Outsourcing: The Coming of Age of a Traditional Ad Agency Model
For as long as I can remember, ad agencies have used freelancers to handle the ebbs and flows in the workload and sometimes as a way to bring in high-profile and high-priced talent that we cannot afford to keep on staff. But the use of freelancers has always been a more or less well-kept secret. Agencies generally don’t offer to identify freelancers as such to clients. Most of the time freelancers work behind the scenes. Twenty-plus years ago, I was working as a freelancer for a New York healthcare agency while negotiations for a permanent position with the same agency dragged out. I got my break when the client arrived early for a meeting one day and bumped into me signing in, as a visitor, at the front desk. Everything happened quickly after that.
Even today, agencies are reticent about the freelance status of their staff. Sometimes this stems from agency management wanting to look “bigger” to clients. Agency management may worry that clients will be concerned that the agency does not have sufficient internal resources (“bandwidth”) to get the job done. Or, clients may have the perception that they will get more time and more dedication from full-time, permanent staff. But, as outsourcing becomes a global phenomenon and spreads to more and more industries, especially in healthcare, I think ad agencies should be proud of having led the way in this viable operating model long before it became trendy.
Two years ago, with the encouragement of a potential client, I built an all-freelancer agency team of twelve people handling creative services, media relations and medical publications. For a while I called the team that I had built a virtual agency, but recently it dawned on me that what I have is a real agency. We have all the functionalities of a full-service agency. The difference is that our team members are all entrepreneurs and business owners in their own rights. We communicate, most of the time, via Internet and conference calls, although we meet in person occasionally. We enjoy the same camaraderie—though we do miss gossiping by the drinking fountain and other rituals peculiar to our business as described in Then we came to the end by Joshua Ferris (excellent book by the way).
The client who encouraged me to build this all-freelancer agency team benefited, as intended, from a more cost-efficient structure. Intuitively, one would expect that lower cost is due to not having to pay employment benefits, but that is only part of the picture. The savings is in not having to pay for idle time, which is expensive as well as demoralizing to staff, but almost unavoidable because of the cyclical nature of the business and the fact that fewer clients are willing to put agencies on retainers. (In fact I don’t believe in retainers myself, but that’s another subject.)
I think the benefits of the freelance agency team go far beyond cost. As an agency owner, I like the flexibility of putting together exactly the right team for the assignment. And I like the entrepreneurial thinking of my freelance colleagues. As business owners, they are called upon to solve problems every day—not that agency staff people do not, but the fact that your next assignment depends on how well you complete the current one is incentive for going that extra mile. For their part, my freelance colleagues tell me that they enjoy the variety in working with different teams, different assignments.
So what are the pitfalls? I find that a little more up-front planning, organization and coordination is necessary to bring the right combination of talent on board. Developing the chemistry and synchronizing a team among people who don’t see each other every day is a different challenge. And, by keeping the same core team for each client, each brand, the all-freelancer team can offer the level of continuity and consistency clients deserve. Once in a while, I have to work a little harder to juggle meeting schedules, but I think this is a win-win proposition for clients, freelancers and integrators like me.
An additional cost that must be staggering for a typical agency in, say, Manhattan is how much it must cost to maintain the permanent physical plant of the place — ie, the rent! I often wonder how much a cubicle up in the sky somewhere in midtown Manhattan is really going for, especially in “idle time,” as you mention.
But your quantum agency avoids the concept of rent altogether — both while the team works apart and while the team ethereally swarms together to work. And further, surely members of the team can deduct from taxes some amount of their individual rents on home offices or whathaveyou. More win-win, to repeat your words, it seems.
So I hope one will see more of your quantum agency (and maybe even the half-quantum Chiat-Day model of yore?) in these days of fantastic telepresence and other benefits. It just sounds like a perhaps would help our economy get going again. And fun, too, it sounds!
Sorry, the second-to-last sentence is missing text. Should read:
It just sounds like a better alignment of forces at work and at rest, an alignment that perhaps would help our economy get going again….
Yes, indeed, I forgot all about the rent! And thank you — I can now tell clients that I have a “quantum agency.” I don’t know about helping our economy get going, but I do believe that an eye toward efficiency and being mindful of excesses will contribute to better days to come.
Good article Lena, Been doing it for about 4 years and the agree advantages include the ability to customize teams Additionally lean project management costs / efficient turnaround times contribute to a much better ROI for all.
Good article Lena, Been doing it for about 4 years and agree advantages include the ability to customize teams. Additionally lean project management costs / efficient turnaround times contribute to a much better ROI for all.