SoDA :: 2019 Year in Review

a global network of digital agency founders,
creative innovators and technology disruptors.:

We hope this note finds you closing out a strong year and sailing into a restful holiday. We know
that every day in this business can be full of ups, downs, ins, outs and all arounds. If you’re
not laughing, you’re crying... and sometimes both at the same time. Here at SoDA, we’re super
grateful to work with a group of leaders that embody the best of our industry: restless creative
vision, scrappy entrepreneurialism, progressive company cultures, commitment to craft and a
generosity of spirit.
The SoDA community spans 95 agencies, covers more than 20 countries and represents an
incredible network of digital agencies, product design studios, experiential agencies, production
companies, digital consultancies and everything in between. And while we continue to diversify
the membership, we are all (at the heart of what we do), digital experience makers with a serious
commitment to excellence and a belief that everyone in the community stands to gain when we
collaborate and share with one another.
Just good has never been good enough for the SoDA community and 2019 continues to prove
the point. Consider the following:
• At the 23rd Annual Webby Awards (e.g. “The Oscars of the Internet”), SoDA member
submissions were honored nearly 120 times with a total of 26 wins in the community. Even if
you don’t focus on industry awards, this is such an impressive showing and speaks to the
innovation and caliber of creative work coming out of this group.
• Rob Ford, Founder of the FWA, just released a ground-breaking book charting the history of
innovation and creative excellence in the digital world. Web Design – The Evolution of the Digital
World from 1990 – Today features no less than 20 SoDA member agencies (current and previous),
many of which appear with multiple projects and in-depth quotations. There no doubt this is a
group of pioneers, creative visionaries and limit-pushers.
• Forrester Research is beginning to amp up their coverage of the digital agency landscape and
the SoDA community sits at the epicenter. In a new report released in November (Supercharge
Your Marketing With Creatively Focused Digital Agencies – Ten Digital Agencies We’re Watching) 8 of the 10
agencies featured are SoDA members. I like the odds!
2019 was a busy year for us and it’s been such an honor to work with you and your teams.
As we look back on the year, we wanted to capture just a sliver of the incredible perspectives,
contributions, highlights and good times.
We hope you enjoy this year-in-review and, more importantly, wish you and your teams and
wonderful holiday and New Year – one that’s full of friends, family, laughter, pets, passion projects
and plenty of time to unplug and recharge for 2020.
There’s no doubt you’re in great company with the SoDA community and each of you is part of
that greatness.
Peace.
Tom, Kendyll, Lakai and Jess
Hello SoDA Community!Hello SoDA Community!

24. Building a
Foundation for
AI Personalization
28. How the Digital
Era Has Redefined
Brand Experience
32. How Brands
Accelerate Digital
Transformation
34. Trends Shaping
Tomorrow
Global Digital Outlook
Key Findings
39. Can SoDA
Save the World?
6. Design for Change
A Letter from the 2019
SoDA Report Guest Editor
8. Digital Disrupts
Digital: Adapt or Die?
10. Do Good Now
5 Non-Negotiables for
Taking Your Brand Into
the Future
13. Project Profitability
(aka Unit Economics)
20. Room 250
22. Effective Capacity
Planning is Rooted in
Tools, Communication,
& Team Alignment
40. A Case for Agency
Design Systems
42. Building the Best
Personalized
Experience for
Your Consumers
44. The State of
Augmented Reality
47. Excerpts from
The Tao of Digital
Agency Profitability
52. The Agency
as Innovator
2. 2019 SoDA
Members
4. 2019
Highlights
54. SoDA Members
Making History
56. Board of
Directors
1630
CO
NT
EN
TS
31

It was a busy year for the SoDA community and our efforts focused
on collaboration, knowledge-sharing, research, thought leadership
and best-practices discussions. This is just a snapshot of some
of the programs and resources released in 2019.
SoDA resources can be accessed on our
primary website at www.sodaspeaks.com
and through our member portal at
www.sodaspeaks.com/member-portal.
2019 Program Highlights
4

5
Benchmarking Studies
- Salary & Compensation
- KPI Financial Performance
- Global Trends in Personalization
- Operational Performance Measurement
- Future Agency Model
- Global Digital Outlook
SoDA Sessions
- Trends in AR, VR and Mixed Reality (B-Reel in Venice)
- Musings on the Industry (Big Spaceship in DUMBO)
- SoDA Meet-up at SxSW in Austin
SoDA Report On Series
- Agency Operating Practices
- Global Trends in Personalization
- Trends in AR, VR & Mixed Reality
- Metrics that Drive Business Excellence
Webinar Series
- Equality, Diversity & Inclusion
- Conversational AI in Retail
- CMO Guide to Personalization
- A Sound Approach to Designing for Voice
And many more...
Global Member Meeting
The End of the Beginning
(Nashville, TN)
Virtual Creative
Jam for Good
A partnership with SoDA,
Adobe XD and the Made of
Millions Foundation
Executive Forum
Discussion Threads
A vibrant and
always-on knowledge
exchange with 300+
leaders across 20+
countries on nearly
any aspect of running
your business – operations,
finance, legal, talent,
sales/marketing, strategic
development and more.

