Question

Topic: Strategy

London Creative Agency Business Direction

Posted by chris on 3/8/2009 at 8:05 AM ET 250 Points
I'm the partner of a London based creative digital agency and for the past three years we've been marketing and providing online solutions (seo, email marketing, web design & build etc) to business owners. We're now in the process of changing direction and are looking to deal exclusively with other communications agencies such as larger design companies, PR companies, marketing companies and IT companies. We would like to take on their overflow work and become a White label supplier of digital services to their clients. My question is if you guys feel this is a lucrative avenue? If you own or work in a larger comms agency, do you outsource overflow work? What types of projects would you be looking to outsource? Is location of company u outsource to important (client meetings, credibility) and lastly, how could I go about doing some market research into the viability of this direction? Thanks in advance for any information you can provide. Chris.
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RESPONSES

  • Posted on 3/8/2009 at 3:34 PM Moderator
    Asking this group (on the KHE) is a good start. You might also want to set up live, face-to-face interviews with local agencies, as they are your most likely clients initially.

    It seems to me that you have to build some kind of relationship of trust between you and your new clients. Otherwise the clients will be very reluctant to entrust THEIR reputations to an "unknown" partner/supplier.

    Once you get into the remote white-label marketing service business, you're competing with similar services in India and the Philippines. They are very good at this kind of stuff, and they are extremely cost-competitive. You'll need something very compelling to tell your prospective clients/partners ... and the face-to-face contact will separate you from the offshore alternatives.
  • Posted by matthewmnex on 3/9/2009 at 8:41 PM Accepted
    Dear Chris,

    I believe that you need to think long and hard before making this shift and also try to make a serious market study first.

    Here are the 2 things I see.

    Why would I use a digital agency in the UK?

    There is only 1 reason - the quality of the creative thinking.

    If I want to start outsourcing development work, be it building pages, DB management, Even creative design, then I will outsource where the labour is cheap.

    I can get top class work done in India, Philippines, Thailand etc. for 1 / 10th of what you will charge in the UK.

    That is the whole point of outsourcing; saving money.

    If you look at the history of the UK economy over the past 50 years, all manufacturing went overseas and UK became great a selling expertise. Science, technology, engineering etc.

    If I want something built cheaply, I go to China. If I want very high quality highly specialised work; I go to UK or Germany.

    So you have to decide which business you are in.

    Are you a highly specialised digital agency that produces top class thinking and top quality work?? If so, then you are already in the right business - you just need to find more clients and build your own marketing and reputation more strongly.

    If you want to pick up the crumbs of other larger digital agencies (over flow as you call it ) - then you become a no name (white label as you call it) company with no reputation and you lose all your brand capital that you have already built.

    Your competitors then become, China, India, Philippines, Thailand, Eastern Europe etc.

    Maybe my comments sound a little tough, but it is easy from inside UK to become a little blind to the global picture. I provide white label services to Yahoo, MSN, Virginmedia, AOL, Orange and 80 partners world wide so I know what I am talking about.

    The users who visit and use our content will never know that it is not on Yahoo servers (or whichever partner) and will never know that it was coded in Asia - They also don't care.

    Here is one thought that might work for you.

    Keep you current company and brand name / reputation in tact as is and focus on selling high quality thinking.

    Then start a second company, completely different name, as a subsidiary company of the mother company.

    This second company can do the white label, over flow, outsource work. The Daughter company could focus more on coding and technical work which you can sub contract out over seas. If the company needs expertise, it can pay a consulting fee to the mother company.

    You can run the 2 companies side by side each with it's own specific focus and market segment and still preserve the integrity of each.

    I hope this is helpful.

    Drop me a line any time if you would like to discuss further.

    Good luck,

    Matthew

    [Email address deleted by staff]
  • Posted by chris on 3/14/2009 at 2:10 PM Author
    Thank you to everyone that responded. Great insight and information provided which is greatly appreciated. More questions to follow as we progress with this new direction.

    Chris Antoniou
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