Creativity is the lifeblood of your agency and is what you’ve built your business and reputation on, but getting the best from creatives while maximising profitability is easier said than done.
Greater visibility means healthier margins and better creative work
Achieving a balance between creativity and profitability is possible — you just need to know which clients, projects and mix of talent deliver healthy margins.
Having real-time visibility of every project, old and new, improves your profitability by enabling effective, fact based decisions, while benchmarking past experience. Foresight into your project bids and business planning enables processes to operate more efficiently today and defines new ways of working for tomorrow.
Identify and target those clients and projects with greatest potential for profitability and creative recognition (or hopefully both) and be clear in your decisions.
The end game is giving your creatives freedom to spend more time on the right work for the right client. And that’s when the magic happens.
Balancing income and costs
Creative agencies are seeing steady revenue growth, but also higher costs. For example, according to a recent Kingston Smith W1 review of the Top 50 UK marketing agencies’ financial performance, employment costs (particularly amongst digital agencies), average more than 60 per cent of revenue and are rising. To maximise growth opportunities, yet keep control of creeping costs, you need to:
- Use detailed project analytics to optimise your client portfolio. Develop clear strategies for servicing your top clients and redefining or resigning those dragging you down.
- Focus your business on the most profitable, indemand creative services.
- Be ruthlessly clear on what clients you want to pitch and why and deepen existing valued relationships to drive greater margins from both.
- Understand metrics and business drivers – like customer lifetime value, project profitability and revenue growth.
- Ensure the right creative talent is working on the right jobs, more efficiently. Look at how other project-based industries are managing time and maximising related revenue.
- Invest in an integrated agency management system that gives you a single, trusted version of the truth in real-time.
Changing the way you think unlocks greater creativity, but only changing the way you work brings related profit
Digital and content services are growing and many creative agencies are adding these to their portfolio. If you’re adding new services, you’ll have to invest in the right tools, recruit the right people, typically at higher salaries, or merge disciplines with other agencies in creative clusters. None of this is easy, so make sure the numbers match your ambitions. And be clear that you cannot force fit new offers into established ways of working and hope to make money.
Maximising creativity needs total visibility
Your creative ambitions are what drove you to open for business in the first place. However, they must withstand the commercial pressures.
Increasing your client retention rates and maximising revenue potential means delivering creative projects on time and to budget, while focusing on the service mix that is most profitable for you. Many project and traffic management techniques don’t always offer the degree of insight and control you need to manage creative teams, the micro-aspects of your projects and overall financials. To ensure creativity and profitability thrive together, consider investing in integrated solutions that provide visibility of all your agency functions.
Join the debate
With help from industry experts, Deltek has launched a campaign, What If? It explores many of the challenges you face and looks at ways you can grow your business, covering issues like customer demands for greater value and choice, modern pricing models, finding and retaining the best creative talent and preparing for a merger or acquisition.
Join me and other industry experts and share your thoughts deltek.co.uk/what-if
Raymond Kieser, Practice Director: Global Marcoms, Deltek
Tel: 0207 518 5010