MAY 3, 2013

Defining a creative
agency
BRI AN PULLEN
This article references many great agencies as examples. Any opinions about these
agencies are my own thoughts and are used just to illustrate the concepts. I would be
happy to update this article based on feedback from the referenced agencies.
What is a creative agency?
If you work in the creative services industry, one of the hardest questions to
answer can be, what does your company do!". This is especially tough if it#s
asked by a friend or family member who knows very little about the world of
creative services. $ow do you answer that question while balancing the need
to be clear and concise with the desire to convey what makes it interesting and
challenging! This is the question of identity, and I think it is a central
challenge of building a business, particularly if the industry you work in is not
well defined. It#s much more than just explaining to your mom what you do
for a living, your identity helps you find your clients, gives direction to
employees and helps the business leaders create a vision for the future.
four factors that I think define an agency%
services, employees, business model and
values
In the process of building our own company, I#ve had to face this challenge
numerous times as we have reinvented &layground over the years. 'hile we
have always called ourselves a digital agency, I#ve always found it particularly
difficult to define what that really means. In a recent exercise I created a
framework to help me identify and categori(e agencies in an attempt to better
understand our own company and the industry we work in. I chose four factors
that I think define a company% )ervices, *mployees, +usiness ,odel and
-alues. +y analy(ing these four factors, I believe we can better understand
where the different types of service companies sit and how they compare to
each other. .or this process I#ve selected many of my favourite agencies and
have attempted to categori(e them, but keep in mind this is merely my
interpretation, some of these companies may see themselves differently.
The services
The first factor I want to explore is a company#s services. I think the services a
company offers can tell you a great deal about who they are. 'hat is
important to note is that while most agencies are very dynamic and will offer
a wide range of services, it is often a small list that they are very established in
and known for. Additionally, many companies will offer services that they
outsource / they do not have the capabilities for these in0house so I will only
mention those if the company is well known for that service.
I have broken the services offered by the creative industry into four categories%
)trategy, 1esign, Technology and Advertising. )trategy represents the
consulting, planning and research services. 1esign is the visual, 23,
photography and video services. Technology is the engineering, data and
systems services. Advertising is the promotional, &4 and marketing services.
1. Full Service Digital Agency
These agencies excel at executing on complex projects where many
disciplines are required. These are often the largest and most profitable
organi(ations within creative services. 'hile they have all four service
categories, it is often the advertising component that leads the business and
most projects serve larger campaigns or a marketing goal.
Top Full Service Agencies
45A
4a(orfish
6ritical ,ass
$uge
)apient 7itro
2. Digital Agency
These agencies are similar to full service agencies but most commonly they do
not offer full advertising services. This means that they focus on building
platforms or products over advertisements or microsites. These companies
prefer to focus on building lasting relationships with clients and help them
create and execute a digital strategy for their business. 1igital agencies focus
on )trategy, 1esign and Technology, and typically forgo advertising services.
A subset of the digital agency is something that I call a &roduct Agency. These
companies have the capability of digital agencies but often focus on creating
products both for themselves and clients.
Top Digital Agencies
+ig )paceship
.antasy Interactive
$ot )tudio
$appy 6og
6ode 8 Theory
Instrument
Top Digital Product Agencies
Teehan 9 :ax
;et 6ooper
,etalab
IA
3. Design Agency
These agencies focus on design and often work with external partners like ad
agencies, consultants or engineers to fully deploy their work. They often offer
both digital and print design services as well as branding speciali(ations and
sometimes interior and product design. As a result they focus on 1esign
services and occasionally offer some strategy services.
Top Design Agencies
Tolleson
&entagram
,iltonglaser
+ruce ,au
4. nteractive Agency
These agencies focus on building great projects for the web. They often are
hired to create digital experiences that are a mixture of innovative technology,
great design, and multimedia content. Although they are sometimes hired to
simply create a great website. They work with ad agencies or consultants to
deliver on a complex component of a campaign or a large digital project.
<ften these organi(ations focus on 1esign and Technology over )trategy and
Advertising and have a great deal more production capability in the form of
digital video and motion design.
Top nteractive Agencies
Ignitioncreative
4ally interactive
The )ecret :ocation
+lack 7egative
!. "ngineering Agency
These agencies focus on being technology experts. They offer engineering
services to companies of all si(es, partnering with in0house teams and other
agencies to build complex projects. They often work with many technologies
and platforms and solve some of the most complex technical challenges.
*ngineering agencies focus on Technology services and often offer
some )trategy services as they pertain to technology.
Top "ngineering Agencies
&ivotal labs
*xtreme labs
The 'orking 5roup
,ashery
#. Advertising Agency
These agencies focus purely on marketing and advertising services. They
prefer to work with specialist partners to build technology or complex design.
They are &4 companies, social specialists and traditional ad agencies. 'hile
traditional ad agencies often include many of the other services, they typically
focus on Advertising and )trategy.
Top Advertising Agencies
6&9+
'ieden 9 =ennedy
T+'A
:eo +urnett
$. %onsulting Agency
These agencies focus on strategy and big ideas. They often do a great deal of
research and speciali(e in particular markets and industries. These companies
can grow to become very large and often encompass professional and creative
services under one roof. 'hile they will often have 481 departments that
include many other services, their key offering to clients is )trategy.
