UK AGENCIES

Should UK agencies outsource?

For some time, the online advertising agencies have clung on to an in-house, holistic model of production where coders and creatives sit side by side. Yet, now the digital industry and its new wave of start-ups are beginning to take their lead from traditional advertising agencies (much as they would hate to admit it), and are opting to outsource instead. 

Keeping production in-house is undoubtedly lucrative, giving agencies a far larger net income, but the margins are relatively slim.

Although some shops are only taking tentative steps, opting for a hybrid model. Some say these young agencies are only outsourcing because it is financially impossible for them to have all the relevant skills on their payroll. However, some insist that outsourcing is vital to strategic integrity, ensuring that clients are not force-fed solutions premeditated by an agency’s financial needs or digital production capabilities. 

Outsourcing does afford agencies the flexibility to cherry-pick the best talent as and when the client requires, which is proving particularly attractive to traditional advertising shops that want to get into the digital act without having to go on an online recruitment spree.

The best benefit of outsourcing is that you don’t have to carry an overhead that you need to keep feeding, which means you can take on a lot more work.

“The best creative work comes from collaboration with the best production partners all over the world. No agency can credibly cover all the areas of digital production in-house, from making films to deep coding, especially when the best people in digital production don’t want to work inside agencies any more. “Digital agencies can’t take the strategic high ground if their business model relies on building banners in-house.

“Clients have also caught on to the fact that it’s no longer credible or appropriate to pay London agency rates for standard assets when it’s far cheaper in Eastern Europe or beyond.”

“Just as we do in TV advertising, with digital and mobile we go to production companies to get best-in-breed where we need it. “We want to do the things that are interesting and creative, and outsource the things we don’t want to do. This makes us solution-agnostic. We give an overarching brand idea, and drive that across all channels. “Although there is money to be made in back-end supply, it is not something in this stage of our development that we are particularly interested in. It would be counter-cultural for us to have reams of people writing code.”

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