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i-level was one of the UK's most admired agencies for more than a decade, an independent which specialised exclusively in digital media. After ten years as one of the dominant players in its sector, i-level's collapse in Spring 2010 was as dramatic as it was sudden. The loss of key client COI, as well as punishing financial obligations to its private equity owners, forced the agency into liquidation.
The core of i-level's offering was its online advertising planning and buying service - at its peak it claimed to have more dedicated digital media planners and buyers than any other agency in Europe, and handled European media for clients from its London office. It also arranged interactive sponsorships and partnerships, search optimization and placement, mobile marketing and social media. In 2007, the agency won the prestigious Queen’s Award for Enterprise: Innovation. In 2006, the company established consultancy service Generator as a separate unit, under parent group ILG Digital, and Premier Affiliate Network was formed in 2007 to disseminate advertising to larger independent websites. There was also a special unit dedicated to social media networks, under the name Jam.
Andrew Walmsley and Charlie Dobres were already veterans of the UK's online industry when they launched i-level in 1999. Three years earlier, Dobres had set up Lowe Digital, one of the first dedicated interactive agencies in the UK, for what was then Lowe Howard-Spink, and he went on to become a co-founder of the UK arm of the IAB. Walmsley had managed the new media operations of BMP (later DDB London) and BBH. The two joined forces to set up their own shop, securing commissions in their first year from Yell, Smile and EasyJet. The latter campaign won the first ever IPA Effectiveness award for internet media. That confirmed i-level as the UK's premier digital media agency, an honour that was reinforced in 2003 by the capture of what was then the UK's biggest-ever online media pitch, the consolidated £6m digital planning and buying account for COI Communications, the marketing arm of the UK government. As that account expanded it gradually came to represent by far the largest slice of i-level's income.
Towards the latter half of the decade, Dobres transferred to a part-time role, Walmsley to a less hands-on post, and the group appointed David Pattison, former founder and CEO of media network PHD, as group chief executive in 2007. Following that development, the agency toned down the arrogance for which it was once noted, and which had earned i-level plenty of headlines but also made a few enemies. Instead, the agency adopted a lower profile, putting all its energy instead into delivering results for its clients. At the end of 2007, the group was reported to have begun talks with several possible strategic partners. Aegis was said to be among the front runners to acquire a minority stake in the business, and negotiations reached an advanced stage. However no deal was agreed and instead i-level sold a 60% shareholding to private equity fund ECI in April 2008 for around £45m. Pattison shifted to a non-executive role as chairman at the end of 2008, and Stephen Rust was appointed as group CEO.
For the year to March 2008, i-level reported turnover of just under £100m, gross profit of £13.1m and a net profit of £4.6m. It was all downhill from then on. Revenues and profits both fell in ye 2009, and then the agency's stability was severely damaged by the loss of the digital media account for all government advertising in March 2010. By then that business - which transferred to a WPP consortium in April 2010 - accounted for as much as 40% of the company's turnover and half of profits. Just under a third of i-level's 150 staff were directly employed on the account.
Attempts were made to restructure the business and broaden its remit, but in early May, i-level was forced to call in administrators. A key factor in the effective collapse of the business was the nature of the private equity deal struck with ECI, which loaded i-level with £32m of debt, much of which carried an exorbitant interest rate of 12%, obliging the company to earn at least £3m of profits annually simply to pay off its finance bill. Social media unit Jam was promptly sold to Engine Group, and just two days after the appointment of administrators, all i-level's remaining staff were made redundant, its clients were transferred to other agencies and the business was put into liquidation.
Last full revision 16th January 2018
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