Top %onsulting Agencies
1eloitte
,ckinsey
I+,
&. Design innovation
These agencies speciali(e in using design to solve big problems. They pair
deep insight and industry knowledge with design thinking to create some of
the most innovative products and ideas. These companies often include nearly
all services in order to prototype and deploy their ideas but focus on )trategy
and 1esign.
Top Design nnovation Agencies
.rog
Ideo
Adaptive &ath
)4I
'rgani(ation structure
'hile a company#s services can tell you a great deal about who they are,
understanding the employee makeup of a company and how it is lead also
plays a critical role. .or example, if a company offers both design and
engineering services but is made up of >?@ engineers then it would be
considered an engineering agency. An agency can also be defined by how it is
managed, a company lead by a creative director would be very different than
one lead by a technical director. 2nderstanding the key positions that make up
an agency and how it is lead is key in understanding the agency.
)anage*ent Positions
6*<
6.<
+usiness ,anager
6reative 1irector AadvertisingB
6reative 1irector AdigitalB
&roduct 1irector
2ser *xperience 1irector
Technical 1irector
Sta++ Positions
Art 1irector
5raphic 1esigner
.rontend *ngineer
)oftware *ngineer
23 designer
6onsultant
two companies that have the same
services and organi(ational structure may
be vastly different companies based on
their business model
,usiness and -illing *odels
2nderstanding the business model of your company is another key factor in
creating an identity. .or example, two companies that have the same services
and organi(ational structure may be vastly different companies based on their
business model. These two companies could both be equal parts design and
technology, both offer client services and have roughly the same number of
employees in each department. The difference is one makes C??@ of its
revenue from client work while the other makes over D?@ of its revenue from
an internal software product it sells. In this case these companies are
differentiated from each other on business model. )ince we are looking at the
creative services industry let#s explore the common business models in that
field.
Ti*e and *aterials
This is the most basic business model and often the one most used for simple
projects and smaller agencies. The principal is to charge an hourly rate for the
service you provide plus the cost of any materials purchased on behalf of the
client.
Pro.ect -ased
This model is used for the majority of small to medium si(e engagements
between clients and agencies. The idea is to agree on a price and scope of
work to be done over a set period of time. It can often be a fixed or variable
price based on the preference of both parties but is often based on time and
materials.
A'/ 0 long ter* contracts
This system is favoured by larger agencies as it provides stability and
predictable revenue. It works by a client committing to a minimum spend over
a period of time with an understanding of the type of work the agency is to do
and the goals of the client.
1alue -ased
-alue based billing allows an agency to capture the high value they create for
a client on what might be a relatively simple project. 2nlike project based
billing this is not based on time and materials, rather it is based on an
understanding of the value to the client and likely tied to some percentage of
that.
/evenue sharing and co**ission
This model allows for the agency to share in a percentage of revenue rather
than billing by time and materials. This is useful for long term partnerships
where the client needs to create an incentive for high quality work that can
increase revenues. It can also be used when complexity makes it difficult to
scope a project#s price or otherwise use another model.
nvesting
'ith this model an agency trades time for equity using their services to invest
in another company. +y investing time, an agency is paid through an
acquisition of their investment andEor dividends paid.
So+t2are as a service
This model allows an agency to create a software product that they sell. This
model is favoured as it has the potential to create non0linear growth in revenue
for the agency if the product is successful.
Patents
A less commonly used model is to patent concepts based on extensive 481.
This model is favored by the innovation companies as they are regularly
conducting research. These patents are often sold or licensed to other
companies.
Ac3uisition
Although not truly a business model, many companies seek acquisition as a
primary goal. This does affect the decisions they make and often how they
structure their company. )ince we are talking about service companies, most
acquisitions are to acquire people rather than technology or other assets.
values are often what differentiate
companies that are very similar
The values
The last factor that I believe defines a company is its values. 'hile not as
tangible as the other three factors values have a large impact on a company#s
identity. -alues are often what differentiate companies that are very similarF
they do not change what the company does, they often change a great deal
about who they are. 'hile not exhaustive, I have put together what I think are
the key categories of values that most agencies follow. The values at your
agency#s core determine a great deal about who you are.
%o**it*ent to custo*ers
An agency committed to clients is all about customer service and client
service. They focus on keeping their clients happy and preserving their
relationships.
%o**it*ent to e*ployees
A commitment to employees is about making a great workplace and the belief
that the best workplace creates the best work.
"thics and honesty
$onesty and ethics often manifest in an agency that focuses on pushing clients
to do what is right rather than what they want. They also highly value ethics in
all business practices.
Pro+ita-ility and gro2th
An agency that focuses on profitability makes decisions that will maximi(e
efficiency, margins and growing new business.
Social responsi-ility
An agency that focuses on social responsibility chooses people and projects
that will allow them to make a difference. They also focus on the way in
which they operate their company to be socially responsible.
nnovation and creativity
Agencies that focus on innovation put 481, prototyping and new ideas at the
forefront.
Adapta-ility
An agency with adaptability at its core is highly agile and flexible to change at
many levels. The company will try new ideas, services and clients regularly.
"4cellence and 3uality
Agencies with excellence at their core focus on the quality of their projects
above all else.
So 2hat is a creative agency?
It is a company that offers a combination of strategy, design, technology and
advertising services to clients, it is creative or expert lead, it#s made up
primarily of creative professionals, and it#s often strongly defined by values.
They come in many shapes but knowing what you are is very important to
growing as a company. Identity helps you understand what you are good at,
where you create value and where you are headed.