The conversation with a design agency owner began with an increasingly common lament: “We are doing more work for less money. I don’t know how we can survive.” I’ve now heard that sentiment several times, and it was summarized in a recent Forbes article written by Keenan Beasley, owner of BLKBOX, an integrated marketing agency in New York.
He quotes Michael Farmer, a veteran marketing consultant and author of “Madison Avenue Manslaughter” as saying what was “once one of the most fulfilling and glamorous industries has become a grim sweatshop for the people who do the work.”
Brand owners want measurable results on their marketing investments. Packaging is only one part of a marketing mix that is becoming increasingly fragmented as digital media expands well beyond traditional outlets. Old compensation models no longer work, and hourly rates don’t really fit the nature of the business. Brand owners can simply take the packaging design function in-house or choose from a plethora of freelancers on a project-by-project basis. As a result, client-agency relationships seem to have lost value these days.
Farmer writes: “Agencies continue to cling to the notion that clients want creativity and service, but what clients really want is shareholder value.”
Brand owners have an existential need for continuous growth and are willing to pay for marketing that demonstrates a return on investment. That’s the crux of problem: Designers and agencies must figure out how to better anticipate their clients’ needs and measure the results of their concepts and labor. As Beasley summarizes: “We can hold confidently to the fact that if we are willing to solve problems and help our clients drive business — our value is immeasurably great.”