We’re living in the digital golden age. So, what are you doing about it?
We’re living in the digital golden age. So, what are you doing about it? by Fred Roed (@fred_roed) I have an unshakable belief that we’re living, right now, in one of the most crazy awesome times in human history. I believe that in 100 years from now, people will look back at the turn of the 21st century and say “Dayam, I wish I lived then!” – sorta like we do now thinking back to the 60’s, or the Enlightenment, or the industrial revolution, or the 80’s. Na, just kidding – the 80’s sucked.
[pullquote]Scalable areas like media placement are becoming competitive and crowded, and more and more agencies are entering the arena. Often these new agencies are more energetic and better looking than us. Damn those little punks to hell.[/pullquote]
Think about it. We’re living in a time where digital communication is changing everything. You know that right? Of course you do. The question really is, what are you doing about it?
So, running an agency, as I do, the question becomes even more critical. I’m at the forefront of all this stuff. We get updates daily, hourly, every .minute, on new shit that’s getting done. Innovations, inventions, disruptions: these are the things that mark this amazing pocket of time called the digital age.
And what am I doing about it?
Part of the reality of running an agency is that the disruption has affected our business too. At the heart of most of what we do is selling time, and the Good Lawd knows, selling time is hard, thin-margin work at times.
Scalable areas like media placement are becoming competitive and crowded, and more and more agencies are entering the arena. Often these new agencies are more energetic and better looking than us. Damn those little punks to hell.
As I see it, there are three options for us agencies.
1. Become better at being an agency.
This means do great work, tighten up operations, watch spend, pull the levers of expenses and income, win new business and market the hell out of yourself. Ok ja fine, but is it enough? It means living in15%-20% margin territory and a handful of marquee clients where one or two phone calls can wipe out your returns. That’s cool if you’re doing a tidy revenue, but it has to be asked, in a ‘golden age’, is merely being a better agency satisfactory?
2. Go into business with your clients.
Yep, I’m sure this has run through many an agency owner’s mind. I remember a Heavy Chef Session 2 years ago where the inimitable Alistair King reflected upon the great work King James had done in putting Allan Gray on the financial services map. If they’d negotiated a 1% profit share from AG’s growth from their work, the revenue return would run into over a billion rand. However, this is not easy. It’s difficult to measure, and even harder to sustain. If you fail, the relationship will strain. If you succeed, the validity of the partnership is questioned. Certain things happen,like cash flow or capacity issues that dictate that you pursue quick wins; or culture conflicts and differences of strategic vision arise. These things can kill a marriage very quickly. It’s very seldom that agency / client profit-share partnerships are all fun and roses. We’ve tried it with an e-commerce website and it was an unmitigated disaster. Still… with the right project, in the right industry, with the right people, at the right time, I believe a good strategic partnership can be an attractive route for an agency.
3. Create products
Entrepreneurs know that selling time is easy, but thin on profit; whereas selling products is hard and risky, but rich on reward. In the back of every agency owner’s mind is to convert some part of his output into a sweet, beautiful, scalable product (if you deny this, you’re lying). The issue is that you have to find the time or investment to do this right. I’ve personally found the biggest challenge to creating products in my own agency is the lack of suitable product champions. In other words, entrepreneurs within the organization that will take on the product as his / her own business and make it fly. It’s very, very seldom that agencies get this right – and, to be honest, we still haven’t managed it, despite a few aborted attempts.
My agency turns 10 this year. We’re having a lot of fun and I believe that, for us, taking advantage of this historical golden age lies in a combination of the three factors above.
The first bit is a given. We’re already on our way. Part 2 and 3 are the harder bits, but we’re giving it a shot.
It will take time, it will be risky and we’ll undoubtedly stumble a few times.
It will also be worth it. In the year 2100 – when our cryogenically frozen selves look back to now – we will say: “Thank God we did something remarkable in that crazy time!”
– Fred Roed first started teaching people how to build their brands in the digital economy way back in 1998. Fred is currently the Creative Director and CEO of digital marketing agency World Wide Creative. Fred is also the co-founder of the Heavy Chef project, dedicated to demystifying digital marketing. Fred is obsessed with brand strategy and digital media – with side habits of pizza and Hawaiian shirts. Fred is also Head of Agencies at the Digital Media And Marketing Association. Follow on Twitter: @Fred_Roed
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