The reinvention of digital agencies
The important lessons we learnt while developing our own product
Digital agencies have had to reinvent themselves these past 5 years. Those that didn’t perished under the threat of commoditised services and cheaper outsourcing. The agencies at the top of their game have had to completely rethink what value means and consistently work to ensure they’re constantly delivering it, often to clients that are hardwired through years of evolution to appreciate tangible and physical goods over more the abstract value that software or digital brings. We’ve been valuing atoms for millions of years, but valuing ‘bits’, is all new.
Time is expensive, it does have a cost. To justify that cost an agency’s time needs to be well spent, the billable person needs to be present, advisory, an expert, pragmatic and experienced. Time charged where the person isn’t all these is poor value. But how do you quantify this externally? Comparing a developer on £600 a day to a developer on £1000 a day is obviously more difficult and less tangible than comparing a £600 TV to a £1000 TV. We know how to buy and value solid goods.
That’s why buying time is insane. A solution can be found in 5 minutes while in the zone, which could take an entire morning without the right experience. The client doesn’t know what level of quality they’re getting, and agencies receive revenue on the most inappropriate and removed metric.
Agencies selling time can easily coast, but agencies selling value, uplift and progression are forced to deliver on promises. And that’s a good thing for both the client and the agency.
To fully appreciate this and ensure there’s a connection between the client and the agency, the agency needs to have experience in working on the client side.
This for us turned out to be a magnificent side benefit of building our own product. Yes, it’s every agency’s dream to build a product and enjoy repeat revenue through subscriptions, but additionally there is a wave of additional benefits that come with that. You become a better agency.
Over the last two years, Rawnet has been developing its own product, ONE, it quickly became much more than a side hustle and while still in its second year, has infiltrated the UK market for TV Distribution, with clients such as ITV and Sky as subscribers. The growth plans over the next few years look exciting, it’s quickly becoming its own entity and a serious business in its own right.
And we learned so much.
We learned that treating it as a ‘project’, was never going to work. Setting a dead-stop budget and MVP feature set wasn’t going to be realistic, and ultimately, we learned how to deliver products, not projects. Products need to be organic and fluid.
This is so important. All too often, clients approach agencies for projects. But successful products don’t fit nicely into a sequence of projects. They’re organic, they change, things can take longer, or are quicker, they can pivot and change direction. Because of the organic nature of product development, the end result is often infinitely better than the initial concept.
The concept needs to adapt, it needs to be fed ideas, strategy, research, feedback, time, workshops, features. It’s a living entity , not a project.
This is where the ‘old school’ agency model breaks. An agency working towards pre-conceived deliverables will do so in the most cost-effective manner. New ideas are kicked into phase 2. Improvements need to be pitched for, it just doesn’t work.
This is more or less the main argument for building in-house teams. But as anyone who’s been agency vs client side will tell you, the client side is a breeze. Agencies are fast-paced, they have to be. It is, therefore, a total false economy.
For something to grow organically, it needs to be treated organically. Both sides need the flexibility to innovate. Project Management methodologies, initially set up to protect both agency and client, actually kill innovation.
This was our major learning point. And we’ve been constantly adapting our approach towards client work to drive this change. We believe the current models are flawed, be that strict agile, or strict waterfall.
Waterfall doesn’t allow for incremental improvements, agile doesn’t push the agency hard enough and forces the client to buy time, not value.
So yes, agencies have changed, and the new change for the next 5 years isn’t in what they offer, it’s how they offer it. All good agencies have updated their service offering and their proposition, but many remain loyal to methodologies that don’t suit organic, fluid and forever improving, innovative products and services.
We’d have never learned this until simultaneously trying to run a profitable agency and create a best in class product, and we now enlighten our clients on more imaginative ways of working, enabling them to extract the most value from us, which is where we need to be to continue our and their successes.