“With new technology driving rapidly changing consumer behavior, continuous digital transformation is imperative”
- Being unable to expand your client offerings is limiting
- Clients expect more from a technological standpoint.
- Product Design Budgets are beefier
- Agencies are beginning to invest in technological education to level the playing field.
In a fast moving digital economy, speed is everything.
New technology is changing the way consumers behave. According to a study conducted by Smith & Beta, “62 percent of agencies report clients are asking for more advanced digital work, but over 43 percent of respondents feel inadequately prepared to provide such work.”
The Times They Are a Changin’
Some agencies sensing the change in the wind have started to focus on diversifying their product services rather than sticking to single stream of revenue. Despite being able to repackage some of their services and creating pseudo-diversified revenue streams, they are still susceptible to the same scalability problems they faced before. No matter how you spin it, you’re still consulting, or designing, or branding, and winning new business and hiring staff to work on new projects means when you lose a client the hires are shown the door just as quick. Rather than building a revolving door to facilitate this turnover, truly diversifying means offering something you couldn’t, or didn’t, offer before.
“I think that lots of agencies can design a product, but they don’t have the engineering to build a product. Of those that can, I don’t think many have, because it’s just hard.”
– Jules Ehrhardt, ustwo
In the case of a design agency, it means having the resources to say ‘We can design this product beautifully, and we also have the quality engineering to build it’. No matter how well practised your hand over procedures are, the raw efficiency of being able to offer full spectrum product development makes you that much more attractive than those that don’t – not to mention handovers themselves can also be incredibly risky. The product development team will be responsible for the final product and if the execution is not up to par, the quality design you’ve invested a lot of effort into is all but wasted.
For the client this makes eminent sense. This should be obvious.
Sometimes Business Needs Must Supercede Creative.
When we talk about design, we think of it as art. We do. As creatives we want our creativity to be considered as such, but when we talk about products, we need to limit the abstraction. Boundless creativity might feel great to be spinning, but nothing kills your flair like economic downturns that slash advertising and creative budgets. A company can’t pay it’s staff with ideas alone.
Generally, the budgets for products are bigger, and not frozen as readily as marketing budgets. Gone are the days of Agency of Records and lucrative decade long deals, we need to look at how to prolong engagements with clients. Product design lifecycles are longer than design lifecycles, meaning projects are now worth 6 months to 2 years. Consumers have higher expectations and according to Wendy Clark of DDB, clients ‘need partners that are built on a marketplace of speed.’ The common denominator in all of this is rapid execution. If you are slow you will drown. Welcome to the digital economy.
Back to Reality
This is all fantastic in theory. The harsh reality is that being able to add a digital product development arm to your business requires a rather large initial investment. Agencies can turn to boutique development studios too but finding the good ones who operate in the vertical your client does is hard work. For a design agency, assessing prospective collaborators is hard, because if it’s you organising the development part of the product, it’s your name and business that will be let down if your tech partner doesn’t execute the product to your client’s satisfaction. At least when the client has to source their own engineers the onus is firmly on them. Product agency reputation falls with their design excellence and their product development prowess. Ultimately thinking about the end result from the very beginning means better products, as ‘until design touches the code, the user, and reality, you’re not going to have the feedback you need to improve and iterate the design.’
The Heart of the Matter
Agencies focusing on ensuring digital fluency and being able to match client demands are investing heavily in educational programming for staff, promoting experimentation, making, and perhaps most important, understanding digital trends and technologies. Giants like Ogilvy & Mather are realising just how important being digitally savvy is to creative agencies, their NYC president Adam Tucker explained in Adweek that ‘digital must be at the heart of any idea we create.’