Work comes in several forms. Many digital services are project-driven. They have a starting line and a finish line, allowing for modest maintenance on larger sites. Add to that how large advertisers are often hiring small agencies for a mix of traditional ad projects -- to develop a new TV campaign; or to create a print template that they can buyout and re-purpose in-house -- as well as digital ones. These large advertisers usually have one or two global shops, and a few smaller agencies that are just as smart, but also more nimble and affordable. Perfect for agencies that welcome and are structured for such projects.
Then there are branding assignments -- when an agency is hired to help a marketer figure out its message, along with a new look at its branding elements (logo, color palette, fonts, guidelines, etc). These are almost always projects, as they have a finish line once the deliverables are, well, delivered.
There is still public relations. Ah, the home of the natural monthly retainer. For most PR engagements, it is a business that demands steady thinking, pitching, consulting, reporting, writing, monitoring, and repeating the whole cycle again. Daily. Very tough to turn the PR switch off and on, as a project-driven financial structure would dictate.
I won't comment on why much of an agency's compensation has shifted from monthly fees to project-based ones. That is a whole posting unto itself. And I believe it has been addressed by others in this space. What I prefer to discuss now is how to prepare your agency to thrive in a largely project-based world.
I wouldn't accept a project without implementing the following:
1. Shift Your Culture. If your shop is still living in a monthly-fee mindset but is living on less that 100% monthly fees, you need to change the way you think. Like it or not, projects have to be embraced like you would any piece of new business. Make certain your project-management team is poised to churn out timely, accurate estimates at a greater volume than ever before. Make certain your team welcomes this kind of business with equal passion -- some of the best creative comes from the short-term opportunities. And be prepared: Some companies are asking shops to pitch for projects, the way you would pitch for a long-term retainer relationship. It's far from ideal, but it's business. And if you want it, you have to play ball.
2. Shift Your Budgeting. It's a whole new ballgame for shops that used to be able to forecast revenue 12 months in advance. What a luxury that was! Now you have, maybe, a three-month window into what your revenues will be. What we've done is benchmark three prior years' project revenues and use that to build out our financial forecast. It's not perfect, but it will get you close to knowing what you can afford, where and how much you can invest in the agency.
3. Shift Your Staffing. At Brownstein Group, we have a core team dedicated to our retainer clients and we also have a team that handles projects. Beyond that, we have talent that we work with year after year that we keep on call for overflow work. These are technically freelancers, but they work so closely with us that they integrate easily into our team and provide seamless thinking for our clients. You simply cannot afford to have excess staff today, while you sit and wait for the phone to ring with the next project.
4. Shift Your Approach. I touched on this above, but I want to underscore it: You need to approach all client new business the same way. Be proactive. Target clients that you want to work with. If you're asked to pitch a project, then carefully consider the pros and cons; once you do, and you decide to move forward, then attack it with the same tenacity that you would a long-term A.O.R. relationship. If you don't, then you will receive the results commensurate with your efforts.
Of course every agency wants to have 100% of its clients fully committed to them. Since that is rare, I believe it is an opportunity to show a broader range of clients what we can do for them. And if you perform exceptionally well, then that project could easily transform into a monthly marriage.