Design Matters

Does design really matter from a business perspective? The answer, according to a recent study by the U.K.-based Design Council, is a resounding “yes.”

In a study published in February, the Design Council took a look at the Financial Times and London Stock Exchange (FTS)E stock market performance of companies that placed an emphasis on design. It then tracked the performance of these stocks from 1994 to 2003. The results are astounding.

After weeding out companies that were delisted during that period, the Design Council discovered 166 “design-lead” companies that outperformed the market by 200 percent during the study’s span. Even 2000-2003’s bear market, companies that emphasized design (and won design awards) performed better than those that didn’t. They lost less value when times were tough and recovered more when things got better. There’s more detail available in the study.

What does this have to do with Web development and marketing? Everything.

One of the biggest changes over the past decade, after the Internet industry really got going, has been a move toward commoditization. In the early days, when new technologies were developed at an amazing pace, the industry changed daily, and money flew in at historic rates, most of us in this biz were just beginning to figure out what we were doing. Consumers were new to the industry, too. They used to be excited about the Internet simply because it was the Internet. Remember Web surfing?

Today the Internet is a fact of life for nearly everyone. It’s ceased being a novelty in its own right. No one sits down to randomly surf anymore (who’s got the time?). Instead, people have figured out how the Web fits into their lives and how they need to use it. The shift in behavior is toward the functional: Users go online to get stuff done (even if that “stuff” is entertainment).

The crash changed everything. It popped both economic and emotional bubbles. It made everyone step back and think about what they were really excited about in the first place. Over time, most people (especially consumers) have become blasé about the whole thing. We use the Web because we have to, but using it is no longer an activity in and of itself. It’s a coming of age: When you’re underage, acquiring booze is the activity, which makes it all a lot more exciting. Turn 21, and drinking ceases to become the exciting activity once was. (At least, that’s what people tell me.)

So far as Web development goes, things have gone the same way. In the early days, we had to create all the tools we sold our clients from scratch. There was little off-the-shelf software of note. Everything from content management systems to databases to email marketing systems were homegrown. Differentiation stemmed from the ability to do absolutely everything: design, market, develop, engineer. Investment in companies that could do this ran high.

Things are no longer the same. The industry has matured and fragmented into specialized disciplines. Few Web development firms do everything anymore. Almost no one rolls his own email systems, CMSs, registration tools, or other fixtures of contemporary Web sites. We buy them off the shelf, selecting from a pool of basically similar products (within different price ranges), integrate them, and switch everything on. There’s little in the way of innovation when it comes to Web applications these days; we all know what to expect, where to get it, and what it’s going to do.

All but the most naive clients understand this. Most companies, if they know what they’re doing, expect the Web companies they hire will be able to do everything, from search engine optimization (SEO), email, and online advertising to application development, content management, and design. They understand the various services are often integrated and brought to them via partnerships or managed independently in a vendor pool.

Performance matters, obviously, but the playing field is becoming increasingly more level as consolidation occurs and more companies turn to a mature base of off-the-shelf products. Need an HTTP server? You’re probably going to use Apache or Internet Information Services (IIS), or (if you’re a bit wacky) Apple’s X server. Need email marketing? You’re probably going to turn to one of the four or five vendors most of us can name. Need a CMS? Your choices are limited there, too. You get the point.

As companies that struggle to differentiate ourselves in the marketplace, where do we turn? Design.

I mean design in its broadest sense: “Design” as a synonym for a process that provides high value and superior experience to the audiences we’re communicating with. This could mean graphic design, interactive design, even the design of a campaign that ties multiple media together in a creative fashion.

Design and creativity — innovation through creative thinking first — will keep the pipeline full and make us (no matter what our specialty) stand out from the competition.

I’ll be on a panel this Wednesday at the Jupiter Advertising Forum discussing where agencies fit in the new world of advertising. In a way, I’m thinking unless agencies learn to embrace creativity’s value, they’re not going to fit in anywhere. Those of us in the agency biz have seen our roles go from the CEO’s right-hand consultant to vendor over the past couple of decades, a process accelerated by the Internet’s growth and the increasing number of specializations needed to service clients in a rapidly expanding media field.

I’ve written about this before. I believe unless agencies return to their roots and become the creative force behind the brand, they risk becoming completely irrelevant. There’s a measurable economic value in design. It’s time we embraced that value and became its champions before we slide into irrelevance.

Meet Sean at ClickZ’s upcoming AdForum. Join us for Search Engine Strategies in August.

Vote for your favorite product or campaign from July 20 through close of business August 2.

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