Unpredictable spend: could the subscription model be a way for marketers to buy creative?
The amount marketers need to spend on creative has become unpredictable, with the variables on formats expanding as digital channels fragment and personalization comes to the fore. Creative platform Shuttlerock has been working with clients like Dubber to see if a subscription model can shift the burden of compromise.
Compromise is the theme of this creative conundrum, as marketers want to make sure their ads are fit for new channels, are personalized to their audience, and are optimized on the go. However, the challenge is how to do all this without surrendering control over costs.
Andy Lark, chief customer officer at cloud-based call company Dubber, says the demand for digital creative has been exponential but brands are challenged by traditional agency models that are not built to cope.
“The traditional agencies simply are not built to do that, from a cost standpoint. What happens for us is we've got our own design capability and we've got a creative agency, and all these other agencies around us, but every conversation was the same. ‘Oh you need another eight variants, let me send you a new scope of work for that’, or ‘that exceeds the scope of work with you, so that's going to cost you more money’.
"You have this total unpredictability in your spend, because every campaign is a little different, and that continues to get worse and worse over time. You end up with this huge budget creep and a massive production lag,” he explains.
As a platform, Shuttlerock has been working with brands and agencies to try and improve some of these issues since its inception but the compromise between spend and truly scaling was still present.
Scott McBride, chief revenue officer of Shuttlerock, says it decided the next logical step in addressing this issue was to play around with the business model.
“There's a far better way of doing this if the compromise is the biggest issue that we're trying to remove, to help a business creatively transform. When I mean creative to transform, I mean better quality, better performance, and better fit. We thought, maybe we can look at the pricing model?
"Instead of having a very simple transparent rate card, you look at it as creative as a service, with a set budget for the year and a minimum amount of things to make. I'd love to do more and remove the compromise completely and that's where the idea of subscription came in."
While it is early days, Lark says removing this concern is already having an impact, not least freeing up creative talent to spend more time on strategy and idea generation.
“Instead of having this highly unpredictable world of budget and production lag and deadlines, I've got a highly predictable world now around my spend pattern, and getting production and getting assets to a screen. That is super exciting as a CMO because there's nothing worse than sitting there thinking, Oh my God, why have we overspent again?” he adds.
One of the challenges in conversations around creative transformation is that it puts pressure on existing business models, particularly for agencies. However, McBride says subscription creative is equally an opportunity for agencies too, as it could create cost efficiencies in their own models.
“If you look at how any agency works, it’s on three levers of profit margin, overheads, and staff costs. If an agency wants to make more profit, you need to figure out how to procure the ingredients to execute your projects in the most cost-effective manner. Maybe subscription models are something that they haven't looked at as of yet but there are definitely metrics within their system that they can utilize and we can become a key part of that, which I think is really interesting,” he adds.
The case for a creative subscription model is still in its early stages but Shuttlerock believes it will become the core model, at least for its own platform business. Whether this scales into the wider creative and production space is yet to be seen. Fixing the creative compromise and removing the unpredictability from spending is certainly a problem marketers want to solve.