Monday, December 03, 2007

Shock Horror! Doing Digital Is Not Efficient

In a recent article on BrandRepublic entitled The real stories behind adland's facts and figures,
Claire Beale has a look at the Willott Kingston Smith Agency Performance report to uncover some of the hidden, interesting stories.

You might think all the action is if you believe everyone else's hot air, gross income was higher than any other sector but margins are still lower than for any other discipline:a disappointing 8.7 per cent.

Given the youth of the agencies, without all the lard carried by more traditional agencies, you'd expect digital shops to be leaner and meaner and more efficient.

Clearly the general lack of ingrained management expertise across the sector means that the businesses are not being run at their optimum to take advantage of the current (and surely finite) opportunities to steal a march on traditional agencies.

I guess it would be interesting to see the performance of digital outfits in established agencies with this great management experience - albeit in a radically different environment. My hunch is that they would be at least on a par and possibly even worse.

The point she misses is that digital is harder and more labour intensive to develop. Most traditional guys can produce creative assets in their sleep, I used to. Digital doesn't work like that.

Imagine the work involved in developing a new ad format or actually building a new shop concept. It is tough, requires more people and goes wrong more often. For all the multi discipline T-shaped people it will only increase.

On the flip side digital media is, in most instances, much more efficient than traditional at reaching, selling and managing relationship with audiences. Maybe we need to think about different remuneration models.


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