How digital agencies create value

Let’s take a look behind the scenes of a digital agency and discuss the types of their organisation that exist. We will clarify which of them are expensive, as well as which of them provide high quality.

There are several ways a digital agency can create value.

The first way is to do everything in-house, having their own office, own team and technology. If this is the case, the agency monitors all its operations, corrects all its  junior employees’ mistakes, has well-established production processes and stable procedures. Such an agency has the highest costs of production because of a big rented office, multiple regular salaries and payroll taxes, very high salaries for key employees, etc. No need to explain that all these expenses are ultimately covered by the  clients.

The second way is to rely mostly on freelance contractors. The cost of such an agency may or may not be lower. A much larger part of the agency’s efforts is spent on monitoring its contributors’ work, multiple quality checks, detailed description of requirements and procedures, as well as coordination of tasks between disparate freelancers. 

The result of such agencies is always worse than that of the first type. It is difficult to evaluate a freelancer before you start working with them. A lot of resources are required to describe the requirements for their work in detail and monitor them. 

Since it is not a team that is working on the project, but scattered freelancers who do not understand the general concept, your project is assembled not as a single whole, but as a patchwork quilt, warm in some parts, cold in other parts, and very strange to look at. In such an agency, either the timing or the quality suffers, or both.

But there is also a third way. It is a hybrid team that has highly skilled constant employees as a core, surrounded by long-term freelance partners, and then other freelancers who come and go. 

Such a distributed team format makes it possible to minimise the cost of work and at the same time guarantee high quality. Let’s consider the advantages of such agencies by the item:

1. There is no need to rent a big office and waste the employees’ time on travelling to the office.
2. Only a few employees work in-house, which saves money.
3. The work is highly organised, both at the agency as a whole and at the project level: regular planning meetings, customised business processes, constant monitoring of each task, standardised project management procedures and specific criteria for assigning tasks: what can be entrusted to a one-time freelancer, and what should definitely be assigned to a permanent employee.
4. Most of the team have been working together for a long time, including the freelancers: the latter are free to work with multiple agencies, but have a long-term business relationship with the agency in question.
5. The entire project team participates in it from day one to completion, studies the initial requirements together and moves it forward by the stages together. Each employee understands the ultimate goal of their work. Tasks are not given to individual freelancers who are unaware of the existence of other freelancers.
6. Employees can live anywhere in the world and work for a variety of projects and companies (which enhances their experience and flexibility), but they constantly communicate with each other and are well-coordinated.

All this allows customers to get the same result as with the first agency type, but for less money.