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The recent release of the Forrester Wave on Australian Interactive Marketing Agencies has stirred up howls of protest.

Whether the methodology was sound is not my call and I have not written this article to discuss the merits or otherwise of the report, apart from saying I’m really pleased and proud of how Hothouse fared in the report.

It’s good to be included in this group of digital agencies.  We all provide a broad range of services, we mix technology and creative, and we’ve been around a while.

First, a little bit of history. The Australian digital industry kicked off in 1995.  We faced a huge range of challenges. We were all making it up as we went – how could we have possibly known what we were doing? We faced clients with an interest and no money; we had to deal with the issues of training, investment in technology and just keeping up.

Just like the USA, we had a number of high-profile floats in Australia. They raised a lot of money and, tellingly, not one of them is around today. Some of the people running these businesses were smart and their demise shows how hard it was to scale these businesses. The USA had similar issues; some big groups died and some made it through.  There was a lot of learning in these mistakes.

We started HotHouse with our own content management system (CMS). We then moved to a proprietary CMS and migrated the business through seven versions of that product.  We also had to deliver .net solutions and now open source.

The complexities of the environment in which we’re operating have increased exponentially. Early on, email marketing became a product all digital agencies had to adopt. Then came banner advertising, followed by search engine marketing and optimisation. You could spend 10 years coming to grips with the complexities of search alone. Now we have mobile and social media, not to mention cloud computing and the issues of web 2.0.

I remember well the first report on online advertising. At that time there was $9 million a year spent online. I gather Google is now pretty close to the $1 billion mark in Australia alone.

Consumers have migrated online. It’s no longer something remarkable – it’s everyday. We have a contributor to one of our communities who is 60 years old. She lives in the country and is into geocaching. You have to be wired for that.

Real online marketing and advertising is complex. It’s about building things that Google likes, it’s about content, it’s about servers, programming and cloud computing. It’s about metrics, scaling applications, xml sitemaps, personas and much more.  You need a 10 year-plus heritage to have a chance of understanding this stuff.

We have just finished an online application for a client with a global business.  This will be Australia’s biggest social media project, they get 80 million page views a month. We’ve built a ruby on rails-based social media application integrated with a Flash application and delivered on the cloud. There is ecommerce, banner serving and business integration. This is the work of a digital agency, not just Flash sites and banner ads.

Collaboration is critical in digital, no one can do it all anymore. The head of Razorfish worldwide (an old school ad guy) said traditional agencies will never get digital because digital requires collaboration and with traditional agencies the creative director is king; the structure of an agency kills collaboration.

We’re in an age where the target market is irrelevant. Consumers are complex and target markets were only relevant in an age of media scarcity.  We now have to find our consumers where they live. This means the focus on the big idea is anathema for most marketing problems. Digital agencies have been working with this fact from the beginning. Testing and optimisation are the judge of a digital campaign’s success.

Whatever the process, six agencies made it to Forrester’s final list.  Every single one of these companies was started as a digital agency. There are many other worthy companies mentioned in some of the discussions. The common element is the names have all been in pure digital for the past 10 years at least.  It takes that long to really understand this stuff.

So if you’re looking at your digital budgets and wondering where to spend the money, spend it wisely with a digital agency, not a traditional agency doing digital.

Tags: Australian Interactive Marketing Agencies, Forrester Wave, HotHouse, linkedin