Full Service Digital Agencies For Dummies
She lit a burner on the stove and offered me a pipe
“I thought you’d never say hello,” she said
“You look like the silent type.”
- TANGLED UP IN BLUE
I’ve gotten a bit sidetracked. When I started this blog, I planned to post a lot more from the “Agency Perspective” but all the recent CMS activity has kept me busy. This post was the post I planned to write first as it helps to set the scene for things I’d like to talk about in the future. So, “Hello Everyone”. Welcome to my blog.
What is a Full Service Digital Agency?
Let’s start with just the Digital Agency part, and use Wikipedia for that:
A digital or new media agency is a business that delivers services for the creative and technical development of internet based products. These services range from the more generalist such as web design, e-mail marketing and microsites etc. to the more specialist such as viral campaigns, banner advertising, search engine optimisation, podcasting or widget development etc.
The million dollar question: What exactly is a Full Service Digital Agency? I’m going to take some liberties here and invent a new acronym: FSDA. Everyone and his dog seem to be one these days. New Media Age (NMA) tracks Agencies in their Top 100 Interactive Agencies list. I wouldn’t trust everything you read in here. Most of the numbers are volunteered by the agencies themselves, so you’re never quite sure how reliable they are. One interesting aside – the agencies have to put themselves into one of three categories: Marketing, Design & Build or Technical. Quite a few of the agencies listed would love to pick more than one of these, but you are forced to choose. Rules is rules. As a techie, I’d prefer to see us listed as “Design & Build”, but that does seem to exclude many of the other services we offer. So we’re listed as Marketing. I’m a marketeer now, I guess.
As most of you know, I work for LBi in the London office (for the purposes of this post, I’m only going to talk about the UK market in isolation, although in reality I spend a fair bit of my time working with the other offices in the network). We call ourselves “The Largest Full Service Digital Agency in the UK”. I’m going to off-brand and say we’re quite possibly also the smallest Full Service Digital Agency in the UK, if indeed it is possible to be Full Service at all. For the record, the 2008 Top 10 Agencies (by Turnover) is shown above. We’re the biggest by headcount in this list but, as I said, some of the numbers in here might be crap. The LBi headcount numbers are correct. I’ll post more about these numbers some other time. We’ve got about 350 permanent employees in the UK.
What are the services?
So, what do all of these people do in an FSDA? By definition, everything digital. I’m not going to attempt to say what this is, but I will outline what my agency does by listing all the departments in our London office. To stop myself rambling, I’ve decided on a self-imposed 140 character limit per department. All you crazy people can tweet the definitions to your friends. Or tweet me better definitions if you don’t like mine. Especially if you’re from LBi and I’ve insulted your department. I haven’t mentioned User Centered Design here as this is a key philosophy that spans all departments. In a vague project order:
- Planning & Strategy – Consultancy, Business Plans, financial models, requirements, user research/testing, personas, planning and buying
- Experience Architecture – Information architecture (sitemaps, taxonomy), requirements, wireframes, usability
- Concept & Design – The Officially Creative People. Concepting, Design, making things look pretty, copy writing, win lots of awards
- Technology - Architecture, Product Selections, Interface Dev (CSS/HTML/JS), App Dev (Java/C#), RIA (Flash, Adobe), Testing, QA
- Managed Services – Live projects. Hosting, maintenance, monitoring, application support, incremental development, tickets, help desks
- Media - Where to spend your online media budget, keywords to bid on, place ads. Campaigns, email marketing, outbound email comms
- SEO - Get you into the first page of Google organically. Analyse algorithms. Semantic markup, crafted content, link building. Analytics.
- Delivery Management – Ensure projects are delivered, as usual, on time and under budget. Producers, Project and Programme Managers
- Client Services – Keep existing clients sweet and “grow” accounts. New Business Development (Sales) and Account Management. Play Golf
That’s 9 different departments. Within each department, things can get even more specialised. For example, our Technology department is split into 3 sub-departments: Technical Architecture, Quality Assurance and Development. The Development Department is split into Interface Development, Rich Internet Applications, Microsoft and Java. Within each of these, things get even more specialised. As the interwebs mature and spread, the number of technologies we need to be expert in continues to grow. And it isn’t going to converge any time soon. Other departments specialise in a similar way. Note that these departmental divisions are often more of an organisational need then a working reality. We try to get our teams to blend well together and many individuals could easily fit in to many of the little boxes on the org chart.
