Agency vs Client Side

OK so it’s only been 6 weeks since I left agency land for my new life client-side, but it hasn’t taken long for me to look at the differences and comment on what everyone who works in an agency thinks of people who work client side.

For a start it’s bloody hard work! OK the hours aren’t as long and since I started I’ve managed to be home most nights before I would have even thought of leaving the office when I worked agency, and my new office is further away. Some of this will be to do with working in manufacturing where the factory stops at 4.30 and most people have left the building by 5.00.

So let’s wind it back a bit, until the middle of September 2016 I worked at an advertising agency called Uber in Sheffield, nothing to do with the taxis, as the Head of Digital. I was responsible for running all digital projects within the agency including design and build, social media, ecommerce, email marketing and online marketing, together with managing the team. Prior to that I worked as a Project Director at McCann Manchester and also used to run my own digital marketing agency. All in I have spent the last 17 years in digital roles in agencies across the North of England.

Client side I am now the Head of Digital Marketing for a company who sell household goods, best known for ironing boards and covers. Within the organisation we have another brand that sell garden furniture and barbecues. I manage all websites, staff including customer services, all online marketing and for good measure am helping to push the brand and offering into mainland Europe, before we leave the EU.

Anyone who has worked in an agency with digital people / ecommerce managers within a client-side business and wondered what they do all day, because let’s face it we all (when I was agency) think client-side is an easy ride! Well it isn’t.

I haven’t worked this hard in a very, very long time.

Working in agency for so long has meant everything is basically second nature, yes things have moved on a hell of a lot since I started my digital career building Virgin Holidays websites using frames and tables back in the late 1990’s but the fundamentals of project management and working within a digital / advertising agency environment haven’t. It was easy and looking back now I think I was just a little bit bored.

Moving into client side digital marketing isn’t just about having to learn the business, the products, pricing strategies, online marketing and promotional strategies, new people, new ways of working, using a PC again or how to fill in your expenses using a different form. I am now a retailer, I run an online shop that turns over multiple millions of pounds across several platforms including Amazon and eBay, using technology that I no longer have my own internal development team to support. I am in the hands of the agency. The agency that don’t work in the same way that I have worked for the past 17 years.

We always used to say it’s a different pace in agency than in client side, agency is a million miles an hour, always chasing around getting things done for a client deadline that they made up to make you work faster. It’s true, things don’t get done at the same pace, because there truly is so much to do, so much to consider, more people to consider, more people to consult, it’s not just about the bit of work that we give to an agency to complete, even as an online business the website is only a small part of what I do because I now have to create the content brief, not just the content, I have to prioritise the photo shoots to the products that sell over those that maybe don’t. New products are arriving all the time, what do we do with those, how much will they sell for, do we put them in a promotion, the list goes on and on and on… Then there’s the new website.

OK so it might just be the company I have joined, the way I have decided to do things and some legacy things that just need sorting out, but next time you think client-side is the poor relation to agency remember that you only see a very, very small part of what goes on behind the scenes, there is so much more to this than you think!

I don’t think I would ever go back to agency, never say never and all that but I found myself in a quiet moment the other day asking myself why I didn’t do this earlier.

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Why costing with an hourly rate undervalues your project

Over the years agencies, in particular advertising agencies, have used an hourly rate to charge for the work that they do. Hourly rates are usually based on the employee’s job and a mixture of overheads and profit.

The way some agencies work is to take the amount of time taken at the end of a job and multiply the time by the hourly rate.

The other way to get a cost for a job is to multiply the number of hours we estimate a job will take and times it by the hourly rate.

What this does is to make the hourly rate into a multiplier and time into a commodity, a bag of sugar as I call it. So then you have no differentiation based on your skills and experience, just an hourly rate based on overheads and time based on how long it took the last time you did the job. Of course you can change the hourly rate based on the experience and seniority of the people involved in the project, but it still doesn’t give you the results it should.

Using a bit of algebra I am going to demonstrate why what we have done, as an industry, is undervalue the work that we do, the skills that we have acquired and the experience that we have that makes us all good at what we do.

I know that my oldest daughter, who has in the past questioned why we learn things like algebra at school, will appreciate this, so this one is for you AJ!

