Wasn't it just a few minutes ago we were asking if digital shops would be eliminating the need for traditional agencies?

Remember typesetting and film production houses? Same thing will happen to digital agencies who don't do their own production.

We've worked with the large agencies. They come to us for production and execution assignments that they can't handle efficiently for a variety of reasons. But they are connected to major multinational clients that we couldn't reach without them. So the involvement of the big digital agencies is beneficial to all - clients, subcontracted shops like ours, and the agencies themselves, who can retain business they'd otherwise put at risk.

Henry Blaufox
Oxclove Workshop
www.oxclove.com

As long as big digital agencies still showcase what smaller agencies have to offer (whether they hire smaller agencies or develop their own systems in house) they will always have the upper hand.

The cost efficiencies afforder by large agencies will be hard to ignore.

integrated multifaceted campaigns are the future

There is some wisdom in saying "you don't get fired for going with ".

Established agencies always hold a key advantage: Experience. Where it comes to working with huge companies, they also tend to have a better feel for working inside of corporate cultures over someone who, although very creative, does not have the background or experience to work within such a culture.

Also, there tends to be a wider selection on the menu with a larger firm and most larger companies like one stop shopping.

Of course, sometimes an unknown will hit one out of the park. As with many things in life and business, it is often about tempering risk and reward.

Marketers.Org

Hmm. "... for going with 'name your huge corporate name here'"

Do some of these smaller creative production-focused agencies deal with big clients directly? Sure.
Is it time to slim down the industry to more intimate relationships with the production agencies? Not yet.

Yes the more established agencies have the experience and the smaller newer agencies have the creative production. However, these smaller agencies have not been around long enough to have that level of power. Not they don't "deserve" it but because there's a reason the big boys have been around 50+ years.

I'm all for creative innovation but its not time to make the switch just yet.

What is "big"? "Small?" It's easy to think of One Big Client working with One Big Agency. But the real question isn't about behemoths staggering around a dance floor. It's about smaller groups of PEOPLE adroitly dancing together to create value for the client's brand.

But small shops must step beyond creative into branding strategy.

Give me a smaller, leaner, efficient shop tightly focused on long-term value every time.

Of course.. As long as these "little guys" are smart enough to be cheaper than the bigger shops, at least on the front end.

Is it any secret that they'll always be a market for new, less-expensive-than-the-other-guy services?

Even some of the very largest companies still have no clue how best to exploit things Digital, so the gazllion year old philosopy of "If it is cheaper it is better" will inevitably kick in, harming the early entry shops that created and profited from the mad clamor for this stuff in the first place.

They will until the economy improves and/or clients want the lower costs of larger shops with end to end production capability. It goes round & round.

It's not just the economy.
It's a question of who understands how users' expectation of digital products. At the moment, production values trump everything else because their little understanding of what motivates and closes a sale, let alone what builds meaningful relationship.

What is missed by almost all parties in the dance, is that there is little understanding of how consumers read, retail and react to their various experiences. The digital shops, for the most part, are glorified production houses, offering little in the way of meaningful strategic thinking or, more important an understanding of how people expect media to serve their interest. Which is to say little understanding of popular culture. (Which is to say they produced work they thought was cool or that they could sell to their clients.)

The new relationship suggests that the in-house "theorists" will dictate today's conventional wisdom to production houses, which will then executed these ideas using the newest applications and effect, with results that fail to justify the move.

But this is rather complex, so let's just say it's the economy.

It is not really about big and small. The market is wide open for digital agencies who can demonstrate ability to integrate the 4 key pillars of digital marketing:

(a) engagement (cool creative technologies)
(b) discovery (search)
(c) social (propagate within networks and outside)
(d) measurement (traffic + engagement + velocity of campaign)

As clients understanding of the medium matures, and the appetite grows beyond stand-alone exposure centric campaigns, be prepared to answer hard questions beyond clicks/views/stay-time. Smaller production houses need to evolve beyond delivering 'cool stuff'. larger Agencies need to look below the layer of the 'big idea', and discuss 'value'.

sandip@experiencecommerce.com

"We are small". We have been working directly with clients since 2002 with satisfaction, but the key is requiring a digital experienced leader to manage job effectively. Resources limitation is the fact for small shop, running high risk projects like too creative using immature digital solution is risky, that's why large agencies have advantages to take large project due to resources issue.

R&D is expensive in digital industry. Comparing to traditional agency, almost NO R&D at all, learn once, apply for long.

Therefore if small shop can do
1) R&D,
2) Having a "know every digital things" staff.
3) Corporate level of account servicing

Then will be able to replce large agencies. Which I only know 4 small to middle size firms can achieve these in Hong Kong. With that capabilities, that's why we can share the large pie from market.

Felix Leung
CEO of XON Communications Ltd