[vimeo http://www.vimeo.com/10288261 w=500&h=281]
The long winded, largely self serving, debate over Traditional versus Digital agencies is still alive. It should have been beaten senseless years ago, but the home fires are burning with most traditional shops chasing the market, adding the word digital to their tagline. Good grief, Digital isn’t even the correct term!
Moving on… It’s time for a new debate.
This debate centers around what your interactive agency should be doing for clients. At a minimum, it should be serving clients’ every interactive need, creating engaging experiences, and most of all, helping them make money. As a means to this end, I suggest it should be doing more: imagining, designing, developing and launching it’s own products. What better way to sharpen the skills necessary to make a brand famous online than to practice with your own? Every step of the product creation and deployment process translates to deep learning, applicable to all clients.
Reasonable people will say developing products can distract from the core business of helping clients succeed. I can’t disagree with this. Instead, I assert that the benefits outweigh the distraction.
The benefits to the interactive shop go beyond acquired knowledge for client projects. While it can be difficult to justify the financial investment it takes to have your team concentrate on an experimental product, the rewards can also cover the cost. Example: your team builds an API that can interface between your product API and Twitter. This API can then be used in a client project, streamlining development, increasing profit.
Design and interactive strategy is another area in which knowledge and muscle memory will increase with product development. Typically, a client will already have a product that they’re looking for your agency to promote. An interactive agency that is not creating its own products is missing a vital capability. Without the experience of imagining, building and pushing its own products how can they effectively do the same for clients? There is an entirely different skill set that emerges in product development that wouldn’t arise otherwise.
Finally, aside from acquired skills, the potential for one, or several, of these products to develop a revenue stream is real. These additional revenue streams afford interactive agencies the opportunity to be more selective about client projects. More selectivity leads to more successes. More successes lead to more clients. Rinse and repeat.
Some shops, including theGOOD, have done this with Sell Simply, theGOOD Uploadr, and most recently Centamental. We have created products and released them into the interactive ecosystem with success. We’ve then been able to parlay them into client work, acquiring valuable IP, while creating alternative revenue streams for ourselves. Other shops have also done this successfully, including The Barbarian Group, 37Signals, and our neighbors Instrument.
While this is not an entirely new concept, it is a concept I’d like to see widely adopted until it is a standard. Interactive shops should make things. Their own things. Clients should seek out and select interactive agencies that have leveraged product development. When this occurs, both client and agency win.