Take time (t) and for any given project multiply it by the hourly rate (h) to give you a project cost (p). The first time you work on a specific type of project and I don’t mean when you first leave collage, I mean as a whole, a project or project type that you haven’t done before the amount of time you need to complete the project is determined by the amount of time the project takes (if you have no experience of a type of project the first time you do it will determine the base level of time required).

Obviously consideration will need to be made for the amount of time required to learn any new skills but basically we can say that:

The time taken for project 1 – t=t

But then undertake the same project again the time taken can be expressed as follows:

Project 2 – t=t-x

Where x is the amount of time saved because of your experience.

Undertake the same project again and you can further reduce the amount of time taken due to repetition. The time required for these projects can be expressed as

Project 3 – t=t-x-r

Where r is the time saved due to repetition.

If you use a job costing system, as the basis for collecting time on a project to multiply the time taken by the hourly rate you will only ever charge the time taken, not the net worth of the project.

What I mean by this is why do we charge less for a project because we are better at it and more experienced, rather than the other way around. Again you could argue that the hourly rate is increased to take into account the amount of time we reduce on a project because of the experience that we have, but does it really work?

In reality you are likely to have the project scenario above quite often within the lifetime of a client. Anything that requires repetition or you learn to do quickly or more efficiently, banner ads, emails and simple website changes spring to mind immediately.

The one true question shouldn’t be how long, therefore how much. It should always be what is the commercial value of this project. You could say that the value is the time taken the first time you undertook the project. Maybe as a project it should be more than that as it is worth more to the client than you are charging.

The danger is that we charge based on what we think clients will pay, not what they are worth – my dad would say anything is only worth what someone is prepared to pay for it – but this is kind of short sighted in the fact that in reality you get what you pay for as the adage goes, buy cheap buy twice.

Costing projects is never going to be an exact science but if you only use the time you spend multiplied by the hourly rate you are undervaluing not just what you do, but yourself and the experience you have gained over the years.

So the message is simple, stop basing project costs on an hourly rate and time taken, it’s a starting point, a guide if you will, but it shouldn’t be the be all and end all of the equation. Take into account previous iterations of the same job, look at what you charge other clients, what have you charged in the past. Only that way will you get a better picture of what a job is actually worth.

At the end of the day, when all is said and done, if your client won’t pay the costs you put forward are you prepared to work for a lesser hourly rate, do you reduce the amount of work done, or do you just accept that the commercial value of the project to your client is less than you believe it is?

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Have You Ever Had a Paper Round?

It might seem like a bit of an odd question to ask at an interview for a web developer or social media manager within an advertising agency, but it is a question I have been asking over the years for a very good reason.

Firstly it isn’t really the question that is important, more the meaning. What I am really asking people is are you a self starter, did you do something when you where younger that set you apart from others, made a bit of money and showed that you are willing to work hard even from a young age.

Of course in a digital age when most people I know read the news online, through their smart phones, tablets or computers, there is less need for people to deliver newspapers. Indeed my wife used to deliver milk (and no it wasn’t a question I asked before I married her in case you were wondering), again showing at a young age it isn’t just newspapers that needed delivering. Not that you can consume milk online but you can buy it and have it delivered with your weekly shop making the daily milk delivery as rare as the paper boy.

These days I do get odd looks now from the twenty somethings who usually ask “what’s a paper round”. Maybe I will have to change the question to “have you ever had a Saturday job?” It would seem that most 16 and 17 year olds would say no, judging by the recent research conducted by the UK Commission for Employment and Skills, suggesting that “Only one in five has a part-time job while in college or doing A-Levels”. The BBC newsbeat team have reported the reductions in their article here, which is what prompted me to write this post.

Although never a deal breaker, I can safely say that the overwhelming majority of people I have employed over the past 15 years have either had a paper round, milk round or some sort of work outside of their school / college time. Also speaking to people who are in positions of authority within companies, either clients or other agencies, I have found the a large amount of them will have done something at a young age, paper round, milk, round, working in a shop on a Saturday morning etc.

