It’s Not New: Outsourced Production is the Agency Model

By AJ Vernet, Co-Founder, CEO, Rey Interactive

AJ Vernet is the Co-Founder and CEO of Rey Interactive. AJ has 10 years experience building out sales channels and working with direct customers, agencies and creative shops fulfilling their online campaigns.

Name your favorite agency from back in the day.  Was it Crispin+Porter? Goodby, Silverstein & Partners from recent years?  Maybe it was Weiden & Kennedy for creating the Nike brand or Ogilvy & Mather doing such great public health work in the 1980s. Or, even look around today: Maybe there is an independent or boutique doing big work that nobody has heard of outside their clients’ walls or industry insider circles.  What’s become clear is that whichever shop you name, if you look inside, you can bank on the fact that they outsource most of their cutting edge and mission critical Production and Development work to other firms, creatives, and developers. This is the new agency model – yet, it is truly what “agency” has always meant. It’s as it should be.

The Agency Unrest Behind the Trend

Why is this outsourced Production and Development trend so pronounced? Well, the wisest agencies accept that they must maintain their focus — and their clients follow suit to support them. They know that operating as trusted conductor is what “agency” has always meant since advertising moved beyond print to the hottest new media — television — in the 1940s. There is all upside – and no peril to the agency – bringing in the right outsourced partners within this model.  This trend also extends to top media companies’ own internal agencies venturing into cross-platform development and needing to produce with utmost efficiency and with savvy hands on the work. As a result of this sober mindset and approach, all participating parties – clients, agencies, production companies — are on a trajectory.

Familiar Market Forces – Tech as King and Talent Cycles

So, why does this trend grab out attention now? Those in the know and directly linked to the industry economy say that we are in yet another ramping boom period that makes these types of collaboration especially opportune.  Although it is familiar territory, I am constantly struck by complexities of the agency world and how hard it is to scale those businesses. As an agency client base changes,  and as media options evolve, new production and development needs are always going to come up. You look around at your staff on-hand, and what do you see? The average creative guy always misses deadlines. And, in general, with the current tech landscape, it’s hard to manage and retain talent. We are truly amid the greatest tech boom yet. This represents a huge opportunity for companies able to capitalize on this scaling goal and talent problem.

Looking back to another familiar time, let’s emphasize an important point of progress since then – the groundwork that got established last time we crashed.  We see Netscape as being responsible for dot com bubble and then of course we have NASDAQ peaking. Sure the bust that followed was catastrophic but laid groundwork to next tech boom. And that’s where we remain today.   A key difference, however, is that companies are running lean and mean and very sensitive to having cash on hand. They know what it felt like not to have it when things got dire – and the smart ones won’t go there again. So, operational efficiency; tight, thriving team structures and workflow; and breathing room to stay nimble, creative and strategic for their clients are life or death business state objectives that must be achieved.

In many ways, Google is the one who created the next era, spawning engineers, production folks. Sure, the next 24-36 months will be a flurry. But, in such situations, tech becomes king again and talent gets restless. Talent retention surges as an issue.  We are seeing this in particular in the app and tablet space, right now, where tech rules the public imagination and talent is restless. Plus, the heat around mobile – and agencies needing to get ahead on innovation for their clients, represents another opportunity for able Production companies to plug in and play, to great benefit.  The free market creates new opportunities as long as it continues to expand.  And when it comes to the mobile and overall apps segments, we’re still in the first inning.