Does Size Matter?
Ignoring our internal “Core Services” (HR, Finance, Operations, Resourcing, Office Services, Marketing and Upper Management) which every company has to have, I’m told, we’ve probably got a shade over 300 “project work” people in our London office. The rough breakdown of department size by headcount looks something like this:
The information isn’t top secret, in case anyone was wondering. We disclose it on our NMA Listing (albeit mapped to their categories). When you break it down like this, an uber-agency of 350 people suddenly has less than 40 project managers (which means less than 40 active projects), under 60 designers, and less than 80 techie nerds like me. Which brings me to my point. In order to provide all the services we need to provide in order to be a credible FSDA, we couldn’t be any smaller. I’d say that any company under 300 people cannot begin to claim to be an FSDA.
It is also interesting, referring back to the Top 5 from the NMA list, that all of them have a similar number of employees. Why aren’t there any agencies with more than 400 people? The short answer – because it is difficult to keep the “agency vibe” using the structures needed to manage a massive company. The larger agencies are not trying to be like the big IT services/consultancies (Atos, Deloitte, KPMG, Accenture, Fujitsu, Cap Gemini, PWC, Wipro etc). They’re trying to behave more like a “boutique”, while maintaining the scale, professionalism and expertise needed to service the major accounts.
Neil Potter from RedWeb (another FSDA) blogged about FSDAs recently on his excellent blog . He argues that the LBi view of full service (a one stop shop that can provide everything) is outdated. While I do agree that being truly full service is probably impossible, I think a handful of agencies (in the UK) get pretty close. Neil’s blog entry says:
As Richard Sedley, Director of cScape Customer Engagement Unit and Course Director for Social Media at Chartered Institute of Marketing, told me “Today you can be full service with a limited focused offering”. I like this. “Full service” doesn’t have to mean jack of all trades. In fact, it shouldn’t mean that at all. Nowadays clients need specialists; people who know their discipline intimately and who can work with the client from conception of the idea to delivering the end product, and then studying its performance. This is where the real skill and expertise comes in.
I don’t understand the quote from Richard Sedley. Full Service does not mean “limited focused offering”. Can anyone shed any light on this for me? I agree with the rest. Of course Full Service doesn’t mean jack of all trades. Of course you need specialists. You need lots of them. You need more than 300 employees to have them, too. Yes, size matters.
You didn’t answer the question!
Sorry. In closing, I’ll define an FSDA as a Digital Agency that provides all the services you need – a one stop shop. Of course there will be gaps in the offerings, but the FSDA should have partners to help plug these. Often customers will only engage an FSDA to perform a small subset of their services. This can be a very sensible “avoid all eggs in one basket” strategy, or they already have specialist agencies with which they’re very happy. In these cases, the various agencies on the account need to work closely together. Other customers will choose to use all of the services offered as they see benefits gained when different disciplines blend. Or they just want one agency to shout at if things go tits up.
Some parts of an FSDA compete with more traditional above the line marketing agencies. Other parts (like mine) will compete with pure play systems integrators, although it looks to me like the SIs are trying to become more like agencies these days, introducing elements of the User Centered Design process into their traditionally purely technically offering.
Seeing as I’ve been agency-side for the last 10 years, I’ve got a decent understanding of most of the disciplines. But of course I know most about the technical ones, and that is what I plan to use this blog to talk about. If you do have any particular burning issues you’d like me to focus on, please let me know. Nothing quite like pandering to a non-existent audience …
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I suspect that as the numbers grow in particular agency so does the list of disciplines that make up an agency in order to be able to keep track of the people in it. So on the technology side, it becomes development, database, architechture etc etc. The creative guys spin out into specific industry focussed brands – Look at the big agencies like WPP or Omnicom – there are myriads of small brands the make up the network or company.
