It is almost 10 years since I bought a sleepy little Newcastle ad agency and began a journey to create (what I hoped to be) a highly successful business. Along the way there have been plenty of twists and turns, some big victories and some big mistakes. It has been quite the learning experience.
One thing I realised along the way is that the old agency model isn’t a good one. Despite having different ways of packaging services most agencies, in reality, sell an hourly rate. While we all strive to profit from IP, we mostly trade time for money, albeit with a generous helping of expertise.
It can scale, but it doesn’t scale well.
Agencies win new business and hire more staff to service it. If they lose a chunk of business some of those staff are shown the door.
The old agency model is mostly built around making margin on employee hours. While agencies of all descriptions like to think they are selling creative, or whatever their intellectual special sauce is, the truth is the billing is mainly attached to the grunt work of the rest of the team.
The other big truth in agency land is that no agency is good at everything. It simply isn’t possible (or financially viable) to have the best talent for all agency services sitting under one roof.
I have long thought there had to be a better way.
As far back as 2008, when I was invited by Gavin Heaton and Drew McLellan to contribute to the book The Age of Conversation, I saw the potential for a new style of agency involving a network of experts in various fields. Here were 103 of the world’s leading marketers all collaborating on a project. Imagine the possibilities?! Gavin and I discussed it at the time but we weren’t quite ready, and some technology was missing to make it really work.
They say necessity is the mother of invention and that has proven to be true for me.
Over the last 18 months the agency has been fortunate to experience an exceptional run of wins and this growth has forced me to make some big decisions. My team and I sat down to examine our options. We could do what most agencies do; just keep hiring to service the new business, or we could totally change the way we do things and adopt a new model.
We chose change.
We realised that we have a talented (in-house) team of digital marketing strategists. Everyone has slightly different skills and we combine well to devise successful strategies for our clients. And there are a couple of areas where we are very, very good. That is our secret sauce.
But it is the delivery and execution of those strategies where we get stretched, especially as the new business wins pile up.
I had explored other “virtual team” options out of India, the Philippines etc, and even trialled some of the services but found them to be inconsistent in quality and reliability. Not good enough to trust with our clients.
I was also fascinated by the emerging move to a global freelance economy and knew there were hundreds of excellent people out there.
Then I came across a few “virtual” or “cloud-based” agencies that were emerging and started studying and talking to them. The most interesting one is (sort of) based in Sweden and New York and claims to have no employees. Leveraging the power of the cloud they created an international community of distributed teams working remotely to service clients around the world. They even wrote a book about it.
We decided to take a blended approach to this model in order to grow and scale our agency; a core team of digital strategists working with a global network of experts to assist clients anywhere.
We identified all the slow, time-consuming “grunt work” that needed to be done. We identified the service offerings we weren’t best at delivering. We identified all the bottlenecks in the business. Then we identified talented freelancers and industry experts around the world and asked them to join our team to help us deliver more efficiently. It wasn’t just about price, it was about quality and speed.
Steadily, we started distributing the work to our network team, allowing the core team to spend more time doing what we do best.
The result is that we now have a scalable model. We can take on more growth without having to constantly hire more employees, slow delivery to our clients or work ridiculous hours. If we lose a contract or experience a quiet period we don’t have to let good people go. Because our work is distributed to a network, the impacts on each are incremental, rather than overwhelming. If part of the network becomes overloaded we can add to the team.
We currently have a core team of 5 (it used to be larger but less efficient) here in Newcastle working supported by a very talented network team of 9 specialists located in Newcastle, Sydney, Perth, Canada and USA.
The network team is made up of web developers, an SEO specialist, search marketing experts, a content specialist and a finance guy. I even have an agency adviser / mentor to help me work through our own business strategies and manage transition and growth.
The network team isn’t just there for the “grunt work’, they also bring some seriously valuable expertise and experience to the agency. They help us solve more problems and deliver better solutions for our clients.
It seems to be no coincidence that as our network team has grown, so have our new business opportunities in other markets.
Sticky began as an agency servicing clients in Newcastle. As we moved into digital marketing we started winning business in Sydney, then Brisbane, then Melbourne and Auckland. Today we are working with clients in the USA and Europe. And, with the new structure, we’re doing it better than ever.
Sure, the new agency model is a work in progress. We can always improve and will continue to scout for more team members. Sure, we’ll need to add more people to the core team as the agency grows. But finally we seem to have a scalable agency model that works.
I believe that variations on this model are likely to be the future of business. It gives you both agility and size. In an increasingly globalised economy, utilising increasingly efficient cloud-based technology, your workforce can be located almost anywhere, delivering more solutions more efficiently.