an existing business model for digital agencies

13 May, 2009 • posts i've written • 10 comments

Mike just wrote a post on a new business model for digital agencies that’s getting a ton of great feedback.

Here’s Mike’s basic idea:

I want to see a new digital agency model that sells a package of 100 small digital experiences, that can each be executed quickly and cheaply, instead of selling the 1 big digital experience.

When this agency pitches clients, you don’t pitch one big idea, you pitch the first 10 small ideas. You say these are the first 10 ideas we’re going to build, and there are 90 more where that came from. For $500,000, we will concept and execute 100 ideas over 10 weeks. These ideas will each be designed to spread your message, attract the attention of your desired audience, build relationships, and compel action, if applicable.

It’s a brave idea, but one I think would be impossible to scale. When you have 5 clients, you’re expected to dream up and build fifty fairly unique ideas per week. With the way design and development is often highly fractured in most agencies, the time it would take to communicate a vision (even for the slimmest experience) would halt this kind of rapid process. Also, the output here would create 100 floating corpses by the end of the 10 weeks; there’s no demand on continual refinement and evolution, something that is absolutely necessary for building interactions, engagement, and ultimately relationships. (I’ve learned this bit the hard way)

Even though I take issue with Mike’s plan, I agree with the spirit of the idea. Agencies should be creating more. The relationship between agency and brand should extract the full talent of the creative team for the price being paid – which almost never happens. Hungry agencies charge too little for brilliant execution and lazy agencies charge too much for mediocre drivel. Meanwhile, the talent of the best people is being wasted.

Here’s the good news: there is an existing business model for digital agencies that rocks – it’s the model of building your own brands and products. Companies like Coudal Partners in Chicago, and Anomaly here in NYC, are practiced at testing the mettle of their own ideas by actually launching them.

Layer Tennis, by Coudal, is a perfect example to dissect. Layer Tennis is basically two designers passing back and forth a Photoshop file in 15 minute intervals, trying to one up each other. That’s how it started anyway. It has since grown a bit in terms of media (now there’s animation, too), and it has certainly become a big draw for the design audience every Friday. Layer Tennis seemed like a good idea, so Jim and the crew just did it. Adobe took notice and brought some advertising/sponsorship dollars to the table. (Any of Anomaly’s projects are great case studies, too)

A lot of agencies seem to be adopting this practice, and I’m happy to see it. When the vision for something comes from within an agency, I trust the care and feeding of that idea to the originator for as long as possible. Layer Tennis could have been ruined if it had been handed off directly to Adobe from day one.

Thoughts? leave em below. Also, drop a line on any project you’re currently incubating.