Are these all a one stop shop despite being different companies? I suspect they are just as much as LBI – I am sure that internal department heads all have their own P&L targets and projects are cross charged between departments.
I am sure the smaller guys will also claim they are full service as they see it as a term that makes the clients feel more comfortable about hiring them and importantly, it lets them talk about any possible lead with the client – I know, I’ve been there. Actually a lot of them would be better off becoming highly specialised and non-FSDA, if I can say that. Billing rates go up, and demand for their services can do so as well, with the correct marketing and networking. However, when you are small and need the money and clients and are not well capitalised there is huge pressure to find any piece of work that passes in front of you – it’s about survival.
I find the NMA list very distracting – surely companies like Cap Gemini and Accenture should be on there as well? Maybe I am cynical but I think the list is designed around the companies that buy NMA – there is a certain amount of ego stroking going on as in “hey we moved up from 15 to 12 – we must be doing something right”. Self certification as well? Who cares what postion you are in. The question is are you making a profit? are the shareholders getting good returns? Assuming these the client will be getting a good service as well. Maybe I am being harsh though.
Rory,
Thanks again for the comments. I think you’re right about the NMA list. I don’t think the rankings mean much, but at least they provide a list of agencies. WPP is an interesting one. They have 4 in the top 100, and that excludes Ogilvy Interactive and Wunderman. Don’t even have staff numbers for those. Omnicon have 5, excluding Tribal DDB and Weapon7, who don’t declare their turnover. I think the difference between LBi and the consortiums is that we do try harder to integrate the disciplines. Having everyone in the same building helps. Of course the consortiums co-operate between their sub-brands (especially on bids and things), but I don’t think the smaller companies in their groups get the benefit of scale that the Top 5 get.
I don’t think Cap Gemini, Accenture and the rest should be on here. They’re very different. The budgets for their projects are normally at least an order of magnitude bigger that someone like LBi. Accenture have 180,000 staff worldwide. LBi have less than 3000, I think. Accenture generated over US$20 billion last year. Completely different kind of company.
I agree that some of the smaller shops may be better off becoming highly specialised. Things like SEO are a prime example of that. Then the good ones get bought. Our SEO department is the company formally known as Netrank. So we get the specialised expertise and, in theory, the whole becomes greater than the sum of the parts. It’s good getting a specialised SEO agency to audit your site and improve the rankings. But it is even better when they’re involved from the beginning to ensure you thing you design and build will make their life easy. Similarly for other specialist disciplines.
I think it is also how you define agency – I think both WPP and Omnicom would be viewed as agencies as would their sub-companies even though the parent companies revenue are about the same as CapGemini. Where as neither Microsoft (Conchango) nor Bae (Detica) would be viewed as agencies whereas their subsiduaries are. If CapGemini were to buy an agency on that list and integrate them they could certainly be viewed as a full service agency and would be direct competition to the players on that list.
Interestingly from a financial perspective the markets view WPP/Omnicom type agencies as significantly less valuable than the more technical ones like Atos Origin, Wipro, Cap Gemini. Mixed agencies such as LBi and Sapient(6500 staff versus LBi’s 1600) fall in between the two.
I think specialism is definitely a route a lot of the smaller ones should look at. The problem is that it takes significantly more work and courage to go that route, not to mention funding in the start-up phases.
Nice post Jon! – I’ve had all sorts of feedback from my Post on this subject – even some interesting view points from your fellow colleagues at LBi!
I think Richards’s description of a full service agency having a limited focus offering could spark a lot of debate. He’s going down the route that every agency should be a specialist in their own discipline (whether that’s design & build, Search etc.) but not necessarily operate in all key areas (like some the 9 you mention above). Take Webcredible for example, they could position themselves as a full service user experience agency, or Bigmouth Media as a full service Search agency. It’s an interesting concept which I personally believe has more meaning than the ‘one stop shop’ scenario. (I am going to point him in the direction of this post to air his much more expert opinion than mine!!!).