D
esign for change. It’s both a call to internal ac-
tion and a promise to market for the agencies
that make up SoDA. Most of us carved out our
niche as digital agencies and production shops before
digging our way up, out-and-in to roles as the AOR,
innovation partner, product company and so much
more. And all of us are driven by an existential ques-
tion that can either trigger dread or make you dream:
are we still relevant to our clients? And can we help
them stay relevant to theirs? And if so, for how much
longer?
We used to be able to roadmap our tech stack and
talent needs to the beat of a three-year digital drum.
Today? We’re happy if our position and proposition
can survive the calendar year. As our industry con-
solidates, we end up racing to the middle, with the
distinct lines of separation between networks, digital
indies, consultancies and the variety of innovation,
product and production offerings not just blurred, but
forever broken.
Design for change means finding higher ground, that’s
the only way to stay relevant and stay a step ahead
in the eternal race to the bottom. And that’s not just
our challenge. Brands and businesses across industries
know one thing for sure, change is either here or it’s
coming soon, and the next wave of technology, user
behavior and digital service will either wash you away
or lift you up.
Again, that can trigger dread, or it can make you
dream of new models; new ways of working and
creating value. Wake up any SoDA member in the
middle of the night1
and we can recite the industry
expectations: deliver it faster, for less, and show that
it drives results. Manage that? Great! Welcome to the
middle, a circle pit of (c)agencies2
and “partners” jos-
tling for position with creds, decks and pitches that are
interchangeable to most clients. The irony has always
been that for an industry selling the value of distinc-
tion, so few of us are distinct3
.
Higher ground means being able to help clients inno-
vate, shepherding their ever rising digital spend to and
through the right platforms and channels, and pro-
viding transparency so they can launch and learn. It’s
about supporting in-house teams—and maybe even
helping staff them—taking short term cuts to client
revenue to maintain long term relationships. It’s about
finding comfort in clients that might no longer be re-
tained by contract, but become retained by the nature
of your ability to plug and play into whatever happens
now, what’s near, and what comes next.
Design for Change:
A Letter from the 2019 SoDA Report
Guest Editor
written by wesley ter haar

For many SoDA agencies this is where we can make
a true difference. We are, above all else, a network of
entrepreneurs. Our services and products are a base-
line, the middle if you will. It’s high time we focus not
just on our own revenue and growth, but start selfishly
extending that to our clients’ challenges and P&L’s.
If we don’t, many of them won’t be here five years
from now. Let’s scale up the idea of the agile product
owner to the breadth of our clients’ business and own
our entrepreneurial distinction. It will allow us to be
consultative and creative in ways that others can’t,
and flexible in ways impossible to implement
for many.
On a personal note, I believe the best version of
our company is a perpetual motion machine. Never
settling or finding its final form. Our ability to change,
both in small ways and big, is in direct correlation to
the growth of MediaMonks. Growth is driven by two
key components: the ability to handle stressors and
friction—both in ample supply in an ever-changing
landscape—and finding space. Finding space gives
the ability to see, and then move into areas of growth.
Our recent merger with S4Capital is an example of
that, a broad and brawny call to change the status
quo. To strip away silos, integrate production and
performance, and take a stand that creative, quality,
and craft combined will forever be a distinction worth
paying for.
Finally, this leaves me with my hope that you enjoy
this year’s SoDA Report, delivered in close collabora-
tion with our friends at Forrester and the input from
the biggest collection of dreaders and dreamers in our
industry. Welcome to the front-line of change, and
as you read this, keep in mind that our members are
already thinking about what comes next. •
1
They’re probably still awake thinking about this,
it’s what we do
2
I hear consulgency lost out by one vote
3
Google “700 ad agency philosophies and taglines”
for a depressing scroll session
Wesley co-founded MediaMonks in 2001 to wage war on mediocre
digital production, working tirelessly to grow it into a creative pro-
duction powerhouse with global reach and recognition since. Acting as
MediaMonks’ COO, Wesley’s a self-described ‘lifeline for deadlines’
and ‘Project Manager of Project Managers’. Next to MediaMonks,
Wesley sits on the board of S4Capital, alongside Sir Martin Sorrell.
“It’s about finding
comfort in clients that
might no longer be
retained by contract,
but become retained
by the nature of your
ability to plug and play
into whatever happens
now, what’s near,
and what comes next.”
7

