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Will Technology Drastically Change the Agency Business Model?

By Tac Anderson ⋅ February 19, 2010 ⋅ Post a comment
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Adam Singer has a post about the challenges in building a consultancy/agency in the digital world. I shared this post on Twitter and instantly had replies from Marc Meyer and Jason Moriber. Marc couldn’t agree more and Jason totally disagrees. I don’t know exactly why Marc and Jason feel that way, maybe they’ll share their comments here, but I love it when a topic sparks polarizing responses.

I’ve been an individual consultant. I’ve helped grow a 4 person agency startup into a 12 person million dollar agency over 2 years and an acquisition of a web dev shop. (I then left 6 months later before it all imploded.) I’m now at a 800+ person global agency that’s growing like crazy. Technology scales, people don’t scale. You have to grow and develop talent. The only other option is to acquire talent and I’ve already talked about the challenges of social media talent acquisition.

When I was on my own I did a lot of consulting. Consulting pays the bills but the only way to grow is to hire people. People are expensive. As an EIR at Highway 12 Ventures I saw a lot of people that wanted to build agencies or service firms of some sort. Here’s your free tip for the day, if you’re trying to build an agency that is technology enabled don’t bother talking to a VC, an Angel investor maybe but not a VC. If you’re a technology company that also offers consulting that’s something different. That’s why Mark Hurd spent so much money for HP to buy EDS.

I personally think all agencies will become a hybrid of consulting and technology. This still isn’t scale, it’s just market demand. Publishing, measurement and workflow tools technologies are just a few areas agencies are developing. Many agencies are partnering with technology providers, we’ve seen a lot of that over the last year and we’ll see a lot more.

In addition to partnerships some agencies <ahem> are quickly developing internal technical capabilities to create their own technology solutions. This is also going to increase significantly.

The work agencies are doing has been changing drastically but I also think the agency business model is going to drastically change.

What about you? What additional changes is technology bringing to the agency model?

Will Technology Drastically Change the Agency Business Model?

image via [auro]

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About Tac

Social media anthropologist. Communications strategist. Business model junkie. Chief blogger here at New Comm Biz.

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  • http://www.jeremymeyers.com/ Jeremy Meyers

    Not just technology. Technology is influencing the kinds of communications that PR agencies will be doing now and into the future (a shift away from media relations and toward communication strategy all-up). I'd be surprised if flourishing agencies looked at all like they do right now in a few years.

    Death to the billable hour.

  • http://twitter.com/ianmbenson Ian Benson

    I would argue that technology will not be what changes the agency model, it will be how people/companies/organizations adopt it (or not) and fold it into how they work and collaborate. Technology is only valuable if people use it - and use it efficiently/effectively. Things in agencies today are far different than they were 50 years ago - and they will be different than they are today. This *may* happen more quickly as technology evolves more quickly (does it actually?) but it *may not* either if things move so fast that it makes it harder for them to 'keep up.' This could arguably stifle this type of change as leadership becomes stifled by the time/resources required to always be at the forefront of organizational change at the hand of technological advance.

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