Others have gone as far to say that the very concept of a user experience-focused agency simply isn’t a long-term play, largely because of what the big folks are up to. Facebook and Google went on a design/product buying spree specifically because they needed to figure out how to own this thinking themselves, and other tech companies have followed. And more traditional industries, like insurance, media, and retail? They’ll develop robust in-house capabilities soon, if they haven’t already.
Ready to pack up your things and start a landscaping business? Not so fast.
In The Pastry Box Project today, Greg Hoy of Happy Cog talks honestly about why the first quarter of this year sucked for most web design agencies (including ours), assesses the new and growing long-term threats to the agency business model, and shares his thinking on what we in the client services design business can do to survive, and maybe even thrive.
Funny but the first quarter this year was very busy for me as a freelance web designer.
The big issue with companies taking teams in-house is the same as it’s always been: they will scour the ranks for the cheap labor, de-value what they do, and then stick them all in a cubicle farm and zap any creativity right out of them. I tend to view this more as a cycle than a permanent issue, though.
The bigger issue (for me) is the small and medium sized businesses deciding to go cheap. I’ve seen a lot of this in my business this year. Unfortunately, most of them don’t understand the mistake until it is too late. But Greg is right, there is lots of business out there. We just have to find it.
It’s no going away or dead at all. It’s actually growing! Just not in the way that will make the traditional agency UX model happy… It’s becoming more competitive! As more people learn UX, supply and demand dictates that prices will have to fall. It could be a slow business season for you because your clients are getting more cost effective rates than what your used charging at the agency level. Bringing talent in-house full-time is a prime example of cost and budgets dictating this economic reality.
I’m glad you posted this. Q1 2014 has been incredibly tough for me too and I seem to only know agencies who are making a killing at present, which is dispiriting!
Increasingly I’m encountering a problem with perception. I never saw myself as an IT contractor, never brought to the table what a contractor does – I ran an agency. With just me doing the web work, but an incorporated company and 4 directors. But more and more this last 6 months I have people who want to hire me as a contractor – to be a code monkey and implement what they have decided.
That’s not what I do – I can do it, but doing it without skilled input into what to do, what will convert, what’s needed and competitor analysis sucks. For them and for me.
This has been driven home with the latest (IT contractor-esque) project – to build a responsive-but-brochureware website for an agency. Today I have had to step out and tell the CEO why what his agency has designed isn’t gong to work on mobile (presenting evidence and backing it up), take responsibility for project management which their PM isn’t handling, negotiate unfinished designs with the designer and make it work. This is not code monkey territory. So what the heck am I doing wrong??
I’ve also found the projects that used to be my bread and butter (custom web apps) have dried up – people are using SaaS solutions as more cost-effective. And off-the-shelf templates rather than custom designs.
Greg Hoy is spot on when he says “The industry has many more talented players than it used to.”. I don’t believe humans have ever had to compete in such a large marketplace with so many talented people before – and it’s a challenge. How do you make yourself distinctive in a worldwide marketplace?
I’d love to hear from people – we don’t have anything like OwnerCamp here and the local agency people I know are never… straight when talking about this. Definitely dog eat dog!
This sentiment stirs me a bit, and not really in a good way.
Here are the problems, as I see them, all ultimately boiling down to client education:
* SaaS platforms like Squarespace and 1&1 have effectively obliterated the small business market. Maybe someone here can tell us how GoDaddy and Hostgator are doing on their platforms.
* India, college kids with Dreamweaver but no dream, etc.
* Twenty years in, people are still freaking out that something impalpable can be so expensive. Someone, somewhere in the chain of responsibility is whispering accordingly into the ear of the (usually-stuck-in-the-Eighties) guy who signs the checks. The damage done is incalculable.
* Related to the previous is the fact that too many people are still dumbfounded when you tell them that their web presence should have a well-defined business case. It doesn’t need to be original, just well-defined, dammit… and without that business case, online presence becomes a study in empire-building. What puts empire-building to a stop? Committees.
I suspect that we’re getting to a point where the ability of an agency to maintain a flow of new accounts from word of mouth, and the ability of bizdev folks to move the sales cycle along, will matter just as much—if not more—than differentiation.
I could go on, but I’m wandering into GYOB territory and hella fast.
Until recently I would have agreed. But I’ve seen some really positive steps at some major companies. For example Target has the RAD team http://targetrad.com that operates much like a startup/consultant within the company, but isn’t constrained by the traditional corporate culture/structure. I’ve seen similar teams popping up at other companies in the last few months.
For the sake of transparency I am a member of the RAD team.
Really good UI/UX requires a company to be laser focused on customer (or whichever user) experience. It can’t be done just on the web portion of the user experience; it has to be tied into how (and why) the user gets to the website, and how (and why) the user leaves the website. So the best of the best has to be done in-house.
But that’s never going to happen for every company. You’re always going to have big companies with little departments to service the customers that don’t fit the mold– primarily business-to-business companies with consumer divisions. And you’re always going to have non-technical companies that know how to provide a great customer experience face-to-face– but are growing to the point where they need a web presence.
In short, the big boys that care enough will go in-house, but to predict the death of the web design agency is to predict the end of the small to midsized business.
Really nice , i am too glad for this post.
Thanks for the post
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Agency model suffers with old sales methodology of getting leads, the underlying problem is engagement of experience. Once the focus shifts from operating costs and focus on customer experience, the agency will do good even in worst time of business.
Engagement and experience are good things to focus on, but if they do not drive to a funnel that ends in a lead, what do you have but brand awareness without action. Maybe this is ok for the enterprise business, but small business does not have the budget for this type of marketing campaign.
You are say right that is fall of web designing and company not still back to his performance.
Problem is all these one man so called ‘web design experts’ who get a wordpress template and fill it in.
Well its not dying anytime soon. It is booming as all the businesses are coming over internet. The need of web design agencies is going to grow as more and more online businesses emerge.
Nice share though!
I don’t think the traditional web design agency is dying. Evolving maybe, but there are plenty of opportunities out there if you know where to look.
It’s easy to become pessimistic when there are so many so called experts and do it yourself site builders around. The problem is many web designers simply don’t care about their clients and do a poor job implementing some fancy looking template they found on theme forest. DIY site builders aren’t any better and in the wrong hands can be a disaster for your business and your brand.
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If a web design company changes it’s traditional working technology to work from WEB to MOBILE with Graphic design base in creative and flows through all technologies in web development and finishes off in mobile trends. Then it’s death is not possible.
this is nice articles but it is not right to say website designing company has dead but you can say that traditional website designing is going to back but number of new website designing agency are opening day by day and also number of website build in a day. great future in web designing agency in coming days. you need to change your work style. create responsive and creative web design.
I have been in the industry for quite a while now (10yrs+) and have been seeing many web agencies pop up and sadly use templates for their clients projects, I personally believe if a client is paying you X thousand you should give them something bespoke unless of course they want a template to keep costs down which, what is sad is I’m a designer at heart and frontend developer and when companies start using templates that limits my creativity and even may end me out of a job some day unless we move with the times and offer something that templates can’t such as a rich user experience as templates don’t think about your unique customer experience, it is sad to see the fact that there are less and less design jobs out there because of templates but sadly there isn’t much we can do about that. Due to more and more people being one man bands who buy a template for the client I have seen a lot of agencies disappear however some of these clients aren’t technical and even the one man bands don’t know how to edit a template so I think there will be still a place for web designers/frontend developers in the future although marginally smaller than what it once was.