New Digital Agency Model
Although the technology is nothing particularly new, the new Modular Digital Agency model addresses the specific needs of small businesses like never before. Industry experts see it as a step in the right direction.
VIA PRweb — Amidst a painfully slow economic recovery in the service sector, which makes up more than 80 percent of the U.S. economy, small businesses are looking to minimize expenses while still increasing revenue. Advertising and marketing firms around the country are responding to these conflicting business objectives with new and more innovative business models of their own.
“Times are still tough for small businesses.” explains Jalane Pearcy, owner of a small, Dallas-based accounting firm. “When your back is against the wall, businesses tend to outsource, fire all but one accountant and they absolutely look at firing the marketing and advertising firm! What I hear over and over is the ‘Mad Men’ agency model is completely antiquated in this new economy.”
There is hope for digital agencies, however. JDM, a Dallas-based modular digital agency, is introducing the launch of a new digital agency model that successfully combines resold, white-labeled services though strategic partners and recurring revenue from end-clients.
“I have always struggled with the boutique model.” Says Paul Flowers, President of CIRCA 46 and best-selling author of Underdog Advertising. “They seem to live from project-to-project. As I understand it, the modular digital agency model is interesting because its approach is a hybrid between the project-based boutique and the full Agency of Record model.”
“The genesis for the new digital agency model was the answer to a simple question: ‘Tell me where it hurts and let me fix that pain. We’ll handle ongoing services once we’ve stopped the bleeding.” recalls Justin Downey, President of JDM. “JDM’s new digital agency model combines a la carte modular services that create digital assets and a suite of specialized retainer brands for ongoing marketing consulting, creative design, web technology, PR, support and long-term value.”
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There’s a really cool infographic on digital versus traditional. Worth a look: http://mashable.com/2011/10/30/inbound-outbound-marketing/
Don’t you think all your micro-brands are a little confusing? I get the model. I just question the use of 10 micro-brands…!
There are four micro-brands and I can see how’d they could get confusing, but that’s not the reaction we’ve been getting from the market–quite the opposite, actually.
The AOR (Agency of Record) model is broken!
In decades past, as both clients and their agencies got larger and larger, there were economies of scale to be had. And it made sense to consolidate work from dozens of small agencies to a single larger one, not only for consistency but also for cost savings. The upfront commitments of the AOR model enabled big agency groups to staff up to do the work.
But, times have changed. From a world where a single “big idea” creative would be used across a handful of channels like TV, print, or radio, we now live in a world where “digital” has introduced dozens of new channels, tactics, and disciplines – each of which require very different skills and experiences to execute well. Clients are increasingly turning to smaller agencies that actually have track records and hands-on experience in these digital disciplines, and turning away from big agencies who claim they can “do that too.”
I don’t think the AOR model is broken. It IS NOT the future, however. Our new digital agency model, as Paul Flowers puts it, is a ‘hybrid’. It is efficient, low-cost and robust–but DOES build-in room for recurring revenue for ongoing, retainer-based engagements (thought our Micro-Brands).
Most digital agencies rely on selling the execution of a big beautiful, usually flash-based, website. The more complex the site is, the more expensive it is, and the better it is for the agency’s business. But, the market for that business is disappearing.
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.
Here’s how I imagine it might work…
@Mike, I like your idea. I think it swings the pendulum the other way just a little bit too far, however. There will always be a market for that “one big digital experience.” But there is a growing market for the “thousands of little digital experiences” you envision.