CR: Six weeks in, how are you finding things?
NP: There's been great reception by the client agencies and the production agencies, but, as with all large holding companies there's some navigation that needs to happen, and we're getting though it.
There's a view of offshore digital production as running banner sweatshops, with little wiggle room for creativity...what do you say to that?
NP: That's absolutely not the idea. The goal of Deliver is to do high-quality, fast to market work at a better-than-local price. So there's a labor arbitrage. The truth of the matter is the more interesting work where there's a requirement for greater creativity but also a significant labor arbitrage is dynamic banners, real media banners, and that is not sweatshop work—and I don't like the term sweatshop, but I think we know what we talking about here. The interesting thing about that, to do [the more creative] work there's a higher level of collaboration necessary between the two parties that are doing the work, on and offshore, however you want to think about that.
So what work would you say would be most likely to be assigned to shops in the Deliver model?
NP: A fair amount of work, so banner production, static and dynamic, web development, and email production. And fourthly, rich media, Flash, Silverlight kinds of work. More and more that work's coming together.
It seems like the deeper and deeper consumers will be able to be targeted the more iterations of the same creative concept will be required to reach that niche, and that's where an offshore operation becomes optimally efficient.
NP: Yeah, I think I'd present it on a couple of different dimensions. If you had a single banner that you wanted to run, one creative treatment that you want to run on a variety of sites, you would need a variety of different sizes. There's a set of permutations that you need. That's a pretty significant job. And then when you want to have different creative treatments for different demographics, it's exponential. So I absolutely agree with you.
What differences have you seen in the capabilities of different markets, say Costa Rica versus China versus India? Are there different skill sets that are native to different regions?
NP: It's hard to categorize how a single country is different than another country. They're very diverse places in and amongst themselves. I will say, I think it's important to understand what a particular agency, regardless of geography, is good at, and one of the value propositions that Deliver brings to the WPP agencies is we're going to understand the various producing agencies, both what they're good at today, and make sure those skills are accurately portrayed to the agencies, and secondly, help them evolve their business as they see fit, to cover a broader range.
So for example, there are agencies that are more creative and less creative; I don't think that being more creative and less creative has an enormous amount to do with what country they're in as much as what focus they wanted to take within that country.
So Deliver will work in a matchmaking role?
NP: It works both ways; we'll help the producing agencies, those groups who do the work, represent their capabilities to the various WPP agencies, and help the agencies pick amongst those. And in many cases there isn't overlap, particular agencies have focuses. We just have to make sure that's understood.
So if you pipeline or streamline work to these offshore agencies, what sort of training programs do you have in mind for places like Costa Rica in order to supply necessary talent?
NP: The idea is to work collaboratively with the producing agencies to realize where they want to go. I think the right way to do it is to be developing a series of training exercises that can be used in a couple of different ways. They can be used to train existing staff, and to think about it you can be an OOA developer level one, two, three, four, however that works, starting out at simple banner production and ending up at rich media implementations, let's say, with good instrumentation and analytics, tagging. Secondly, you can also use that through the interview process to understand where people are. It can be a combination of placement test and help, as you advance, and thirdly, understand where your staff is, to put that together. For some technologies, take HTML, those texts and frameworks exist. For things like online advertising production, they don't. So they'd have to be custom developed.
Do you see more Costa Rican educators, for instance, adapting to this draw?
NP: A number of our partners are working with local university systems to help tie together their needs with the educational programs that come through. Costa Rica in particular is a place where the universities there have courses that do the same; the same is true in Brazil.
And a major issue is time zones, correct? Costa Rica being on Central Standard Time?
NP: I truly believe you serve North America with South; you can serve Asia with Asia, just different cost markets. I think that's the big difference between what we're talking about and traditional IT outsourcing, the collaborative nature of our work is such that it's a much higher level of collaboration.
A lot of people say it's necessary with off-shore production to have their people on the ground during the last few weeks of production. How will that come into play?
NP: I think the more you're there the better. It's important in the beginning; collaboration is based on teamwork and that's built on spending time together. The teams have to feel like they're one team, no different than anything else. When you know people the collaboration level goes up. Many of the things that apply in one market apply in another, so getting people excited about the brands they work on, getting them branded material, whether it's cups, posters, the product itself, getting those kinds of things in the offshore locations makes a huge difference. Giving them some visibility to the team that they work with in the United States, whether that's the client or members of the client team, versing them on the brand, all that stuff is so important and it's what builds the framework and foundation for the collaboration. You want to go from a vendor relationship to a partner relationship to a true partnership, true collaboration. And that takes time.
So how will Deliver come in to the agency bidding/RFP process? Will it be as easy as a standard in-WPP rate card? Or will Deliver have to respond to RFPs similarly to other production companies and leave the agency and client room to select a different production partner? Or will the relationship between, for example, JWT and Deliver be established even further up the tree, as in when the agency wins the business?
NP: Our goal is to work with the WPP client agencies. To your point, exactly how we bid is collaborative with the client agency. We absolutely would pitch with them. How transparently it's priced is kind of up to the client and JWT. For example, as you know, sometimes there are retainers, sometimes there aren't; sometimes it's cost-plus - we'll support all of those models, however it makes sense for the client agency and the client.