I
n the past 20 years we have seen digital technolo-
gies disrupt every facet of the economy. We have
watched Napster and Spotify revolutionize music
consumption, Netflix challenge film and TV produc-
tion, and dominant companies like Kodak and Nokia
disappear in under a decade.
As leaders of digital agencies we have always been the
beneficiaries of this disruption—from designing and
building websites to developing products and appli-
cations, we have helped our clients navigate a new
digital economy. However, in 2015 as I set about to
prepare my annual ‘Noise Vision’ presentation, I was
struggling to find a core theme that I could commu-
nicate to my team—what were the new technologies
or platforms that we would need to master? In past
years, I pronounced the ‘year of mobile’, ‘the year of
social’, or the ‘year of data’ and so on. Staring at my
screen for hours only increased my anxiety over what
I knew was coming… Digital is disrupting digital.
After 20 years of consulting with our clients I knew
that there was one immutable truth, digital is the great
invisible hand of disintermediation. If our clients
were in retail, manufacturing or CPG, we advocated
the value of transforming around a direct to consum-
er model—a digital experience predicated upon a
personalized data driven strategy. “Know your data,
know your customer,” we preached. Now it was our
turn, I could see the signs and I knew we would need
to design a new business model to succeed in a world
of production commoditization, shrinking margins
and intense competition. We all know the agency
model is changing. Big or small, we are all reacting
to fractured customer behavior, the death of brand
advertising as we have known it, massive disruption in
retail and a persistent deflationary economic envi-
ronment. I knew that adding new services or hiring
a few data scientists would not be enough to stave off
being disrupted. Noise needed to transform the way in
which we created value, not only for our clients but to
ensure our business survived.
8
Digital
Disrupts
Digital:
Adapt
or Die?
written by Trevor Carr
“We are all reacting
to fractured customer
behavior, the death of
brand advertising as we
have known it, massive
disruption in retail and
a persistent deflationary
economic environment.”

We have seen economic value shifting from pure mon-
etary denomination (profits) towards ‘owning’ the rela-
tionship with consumers through data. A Sybase study
by the University of Texas “Measuring the Business
Impacts of Effective Data” found that a 10% increase
in actionable data for a typical Fortune 1000 company
resulted in a $2 Billion increase in revenue. Amazon
and other platform companies have built their entire
businesses on this premise. For an agency like Noise,
we needed a new value proposition that leveraged our
customers first party data and delivered personalized
experiences at scale. Faced with these current reali-
ties, I decided to pull off the proverbial band-aid and
re-build Noise with a new agency vision—Agency as
Platform (AAP).
This vision was based on Noise’s experience utilizing
algorithmic data platforms like DSPs and DMPs that
allowed our media and analytics teams to leverage
data for buying media. Using data as our connective
tissue we separated the platform from the consulting
business, allowing us to shift from a linear ‘pipeline’ to
an exponential organizational framework—we need-
ed to achieve scale without the traditional overhead
increase.
Noise was re-positioned as a marketing consulting
company that leverages technology to help our clients
achieve digital transformation using their own data.
In parallel, we launched our new company: Fastloop,
a marketing platform that helps translate data acqui-
sition into customer acquisition. Fastloop integrates
paid media and owned data with sophisticated attri-
bution and analytics models to surface performance
and marketing insights allowing our customers to
make impactful business decisions. The launch of
Fastloop is perfectly timed in a marketplace where
CMOs are increasing spending on in-house capabili-
ties like programmatic media buying as well
as increasing investment in measurement and
analytics capabilities.
So, how is this a platform and what do I mean by an
exponential framework? I’ll borrow a quote from Bill
Gates to explain what I mean: “A platform is when
the economic value of everybody that uses it, exceeds
the value of the company that creates it.” This is the
philosophy Fastloop was born from, as we add more
data to the Fastloop platform our customers derive
exponentially more value from the platform without
incurring incremental cost—the more data we gener-
ate the less cost we spend on leveraging it. Our reve-
nue model has also shifted to include both a managed
service offering as well as a self-service one that will
allow for clients to transition key data and media buy-
ing functions to in-house teams.
The collection, processing and use of first party data
will become the critical competitive advantage for
modern enterprises. From my perspective, data has
replaced brand as the key metric for success for all
marketing endeavors. As the cost of data processing
and technology continues to decrease, the cost of
entry will only become easier for small start-ups who
can design, deploy and sell a product in a matter of
months. This paradigm shift will continue to become
a significant challenge for large CPG companies who
are handcuffed by complex product development
and retail logistics. Noise was able to transform our
traditional digital agency model by developing a new
‘agency as a platform’ model that is feature-built for a
new ‘exponential era’. An era where data becomes the
true measure of economic value and influence.
This era is forcing us all to adapt or die.
What will you do? •
Trevor began his career in 1996 by taking a Senior ‘New Media’
Director role at a boutique agency in Los Angeles at a time when
animated Gifs were at the pinnacle of innovation. After two years in
LA, Trevor started to refer to himself in the third person and knew
he needed to come back to Canada where he set up his own digital
agency in beautiful Vancouver, B.C. Presently, Trevor runs the strategy
and media departments at Noise; in addition to his executive role as
President and CEO.
9

