SoDA Speaks: A Talk With the Founders

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Kennedy, Wages, Wolff, Lent and Laker
Kennedy, Wages, Wolff, Lent and Laker
AUSTIN, TX -- Shortly after the announcement of the formation of SoDA, Creativity Online sat down with four of the founding members and executive director Steve Kennedy to get a better indication of how the group will attempt to impact the workings of digital agencies.

Creativity: So why create this organization now?

Steve Wages, CEO, Juxt Interactive: This business, as opposed to traditional advertising, is really, really process driven--—we're essentially building software. And so you have to go through this process and there are certain kinds of changes that are going to adversely affect the schedule. So a lot of times when we work with a client or an agency they'll come with the creative idea but won't have the content ready until maybe two, three weeks left in the project and really that's when they get started. We still need eight, nine weeks to build, and there's not a very clear understanding of how long it takes to build a project and what the steps are so the different parts can interface at the same time. So again, that's part of the education.

Jay Wolff, President, Odopod Inc.: That's an example of a situation in the broadcast business that would work, it's been working for years, but that just wouldn't work in the software building business. And that's an example of the educational gap we're trying to bridge, scaling challenges, start-stop.

Richard Lent, CEO, AgencyNet, SoDA chairman: Start-stop. We get start-stop a lot, where clients will engage us, and then they'll have a business change on their level, and they'll say, Hold on, time out. You can extend the deadline for three weeks. Well, we allocate those resources for that project, we have a commitment to them and as a byproduct they should commit to us. There's a lot of challenges with our business that we're trying to understand and trying to establish. Every industry in the world has this, but really nobody's talking about these issues. W3C [The World Wide Web Consortium] does an excellent job at standards, the 4A's does an excellent job at advertising issues, but who's talking about start-stop and software, who's talking about these challenges? No one.

Creativity: To use the AICP analog, that body protects production companies in a lot of different ways. How will SoDA do that?

Wolff: There are delay fees, postponement fees and kill fees that are standard in AICP production contracts that are not common in our industry. But agencies are used to them. The CFO at those agencies has seen those contracts for years. They just haven't seen it come out with the software business. And they don't understand that from the broadcast side you might plan to have a team on location for four days, but in the software business you secure a team for three or four months. And so we need those same kinds of things. The simple solution is to borrow some of those features from those contracts and do it ourselves in the same way, in a way an agency is used to and they understand.

Lent: Let me give you the real, nitty gritty value. All of this is very true what we're talking about and we're really actively focused on doing what we can to help, but the real value in SoDA comes with collaborative insight. We'll get together in one of our meetings and talk about a pain point, let's say start-stop. So we'll talk about that and Steve will say, Yeah, we've been dealing with that for years and we actually have an excellent methodology to deal with that. And Steve gives that insight to the group. We call that give a little, get a lot. And because of us getting together and really being transparent and looking at how we can each give a little bit of insight we make our businesses get a little bit stronger and take that insight and propagate it throughout the industry. We talk about things like credit -- just as much as big agencies fail to give digital agencies proper credit, we want to make sure when we outsource we give proper credit. We need to be consistent with what we're talking about when we look at all this stuff and talk about it and say, How do we do this? We don't really have a desire to be AICP or the 4A's, we just know that there's a need. We have common pain points and we're going to get together and see if we can help each other by doing it, and as a byproduct help the industry. The employees, the brands, the educators, everybody. Adobe was a great launch pad, it gives us the credibility, the monetary support to get us going. They're really a good partner.

Creativity: That's a mutually beneficial relationship, right? They get people who can test their tools and things like that.

Lent: No doubt about it. We were all in Chicago and did some unbelievable NDA sessions with them, really shared what we needed in tools and education.

Creativity: What do shops have to gain by joining SoDA?

Wages: They gain a lot of valuable knowledge. We've been doing this for 10, 12 years. A lot of shops, they may be owned by a couple of designers with no business background. They know how to design really well but they don't know the business well and maybe their shop is suffering. Or maybe they've only been around two or three years. Again, they're trying to figure it out. We did the same thing starting out, we had to figure it out, and at least we're a little bit closer to figuring it out but we're always learning something. Basically it's a way to get into the industry and really understand that this is the way you do it on a professional level, these are the types of contracts you need, this is the way you need to service your clients, this is the way you treat your peers. It's a way to provide a common framework for anyone that's in the business.

Lent: We get a new set of acquaintances that are transparent, forthright and ethical to talk to--—as much of a support group as anything else. Again, we're all facing similar issues, while our businesses are different, it's really not different. Even amongst the 18 of us.

Wages: One of the biggest expectations, or achievements when we are successful, is a common set of expectations when you're doing business that is all done roughly the same way. If you go into a client, or if you are hiring someone, working for Client A versus Client B, there's a common set of expectations of how you engage the interactive agency, how you work with them , how the awards are distributed, all the way down the line, whether you're a two-man shop or a 200 man shop.

Creativity: Even like an R/GA?

