Digital Marketing 1.4 1.4 20 66 14 100
47 4i 1.36 1.36 20 45 35 40
48 Head New Media 1.35 n/a 20 65 15 100
49 MultiJac 1.3 1.35 20 30 50 100
50= English & Pockett 1.29 2.82 59
50= Tableau Group 1.29 1.29 15 50 35 75
52 SAS Design 1.24 2.41 17 30 53 65
53= The Partners 1.2 1.5 20 50 30 15.79
53= Lambie Nairn 1.2 2.39 40 60 0 38.1
53= Static 2358 1.2 1.2 20 40 40 100
53= SohoLondon 1.2 1.2 30 40 30 100
53= Absolute Internet 1.2 1.2 15 55 30 100
53= Re:Media 1.2 1.2 25 35 40 100
59 Wax New Media Agency 1.08 1.18 20 30 50 98
60= Moonfish 1 1 20 50 30 100
60= Wicked Web 1 1.2 20 40 40 100
60= Xceed 1 1 20 30 50 100
63 Burrows 0.97 1.65 13 67 20 15
64 Carnegie Orr 0.92 1.52 35 60 5 40
65 Checkland Kindleysides 0.85 2.14 13 48 39 15
66 Redweb 0.82 0.82 4 90 6 100
67 Imano 0.8 0.8 20 30 50 100
68 Design House 0.76 0.95 20 50 30 23
69= Minale Tattersfield & Partners 0.75 0.75 10 60 30 15
69= The Open Agency 0.75 1.75 10 60 30 50
71= Arehaus 0.72 0.72 35 35 30 90
71= Quintessential Ideas 0.72 0.96 20 50 30 40
73 The Team 0.7 1.27 17 66 17 30
74 Bamber Forsyth 0.69 1.08 35 40 25 15
75 Navyblue.com 0.67 0.98 45 40 15 98
76= Radley Yeldar 0.6 1.14 10 50 40 12
76= Myriad Creative 0.6 1.1 15 45 40 50
78 Intro 0.57 0.57 21
79 Kabel New Media 0.56 1.6 20 40 40 100
80 Rise 0.52 0.56 30 50 20 80
81 Tayburn New Media 0.51 0.99 20 60 20 16
82= Spiral Productions 0.5 0.52 15 40 40 95
82= Gyro New Media 0.5 0.5 20 30 50 100
82= Nykris Digital Design 0.5 0.5 30 35 35 100
82= 64K Web Agency 0.5 0.5 20 40 40 100
82= Bostock and Pollitt 0.5 0.73 25 35 40 28
87 Broadband Communications 0.45 0.45 20 20 60 100
88= Ware Anthony Rust 0.41 0.7 20 45 35 19
88= Synergy Communications 0.41 0.92 30 30 40 31
88= Dow Carter 0.41 1.5 5 40 55 100
91 Integrated Media Services 0.38 0.38 30 50 20 95
92 Hildebrand Interactive 0.36 20 40 40 40
93 Paper White 0.3 0.5 50 30 20 50
94 Artery Design 0.28 0.35 15 45 40 70
95 E-creation 0.26 0.26 20 20 60 100
96 Tor Pettersen Interactive 0.23 40 40 20 15
97 Technophobia 0.2 0.47 30 25 45 100
98 Ocula 0.17 0.17 20 70 10 100
99 Skakel & Skakel Design 0.15 0.3 30 40 30 15
100= Dreamteam Design 0.13 0.13 5 50 40 95
100= Sears Davies 0.13 0.26 10 70 20 20

Position Consultancy Staff total Designers/Web developers/programmers Producers/team leaders/account managers Content designers/editors Production staff
1 Wheel* 380 103 144 19 4
2 Rubus 320
3 AKQA 200 100 60 15 5
4 RMR 161 30
5 Modem Media 140
6 Blueberry.Net 136 27 8 2 5
7= Hyperlink Interactive 130 75 15 15 15
7= IS Solutions 130 70 25 10 10
9= Rufus Leonard 120 60 36 4 4
9= Circle.com 120 57 46 10
11= Traffic Interactive 110 40 30 20 20
11= Grey Interactive 110 25 50 30 5
13 Static 2358 105 50 20 10 20
14 Domino 103 25 15 10 40
15 Deepend 95 71 24
16= Citigate.com 90 35 10 17 28
16= Syzygy 90 40 30 5 10
16= Zinc 90 30 30 5 25
19 E-xentric 78 29 7 6 8
20 Realise.com 70 36 12 1

It has been a bumper year for UK digital media groups. The sector is still reeling as it continues to live out its honeymoon period. And encouragingly, consultancy forecasts for growth next year are as bullish as fee-income results for this year have proved to be.