F
L
C
B
T
he millennial demographic
tsunami coupled with a ris-
ing tide of technology washed
away traditional marketing prac-
tices driven primarily by “selling”
and created a new landscape for
companies.
And what’s one big demand Mil-
lennials bring to the checkout
counter? Increased social respon-
sibility. Every brand must take
heed or miss out on the projected
$1.4 trillion Millennials will dump
in the retail market by 2020, ac-
cording to Statista projections.
To earn that business, companies
– and the agencies helping them
– must do good now. We’ve com-
piled five key principles for doing
good the right way. Even if you or
your clients already do good, re-
fining according to these princi-
ples is essential for future success.
Create something good that
lasts. Everyone loses when
lowest price is the focus.
Creating beautiful, useful things
that last for a long time has be-
come a clear differentiator. This
holds especially true for younger
shoppers.
Plus, it’s hard to compete on price
alone. You can’t beat Walmart,
Target, Amazon or other big box
retailers at their own game. When
you emphasize lasting value in-
stead, the rest falls into place.
Conscious consumers are reject-
ing the pervasive, one-time-use
culture and seeking products they
can rely on – goods with a story,
dise, the people you hire and even
how to speak up when political
controversy erupts.
Look to the long term.
It makes things “stick.”
Change doesn’t happen overnight.
Especially when you’re meticu-
lous about crafting a systemic ap-
proach designed for the long haul.
Consider the “stickiness” adi-
das created through their re-
cent collaboration with Parley
for the Oceans. In 2015, adidas
made waves when it partnered
with aquatic advocates Parley for
the Oceans to give plastic beach
waste a second life as performance
footwear. The adidas x Parley Ul-
traBOOST collection launched
using Econyl thread, a technical
fiber made from this plastic trash
that functions like nylon. Each
shoe removes 11 plastic bottles
from oceans and beaches.
Designing for the long-term means
committing to something that’s
bigger than your brand alone –
and that’s a story people want to
hear and join.
Fill the room with people
who know more than you.
If you’re the smartest person in the
room, you’re in the wrong room.
Gather in people who know more
and have different strengths to fill
gaps or weaknesses. It’s important
to talk to the right people, or rath-
er, listen to them.
These conversations should be
ongoing and constantly evolving,
things that get better with age.
Your customers want to feel good
about what they wear, use and
consume.
Brands who don’t embrace this
shift are bound to find themselves
designing for the landfill.
Be mission driven.
It attracts the RIGHT
customers.
We live in a polarized world, which
makes it increasingly difficult for
brands to avoid taking a stand. So
how do successful brands navigate
this landscape pockmarked with
sensitive pitfalls?
Know who you are. Understand
your mission. And align every-
thing you do around that.
A few years ago, “authenticity”
was the big buzzword. Brands
needed to be “true to themselves”
and own the good and the bad
of their business. But being mis-
sion-driven goes deeper. When
your brand is driven by both val-
ues and purpose, you don’t just
know who you are, you know who
you WANT to be, and you work to
get there. A mission-driven com-
pany understands they’re not per-
fect, but they have a roadmap in
hand for making the world a bet-
ter place.
Reframe the idea of your brand,
your ethos, your place in the
world. Know what sacrifices
you’re willing to make in order to
do the right thing. Think past the
obvious environmental impacts to
the people crafting your merchan-
11

