Letter from London

What a difference a year makes. When I left the UK for a 10 month stint in Dubai in January 2009 few European agencies openly admitted to outsourcing digital production claiming that they preferred a 100% in-house service offering. They argued this was necessary to keep control of quality and to keep themselves up to date with the pace of technology.  It also kept revenues in-house, though Flip UK argued with them that by outsourcing to low-cost suppliers (e.g. Flip India) they could take on more and better clients and thus grow revenues. 

Fast forward to 2010 and we now find UK based digital agencies offering production services popping up everywhere. Traditional TV and print production companies are also building digital departments. New Media Age (NMA) even had a special feature last month on the subject. So what’s caused this explosion?

NMA claim (and I’d agree) that the proliferation in the UK is being driven by four factors:

1. Bad experiences with overseas outsourcing (though no examples were given)

2. Frustration with freelance staff

3. The growth of - and I quote - ‘a nerdier element in the digital industry dedicated to the craft of production’

4. The growth in client demand

I’d add a fifth factor:

5. Creative agencies simply can’t afford to keep the multiplying resources required on their payroll. The business is now more differentiated and more skill-sets are needed. Just look at the explosion of mobile apps and the variety of skills needed to develop them.

Whilst Flip UK now has more competition the good news is that outsourcing production (if not off-shoring) has at last come of age. We no longer have to fight to persuade agencies to move outside their own walls but must now persuade them that we can supply quality production at half the cost of other suppliers.

For me, the most interesting factor is No 3 – the emergence of the ‘digital nerds’ who are turning production from an unfashionable commodity business into a respected craft. Now that online standards have improved and consumers expect to be amazed by their web experience both clients and creative agencies are turning to recognized specialists to provide the ‘wow’ factor . With clients becoming increasingly savvy about digital and constantly pushing the boundaries of online marketing the age of the specialist is now upon us.

Flip cannot expect to compete successfully in every specialization in European markets. We must play to our strengths and leave the more complex development jobs to those who can spend hours, days and even weeks of face-time with their clients and creative partners. Our off-shore services lend themselves more to the commodity side of the business where less can go wrong and jobs can be reliably predicted to start and finish on time and on budget. This is not to say that our standards are any lower - we have always satisfied the toughest international scrutiny – but our own experience has taught us that complex development work from 7,000 Km distance isn’t always a smooth ride.

Flip evidently has the digital ‘craftsmen’ to match the best European work (witness the mumbaikar iPhone app) but our commercial brain must over-ride our creative heart.  Commodity work is profitable and manageable for outsourcing operations like ours so let’s go mining for the European digital commodities and leave the craft work to the locals.