Wages: Yeah, sure. I think anyone can gain from it. They may have their own specific ways of doing it, they're pretty successful. That's fine.

Lent: We have a 400-person holding company-owned shop as a founding member of SoDA in Schematic, they're very similar organizations, R/GA and Schematic. Trevor [Kaufman, CEO of Schematic] is an excellent asset to our organization, he brings a lot of high-level insight. He shares a lot of understanding of growth and rapid growth for his agency.

Creativity: So your definition of an interactive agency paints with a pretty broad brush.

Lent: You're right, we have 360i, a 250-person search firm. And they're a great member of SoDA. It's understanding we're seeking, and the wider the brush we have the more we'll understand.

Creativity: What would an agency producer think when they have two SoDA shops bidding on a job and the bids come in the same?

Lent: If it happens, that'll be happenstance.

Wages: If it happens, maybe it's not so bad, maybe we're bidding on exactly the same set of expectations. We both have a really clear creative brief so it really comes down to just how fast I can do it versus how fast Rich can do it.

Wages: But I think that the common set of variables, which doesn't exist right now, is I could bid on one project and someone else could bid on another but we're bidding on two completely different sets of expectations from the client. They've decided that they don't like the direction we're going to go in so they're going to pitch a whole new different idea and we're pitching towards the brief, and so now the client's getting two completely different prices for two different projects.

Lent: To be honest, we're too competitive to have that conversation. We respect one another, but we're still in business to win.

Lent: We'll probably look at developing a solid MSA (master service agreement) that we would all look at and use in the baseline on the biz affairs side. But that'll just be through knowledge share. Steve has a great point, I have a great point, Freddy has a great point, Jay has a great point. We all get together, put it back and forth, send it to the attorneys and come up with a really, rock-solid MSA that works for everybody.

Freddie Laker, CEO, Ichameleon Group: Another approach we looked at doing was sets of best practices and guidelines, that way at least you can compare against your current contracts and do a checkbox and say, Look, I've covered 99 of the 100 things they've recommended to me, this should be OK.

Creativity: What about getting underbid by small shops?

Lent: I think that's always going to happen, small shops are going to enter the market and try to find an opportunity or create that opportunity by lowering their price, that's going to happen. Frankly, that always takes care of itself, once you win a few jobs and hire a few people you can't do that anymore, you have to step into the big leagues. So we're not so concerned about that, it's not an underlying issue we have to address, it's kind of a common practice in creative businesses. We all started out that way.

Wages: I think as an agency you always want to own the client anyway, you always want to own that relationship. We'd all rather own that relationship than go through a third party.

Laker: Just to be clear again, just because you're not a member it doesn't mean you're going to be excluded from the lot of info that we've got; if we could have 100,000 or 200,00 or 1,000,000 people on our mailing list and logging into our website as associates or whatever you wanted to call them that would be awesome.

Wolff: We're basically looking at all kinds of ways the organization can remain small and focused yet have relationships with all kinds of, either vendors or agency partners, or smaller shops like Steve was talking about. They stand to gain tremendously, but at the same time we're not going to have a hundred small start-ups to our member organization and events.

Laker: There are a couple great ones we've got at the top of our mind right now and we'd love to bring them in to get the insights of where they're at in the industry.

Creativity: How does the money work? Is there a commission?

Wolff: Just dues. Simple, fixed, fairly modest dues. All we're trying to do is find a little bit of common press, some common legal work that the organization simply needs to operate and the ability to get together several times a year so we can all be in the same room as each other a couple of days straight.

Lent: One of the things we're very excited about and we're looking to put a plan in place on is to do a road show, where we have c-level strategists and business owners from multiple touch points in the digital industry going from corporation to corporation and just doing an open think tank. We would present on a panel and just take them through the other side, for the brands, just sit them down and educate and collaborate.

Wolff: I think CMOs in any region would be willing to get together if they knew the heads of five competitive agencies, the top agencies in the country were going to be in their area and sit down, not just to compete for their business but actually try to raise the bar of the conversation, share some vocabulary, some best practices, some insights into the industry, some trends.

Lent: We've launched a wide net, look at 360i and look at WhittmanHart, 600-plus people in the two. And you look at Grupo W in Saltillo, Mexico, it has 16. So we're really a wide representation of our industry even though we're only 18 agencies. If you look at the ownership, we have some agencies that work just with agencies, some that work just with general agencies, some that don't work with agencies at all, some that are search, some that are media buying and branding, some that are brand destination websites, some that are application developers and software developers. It's a nice mix.

Creativity: How many people have you approached that haven't been interested?

Lent: Two, one for travel issues, they're located in Europe and didn't think they'd be able to make the membership commitment. We require membership at a minimum of two events a year and a station on a committee and they didn't think with the time change they'd be appropriate and one that was in Japan and we haven't heard back. But they're a great agency and we'd love to have them.

Creativity: Who?

Lent: It's tha ltd. But we'd love some Asian presence, there's so much going on there. We're hoping an agency can bring us that insight.

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