The average rate of projected growth in digital media fee-income is a massive 106 per cent for the next 12 months. Pure digital groups are even more optimistic, topping this last figure with a staggering 150 per cent average growth forecast (multidisciplinary groups see average fees growing by 45 per cent). Anyone who doubts the optimism of the sector need only look at last year’s forecasts, when average fees were expected to grow by 99 per cent. Then, while at a more embryonic stage, the industry was not in its period of fastest projected growth, as might be expected.

This year we have attempted to fly the flag for the most creative digital media groups with a new breakdown. This Top 25 listing distinguishes digital media groups by fees from creative client work, rather than income generated by strategy or technology work.

We have done this to differentiate our tables from those based purely on UK turnover, which fail to suitably honour the most creatively driven design groups. Such tables also offer an increasingly distorted picture by including money from non-design, and even non-digital work. Clearly, digital media design groups are becoming harder to identify – and yet there is still some consensus about who the players are.

The top 100

For the first time we have produced a main Top 100 table, featuring pure and multidisciplinary design groups. It will be apparent from this table that the rift between pure and multidisciplinary groups continues to widen as fees from the purists accelerate, partly due to the present climate of mergers and acquisitions that sees figures being consolidated for specialist groups.

It is perhaps fitting, if possibly surprising in today’s climate, that the two leading placed digital groups are former print groups which have moved into digital work.

The highest fee-income, recorded by Wheel, the merging Pres.co/ Foresight group, is three times that of the highest last year. This is no mean feat, considering last year’s top slot was also held by Pres.co. In fact, it is its third year of digital media domination in terms of UK fee-income. The company founded as The Presentation Company in 1987 has come to epitomise the legacy of many design groups in these tables – moving from print to become a digital all-rounder. Its merger, completed this week with Foresight, is also a sign of the times. Three of our top four groups have also been through mergers this year.

In second place, Revolution, another member of the old print guard, was acquired by the Asian e-business group Web Connection in October. It is now poised to open offices in mainland Europe next year. So too EHSrealtime, formed by the joining of Havas stablemates, direct marketing group Evans Hunt Scott and Realtime Studio earlier this year. Had Icon Medialab/ MetaDesign London been able to provide us with fee information, the merging group would have figured highly, too.

Among the rest of our top ten, the top eight groups have all netted fees above those of last year’s leader. To give an idea of the consistency of fee-growth across digital media, consider that last year only four groups earned more than 2m in client fees. This year 34 digital media groups topped the 2m mark, and more of the same is predicted for next year. But although many have transformed from print to digital media, it seems being a multidisciplinary design group is not necessarily enough to secure a top ten placing. For this survey we have defined pure digital media groups as having at least 85 per cent of fees from digital work.

Creative digital media work

While creative excellence is too subjective a quality to discern statistically, fee-income based on creative work is easy to calculate. This new table aims to credit companies selling creative services for digital media over and above other services. For this table, digital media groups were asked to distinguish between the percentage of digital fee-income earned for creative work and that earned for strategy or technical/ implementation work.

This new creative hotlist sees Deepend shoot into third place, behind the main top two from the main table. Among the purists, Black Sun at tenth, Digit at 14th and Graphico at 15th are also well rewarded by this method. Generalist design groups such as Fitch and Identica all benefit from a creative ranking, though, unfortunately, the likes of Wolff Olins, Intro and Rubus are among those which lose out because their figures cannot be split appropriately.

Multidisciplinary groups

The main tables show the financial gap between purist digital media consultancies and the multidisciplinary groups charted below has widened considerably over the past 12 months, as investment in and consolidation of specialist groups continues.

EHSrealtime, which tops the chart below, for example, ranks only fourth in the main league table based on design fees. Its nearest multidisciplinary rival, Wolff Olins, comes in 15th overall with FI System Brand New Media placed 18th. Fitch Interactive, fourth in this chart, meanwhile ranks only 22nd overall.

