February 3, 2021 7 min read
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As part of the management team of several creative agencies throughout my career, I can remember having conversations about whether we could afford to take on a small, low-paying client that wanted us to help them establish and effectively amplify their brand. Unfortunately, I don’t ever remember the answer being “yes.” We always had to politely decline because we had overhead costs and margins that simply made it unprofitable.
Let’s face it, big agencies need big dollars to do what they do. Their business model requires significant infrastructure to service their clients: office space, equipment, department heads, agency management, human resources, technology, benefits, etc. — even the occasional foosball table. These agencies haven’t been able to unchain themselves from these anchors that act like a game of Hungry Hippos gobbling up profit.
What this means is that many of the most experienced and talented strategic, creative, and executional marketing minds are quarantined inside these agencies, completely inaccessible to smaller brands and start-ups that can’t pay the price. Small brands are given the Heisman to the kind of marketing and creative thinking that can help them compete.
Luckily, this is changing, and this playing field between the rich and powerful, and the small and hopeful, is beginning to level.
That’s because the infrastructure that used to be the traditional agency’s strength, is now its Achilles heel — possibly becoming its toe tag.
That’s because those fixed costs aren’t going away. Yet agency clients, in their own attempt to reduce costs, especially in these times of COVID, are cutting their fees. Which means the only recourse for agencies is to trim the one expendable asset they have: talent.
Agencies are being forced to compromise
Talent is an agency’s most important asset. Without it, there is no product. David Ogilvy famously said, “An agency’s assets go down the elevator every night.” So trimming talent means compromising the product. And a compromised agency product means you’re likely to see even fewer assets going back up the elevator the next morning.
So in an effort to hold on to their relevance as an important resource for brands, while still trying to maintain profit margins, many agencies have decided to eliminate the higher-priced and more experienced talent in favor of younger, less experienced ones. It’s cheaper, for sure, but this inexperience is also less precise, slower, and needs more supervision. And, unfortunately for the future of agencies, it’s a ding to overall product quality.
There are new opportunities for smaller brands
But as they say, when one door closes, another one opens. And while it’s not a door that’s opening for agencies, it’s a great big door that’s opening for brands, especially smaller ones.
It used to be that when experienced people left an agency they became freelancers and simply made a u-turn and looped back to working for agencies. Agencies would hire back these people, now as freelancers, thereby getting their talent and experience while avoiding a lot of the ongoing costs of full-time employees.
But over time, as more experienced people were forced out of the agency system — or simply left of their own accord because they were fed up with the lack of progress adapting to the new world — this began to change. Suddenly, some of the most experienced talent decided to bypass the agencies that abandoned them and offer their talent and expertise directly to clients, thereby creating a whole new world of opportunity. A world that offered the very same excellence that was previously quarantined inside of traditional agencies, without the exorbitant cost, labored processes, and antiquated ways of working that made these agencies so tough to work with.
So what happened? Freelancers began forming collectives to work together when and if necessary. These collectives are a network of the same expert specialists you used to find, almost exclusively, bundled together inside a traditional agency. Now they’re each an independent contractor. So much like ordering off the à la carte menu at a restaurant, these collectives allow businesses to only use, and pay for, what they need. Without all the infrastructure they don’t.
Another piece of the puzzle that makes this collective model work is technology. Technology doesn’t only make it possible to work effectively from anywhere, it puts more tools at the collective’s fingertips. What used to require an outside vendor, or massive internal infrastructure, now simply needs a laptop. And individuals inside of a collective are taking advantage of this to offer brands access to marketing tools in a whole new way. All of which saves massive amounts of time and money, and can add massive amounts of content for brands.
Related: Reorienting: From the Individual to the Collective
Same talent, new options for using it
As this different model for delivering marketing communications and creativity grows, there are basically two variations on the theme. The first is a business that assembles a large collective, allowing brands to pick and choose from within a group — freelance talent can apply to join the business’s collective, get vetted, and then become part of a pool of available individuals. These businesses create specialty silos that are filled with talent with a particular expertise. Clients can work with an individual within a silo, or a team made up of talent from different silos that the business puts together based on the needs of the project.
Options like Working Not Working, Upwork, Been There Done That, Satellite Office, and Topcoder are excellent examples of this growing model.
The other variation is an individual who has developed working relationships with other individuals with different expertise. Clients can hire the individual and have access to his/her collective of talent and experience if and when needed. This model is a bit more intimate because it’s a smaller collective that uses relationships that have already worked together and know working styles well. In this case, vetting has occurred through on-the-job experience.
Options like great·er·est (full transparency, great·er·est is my business), Underhead (led by industry greats, Gary Goldsmith and Robert Reiser), and The Core Collective (led by other industry greats, John Doyle and Justin Bastien), are excellent examples of this version of the model.
Regardless of the approach, this collective model is made up of various specialists who are available if needed — writers, art directors, graphic designers, strategists, technologists, researchers, producers, musicians, video and film makers, etc. It’s an à la carte model of marketing and communications where brands only use and pay for what they need, without any of the overhead and inefficiency.
Related: Use Subcontractors to Build Your Business
Will the growth of this collective model replace the traditional agency? No, and it shouldn’t. There’s still an important place for creative agencies as they are today — if you can afford them. But this new à la carte model needs to be an option. Businesses of all shapes and size — especially smaller brands that have always been priced out of access to this kind of talent and experience — need to know they exist. This new option needs to grow as an alternative so that smaller brands, and even start-ups, can take advantage of world-class talent and experience.
These are exciting times. Not just for the ability to open creativity up to a broader array of businesses, but these collectives see value in, and are taking on, more kinds of marketing and communications projects. Projects that are too small for agencies. They are free to apply their creativity to more things.
Finally, talent and experience are taking precedent over structure again. And the benefits are boundless.