It has become more and more important as an employer to see people who have more than just academic skills, but also have real world employment skills too. Even graduates or placement students (working for a year as part of their degree) will have more valuable skills to an employer if they have done something, preferably to do with the job they are applying for, than those who just studied and got a better degree.

So I will be telling my kids, one of which is almost a teenager, to go out and find something outside of their studies that will help them in later life, you just never know who might be asking if you have ever had a paper round.

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Every Little Helps

I shop at Tesco’s for 90% of my groceries. I get my TV, phone and broadband from Sky. I use Money Supermarket to get my car insurance. I use my iPhone to entertain me from games to music to web browsing.

I do all this not just because it’s convenient, but in doing so I can save both time and money.

I’m sure I’m not alone. This is the way of the nation and probably most of the western world. Large organisations have adapted to and built around what the consumer needs. Sure, there is opposition. What about the independent traders, the experts, the local farmer? Most people agree there is a need to support these people but circumstances dictate how we live and really, why make life harder than it needs to be?

Of course I’m using this comparison to illustrate how integrated agencies operate and flourish in today’s financially tough, time-restrictive climate.

But, like the opposition to supermarkets and shopping malls, integrated is seen as a naughty word. Is a marketer seen to be lazy, weak or soft by going to one agency that can fulfil all their needs? Or are they busy, budget-conscious and focused?

The debate surrounding using either a specialist digital agency versus an integrated one has raged for many years and probably won’t go away anytime soon. What we have seen over the years is trends pointing first one way and then the other.

In the early days of the Internet there weren’t many specialist digital agencies so there wasn’t any choice, digital campaigns were done by advertising agencies or repro houses (remember them?).

Once there were enough people with Internet experience small, independent, digital agencies were born and the shift towards using these specialists for digital work was complete.

More recently there seems to be a shift back to the integrated agencies who can offer digital not only as a bolt on, but as a segmented, stand alone offering within the business. This is of course nothing new but there is a growing feeling in the industry that this is the way things are going and may be the way things stay.

The big question is why?

In the beginning digital only agencies were small niche businesses focussing on one thing, website design and build. This is long before you had to put any effort into online marketing to rank highly in Google.

The move from niche to mainstream happened quite quickly as the Internet took off and more businesses wanted a web presence. Good digital agencies then offered ancillary services including online marketing (Search Engine Optimisation and Pay per Click), email marketing and online advertising.

It has been this move from niche to mainstream that led the traditional advertising and marketing agencies to look at these businesses as a threat to their share of client revenue, especially with the increases we have seen in spend on digital activity over the past 10 years.

It makes perfect sense to use specialists where only a specialist can give the required results. However as a marketer it also makes more sense to keep your budget, timescales and more importantly your brand consistency in one place.

This is true not only of integrated campaigns, but also for individual projects too. I think it is safe to say that the majority of major brands now have their own website, be it good or bad, so are generally looking for campaign work rather than a complete digital overhaul or new build without any precedent.

What has been happening in recent years is that specialist digital practitioners, who have worked in pure digital agencies, are helping traditional advertising agencies embrace the digital ‘revolution’ by adding a digital capability to their offering. This allows clients to keep their campaigns in one place rather than having separate agencies for on and off-line projects.

Don’t get me wrong; there is a time and a place for everything and specialist agencies are no different. I do think those that will flourish at least in the short term are the niche agencies that offer services like Social Media and Search Marketing.

Both of these can be handled by integrated agencies that have the people and capabilities and will probably be swallowed up in the same way as traditional design and build has.

Having said all of this, some will be nodding in agreement; some will say that integrated agencies have been offering digital capabilities for a long time. This is very true and whilst some have always had their own specialists, a lot of them used to outsource the digital parts of campaigns to the niche digital agencies. Some of them still do.

There is nothing fundamentally wrong with that and is one of the other ways in which specialists will survive, by going back to being the niche design and build agencies that they started out as.

Integration can be seen as shorthand for choice, convenience and collaboration. It is the binding together of resources, knowledge and skill. It also brings consistency. With brands fighting it out across multiple channels, brand consistency is paramount.  In the current climate, it’s becoming increasingly apparent that if you can’t offer an integrated, collaborative solution then you are in danger of not having the ability to fully deliver the whole package.

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