The NMA listing debate is a funny one and in my opinion, it’s often far off the mark. Some Agencies (although not meant to) include clients media spend in their turnover to boost their position. A bit underhand as the money never really touches their pocket before being spent on search engines and advertising. Apparently they’re going to be clamping down on it next year so there may be some big changes in the positioning…
Thanks for the clarification, Neil. That all makes perfect sense. I can even buy “Full Service [Search|User Experience|Other] Agency” label. And in many cases it might make more sense that the one-stop-shop proposition of the larger agencies.
But I do think that there are other cases when having everything under one roof has massive advantages. The lines between the disciplines are becoming more and more hazy. Take Search, for example. Apart from the specialist search activities, which of the following do you think a Search Agency such as Bigmouth Media get involved in:
* The business planning/strategy phase to help predict increased revenue to do increased search driven traffic
* The Information Architecture / Wireframes to ensure the URL structure makes sense, and that each page has the correct levels of headings
* Designing the site to make sure it has a healthy amount of textual content and other elements determined at design time.
* Writing the copy to ensure it is search engine friendly
* Building the client side markup to ensure it is semantically correct and search engine friendly
Sometimes I do have a crisis of confidence and decide that this whole Full Service thing is a terrible idea. But when we work with external Search|Usability|Other agencies (who are, don’t get me wrong, very good) I start to remember how useful having all the disciplines working together really can be.
I do plan to write a “Is Full Service a good idea” post at some point too. Feel free to write that one first
It’s also interesting to look at it from the other side. A lot of the clients that the FSDAs work with will happily shop around amongst agencies depending on the project – and often within a single project.
For instance – the project I am currently working on involves at least 3 different agencies (at least one of which is Full Service) along with a ‘trad’ consultancy, a branding agency and a SEO company. Not to mention a raft of other integration/technology/infrastructure partners the client has who have some connection to the work. This is not rare, this is typical.
In fact, it is surprisingly rare for a FSDA employed to provide full service for any individual client!
@Jon Marks – I totally agree that the lines between disciplines are becoming a grey area and I too often think that diluting a core skill set with subsidiary offerings isn’t the best way to go. The idea of a “full service Specialist” is very contradictory, yet I still stand by my original thoughts that is is far more sophisticated than the ‘one stop shop’ idea.
I’ll have a think about the “Is Full Service a good idea” post – I’ve got some opinions to share!
@Marcus A – Totally agree about collaboration. But Trad agencies and branding agencies have never and will never, fall under the full service “digital” agency umbrella.
Nice piece Jon. At the risk of blowing my own trumpet, the article here, http://lbiq.lbi.co.uk/wp-content/uploads/2008/09/lbiq_1.pdf, pp 71-73, covers similar ground, and has a pop at the “Is Full Service a good idea?” question, from a client services POV – my own background. In that world, as this piece points out, money and control are the two most important parts of the mix, often completely regardless of the individuals and organisations best suited to do the actual work; and that battle for cash and contract comes at a price. When separate agencies are fighting for it, the client tends to pay; in a full service digital agency, the agency pays (albeit using client revenue, but at a margin cost). This argument – reduced client PM overhead, reduced switching cost between different agencies and increased focus on client service (rather than on inter-agency feuding for client dollars) – is still, for me, the strongest case to be made for the one stop shop.
Well, Dom, your trumpet deserved to be blown. That’s an excellent article. And it’s written far better than the one I might still write. Cowering in your shadow and all that. I encourage my faithful hordes of readers to follow Dom’s link and read his article.
And it is pages 71-73 of the printed version, not of the PDF. It’s from LBiQ, our quarterly print publication, so is a bit of a plug. And shame on me for not reading it before …
Agreed – excellent article Dom, really enjoyed reading that.
[...] some good writing from the agency perspective, I encourage you to take a look at Full Service Digital Agencies For Dummies by Jon Marks at LBi or The Digital Agency Blog by Neil Potter at [...]
[...] Full Service Digital Agencies For Dummies | Jon On TechNew Media Age (NMA) tracks Agencies in their Top 100 Interactive Agencies list. I wouldn’t trust everything you read in here. Most of the numbers are volunteered by the agencies themselves, so you’re never quite sure how reliable they are. … Jon Marks… [...]
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