(4 votes, average: 3.25 out of 5)
One of the biggest challenges that agencies face is making “more” money… At the end of the day, most agencies sell head hours, head hours of awesomely talented people, and almost all of the world’s biggest and best agencies/networks are built purely around hours, and to me, that’s got to change, because it will not only be harder and harder to sell hours in the future, but it just doesn’t provide the opportunity to control your own revenue growth or the ability for a passive income.
That’s where SOAP Creative are doing things just a little different, they’ve released an app called Diggin’ Dogs, an iOS game, by utilising their internal skill sets to generate a product based, passive income stream, something I believe more agencies need to do!
Apps: The Future of Agency Revenue Models? That’s a very generic and predictable headline right? Sure, but just look inside your agency, it’s got every single skill set needed to create a startup, in fact, many of us work on startups or enterprise business, helping to create and build their products, take them to market and even plan the CRM strategies too…
So what if you could re-think they way big agencies make money, utilise all that talent to create new, agency based products? Well, I suspect our business would grow faster, become more dynamic, yet even more stable/robust and have the ability to retain staff longer… It’s win win. And even by diverting hours on say, the 20% Google model, it would revolutionise these businesses in just months, and completely transform the industry over a few years.
A few agencies area already doing this, and I suspect most would want to, but it’s only history stopping us! So how to get started? Apps… Start with an app, and think like a startup.
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February 19th, 2012 at 12:44 am
Any type of recurring revenue model should be in the line of site of an agency. We have been working on this, too! Agree 100%.
February 19th, 2012 at 12:13 pm
Are you referring to making apps for clients? Or making apps for the agencies themselves to sell & monetize? (Either way is cool IMO)
That Diggin Dogs game looks pretty fun – I’ll have to be careful not to download it, lest I get no work done
February 19th, 2012 at 1:22 pm
Great discussion. If you take the discussion back to basics the old agency terminology of ATL vs. BTL is losing relevance. Online media has shifted the discussion towards targeted vs. untargeted media. Let’s be honest, this has scared the traditional ad and media agencies and put more control and ROI focus back into the client’s hands.
February 19th, 2012 at 5:36 pm
Agencies like 3RD sense have been doing this for a while – not only do they build Apps, including the hugely successful Swords and Sandals App (#1 in 17 countries), but they run their own casual games network (Fizzy.com) and advertising network (Playvertising.com), while still finding the time to do amazing work for clients like KIA, Penguin, RSPCA and others.
The major underlying issue with apps is that the average App costs $20k to make and most never return on their investment. As such, there’s quite a risk in committing talent to building your own properties – as not every project can be a success.
February 20th, 2012 at 3:17 am
Personally I think that potential revenue models will be split between performance based (retail integrated) or loyalty management based (sentiment linked) sources.
I’ve written about one end of the spectrum here: http://www.jonathanmacdonald.com/?p=5609
As for apps, I think George’s final comment should be underlined.
jMac
February 20th, 2012 at 10:20 pm
George/Jonathan…
Agree – these projects can’t be guaranteed. But then again neither is winning a pitch! I’ve suggested apps only because it’s an easy entry point (both time and money wise) and provides a great opportunity to test the waters on building/marketing your own products as an agency…
Hopefully, if you’ve got great people on board, then there is enough research and thinking put behind the direction to give it a great fighting chance…
Apps could be swapped out for all sorts of online tools