Total digital media fee-income for the top ten multidisciplinary groups is 35.54m compared with fee-earnings of 105.4m reported by the 11 consultancies ranked in the top ten overall.

A glance down the multidisciplinary charts reveals ‘names’ such as Wolff Olins, Black Sun The Identica Partnership, SAS Design and The Partners, which made their reputations in more traditional print and branding design.

Independent groups

Independent groups still figure strongly in the rankings, despite the surge in takeovers of digital media players over the past two years. Among the leading privately owned players are AKQA, Deepend, Rufus Leonard and Wolff Olins. But there is an old saying that ‘every business has its price’. If true, the question is will their creativity be compromised after they are sold?

Staffing

If one issue dominates all others in digital media it is the staffing question. Consultancies are projecting enormous increases in their staff numbers – something the under-resourced pool of digital staff will certainly have trouble providing.

With the pure digital groups being required to add new recruits to the tune of 74 per cent of existing staff numbers and multidisciplinary groups forecasting a 39 per cent increase in staff over the next year, the strained recruitment situation could be alarmingly hit. The average required rate of staff growth across all groups is 60 per cent.

The future

This year’s survey reflects the optimism with which digital media groups are facing the future. But if this optimism is not to be short-lived, it is time to confront some glaring obstacles. These obstacles, if unchecked, could spoil the whole party of the new economy.

What is clear is that the biggest single challenge facing these design groups is the question of staffing. There is no short-term way of finding the required numbers of trained staff with the talent to pioneer advances in designing for UK broadband Internet, digital TV and third generation mobile phones.

In the long-term, the responsibility falls equally to design groups, educational establishments and the Government to nurture the talent this booming sector is certainly going to require. For our creative new-economy groups to compete with the best in the world, it is essential for training contingencies to be carved out immediately.

But for designers, the area to watch in the next few months is the field of digital branding. Top branding consultancies such as Interbrand, FutureBrand Worldwide (working with IBM) and Wolff Olins (in conjunction with Scient) are already beginning to lay claim to this lucrative middle ground.

At the same time, the purists are beginning to counter them by setting up brand-strategy outfits, such as The Brand Strategy Group, unveiled last week by Oyster Partners. Many others recognise the importance that e-branding plays and have recruited branding specialists.

As the industry becomes more saturated with digital media specialists, design businesses are becoming increasingly differentiated by their creative quality and cost. Whether other big names will follow US-based Kioken into the UK is not certain. Yet evidently many feel that the creative high ground is not entirely overrun. And it will surely be from here that the future of digital media design will be most closely followed.

Efficiency tables

According to the latest set of data, pure digital media groups have made considerable strides in improving their efficiency. This is measured in terms of fee-income per member of staff.

Our 40 most efficient groups this year report to be running at levels of efficiency that were only achieved by the ten highest performing groups last year. This gain in staff productivity not only suggests that systems of work distribution have improved, but also that individual workloads have increased as well.

Five groups – Seven Interactive, Revolution, Reading Room, Design.net and Green Cathedral have efficiency ratings of over 95 000 per head. This is a remarkable achievement, if not the result of bullish optimism.

What we did

In keeping with previous Design Week digital media surveys, digital media groups with a design function were asked to submit details of fee-income, turnover, projected staffing levels and growth during their latest financial year via a questionnaire. We took an all-inclusive approach, encompassing groups not normally associated with the Design Week Top 100 tables, in recognition of the diversity of groups currently in the field. However, the overlap of disciplines in this field is becoming increasingly difficult to break down in terms of what actually constitutes design.

We were unable to include groups which did not provide us with figures for fee-income billed through UK offices. Notable omissions from purist groups include Tomato Interactive and Oven Digital, Germany-based Pixelpark, which has a global fee-income of 58.7m, Agency.com with a global turnover of $146.1m (100m), The Attik, Razorfish, Quidnunc, Icon Medialab and Entranet.

Top 25 UK digital media fee-income generated through creative work

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Position Consultancy Digital media fee-income m
1 Wheel (formerly Pres.co/ Foresight) 13.81
2 Revolution 4.48
3

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