Agencies Outsource More Work to Ad Tech Firms

Agencies may be reducing staff, but creative and production work still must get done. When it comes to multimedia ads, agencies increasingly have been subbing out production work to the tech firms enabling those ads. But agency layoffs are just one of the factors behind this trend.

“A lot of agencies had to scale back,” said Chris Baughman, AVP creative strategy at Gannett-owned PointRoll. “From a production standpoint, the needs are still there.”

The maker of rich media ad formats like “TomBoy” and “FatBoy” experienced a 100 percent increase in its creative and production services in Q1 of this year. And, in conjunction with the boost in demand for those services, PointRoll is hiring additional creative staff and regionalizing them so they’re based in the same time zones as their clients.

Outsourcing of some production or creative work to ad tech firms is nothing new: they’ve offered such services for years. Typically, the costs are relatively low, or sometimes included if the task is nominal or the campaign large.

“Clients are looking for ways they can be more efficient,” said Kyle Weisbrod, director of ad operations at EyeWonder, who said the firm has seen use of its production services rise since January. He believes the economic downturn has been a contributing factor as agency clients rein in personnel costs.

Not having enough people to handle quick turnaround and tight budget constraints is one thing. Not having people with the right skills is another. “The landscape changes so quickly, and it’s hard for the agencies on their own to keep up with all the emerging trends,” said PointRoll’s Baughman. “Their challenges are always that their clients want new, now, next.”

For Eyeblaster, clients have gravitated to new, more sophisticated ad formats requiring specific production skills that some agency staff may not be caught up on yet. HD video ads in particular are increasingly popular at the ad tech firm, said its VP Marketing Amit Rahav. “Ads that utilize this format require experienced developers and take longer to build than the typical banner,” he told ClickZ News.

He also said more business is coming through portals that, as opposed to ad agencies, have less ad production people in-house. Campaigns running in several countries also require more work, so sometimes agencies rely on Eyeblaster’s services in those cases. “These ads take longer to prepare; yet the lead time is rarely extended to the creative agency, so they will try where possible to leverage the services of the technology partner,” said Rahav.

Creative and production services can be as simple as resizing ads already created by the advertiser or agency, or may entail building animated Flash assets based on static images developed by the client. “We just are looking to help them expedite,” said Baughman.

Rich media tech firms stress that by providing such services they do not compete with their agency clients on the creative front. “We don’t want to take their business away from them,” said EyeWonder’s Weisbrod.

However, he said some agency clients have started bringing in rich media companies in the early stages of campaign development. “We’re seeing more clients requesting concepting creative… We’ve been brought in earlier in the process.”

EyeWonder has 14 specialists in-house that work directly with clients, two of whom focus primarily on creative services. The company also passes along creative work to its creative partners.

Finding the right people to produce rich media ads can be difficult. “It’s challenging because you have to be that agile crossover between really good designer…and have the ability to code at a certain level,” explained Baughman. PointRoll is currently expanding its West Coast creative team, and has over 20 people on the East Coast and close to that in the Midwest.

Despite the growth in creative outsourcing, Baughman believes overall online ad industry expansion will lead to more in-house digital creative and production staff at agencies. “As the economy rebounds…I think they will see a rehiring because we’re going to see a growth in the industry… There’s still always going to be a really strong need to have those creatives in-house.”