H
just like our world and the marketing landscape.
Keep an eye on what your colleagues and com-
petitors are creating and doing. When we collab-
orate and inspire each other, creativity increases
and innovation makes the world a better place.
Have hope. It’s worth it.
The next chapter for the fashion industry (among
others) will unfold only through innovation, prac-
tical action and a commitment to working toward
the solutions. A perfect example: The Amster-
dam-based organization Fashion for Good. They
promote collaboration around circular fashion,
or the idea that conscientious consumers shop for
VALUE and buy things that last.
All in all, there’s a lot to be optimistic about.
The founder of Taylor Stitch said something
that’s really stuck with us: “I believe business is
the best source of change. I think profits mean
you have money to do something good.”
Wow, right? Maybe that’s not how the average
CEO sees it. But if you want to be mission-driv-
en, this is a good place to start. •
Heather McWilliams Mierzejewski joined VOLTAGE in
2015 after escaping journalism’s tentacles. She crafts accu-
rate, relevant and creative copy and thrives in detail-oriented,
deadline-driven situations. She relishes telling clients’ stories
and is dedicated to teamwork, quality and connection. She’s
passionate about innovation, creativity, and people.
“I believe business is
the best source of change.
I think profits mean you
have money to do
something good.”
12

Project Profitability (or “Unit Economics”) is a prof-
it and loss measure of a firm’s smallest economic
unit—a project.
It is a fundamental KPI for agencies where project
teams operate with a high degree of autonomy. A
well-conceived and executed process for managing
unit economics allows agencies to quickly and confi-
dently assess economic performance (at any level of
granularity and cross-section) so that management
attention can be optimally focused (on economic is-
sues or otherwise). The resulting operational maturity
is essential for managing operations at scale or during
rapid growth.
Unfortunately, many agencies struggle with the
process of managing unit performance. As identi-
fied within the accompanying research, only 20% of
agency respondents report using partially automated
systems for tracking profitability. Most agencies rely
on a collection of point solutions rather than a Pro-
fessional Services Automation system (a “PSA” where
time, resourcing and commercial terms are integrated
within the same system. It isn’t surprising that 84% of
agencies report regular budget overages on projects.
If you are looking to upgrade your process for manag-
ing project profitability, consider the following:
It Is A Process, Not Just A Measurement
• Cadence – Bad news doesn’t age well. The goal
is to be able to react quickly to mitigate issues.
For most agencies, a weekly meeting will allow
account/project managers to take action before it
is too late to: make design and scoping decisions,
manage client expectations, team changes, initiate
change requests, etc.
• Set red, yellow, green targets for Gross Margin
and RPH and share them widely. I believe that
50% gross margin is a reasonable starting place
for most agencies. Rate per hour is highly variable
based on your location and associated labor costs.
• Pricing – Start measuring profitability in the sales
process when determining the price—this will
provide valuable insights for pricing future deals,
managing risk and help reduce finger pointing
after kick-off.
• Focus on forecasting future performance. The past
is only useful as an indicator of what will happen
tomorrow. Conversely, one definition of insanity is
doing the same thing over and over and expecting
different results. A PSA will point you where and
how you need to take action to change outcomes.
• Track changes from week to week. By watching
the changes over the prior 4-5 weeks, you will
be able to see underperformance trends as they
emerge—don’t wait until you cross thresholds to
take action.
• Your process should include your partners/execs,
heads of account and project management and
possibly other departmental leaders.
Automation
• The system that is used to assess profitability needs
to be 100% automated1
. Time cards, scheduling
(and contract changes) are the inputs and revenue,
costs and gross margin are the outputs.
• Full automation almost definitely means you need
PROJECT PROFITABILITY
(aka unit economics) Written by
Tamir Scheinok
13

to purchase a PSA system. The core functionality
of a PSA has time entry and resourcing at its core.
Once a project is set up with bill rate, cost rates,
and commercial terms, time (past) and resourcing
(future) you can report on revenue, costs, and prof-
itability in an automated manner. It is imperative
that time, expense, resourcing, and commercial
terms are in the same system—integrating differ-
ent point solutions won’t work nearly as well.
1
I am not exaggerating about this point. Aside from
time, schedule and contract inputs, profitability
reports need to fully automated. If not, the manual
step (and persons who take it) will be a bottleneck or
worse. Teams should be able to assess profitability
from the PSA directly and independently.
Consistency Is More Important Than Accura-
cy – This is NOT an accounting exercise
• Consistent Measures. It is essential that the as-
sumptions used to measure profitability (e.g.,cost
rates) are consistently applied across, people,
projects and periods – this will enable high-integ-
rity comparison between project types, periods
(proposal vs. completion), and different teams as
economic performance is impacted solely by how
much revenue is generated and the hours (and
cost rate) consumed in the process.
• About once a year you can assess if changes to
cost rates are needed. It is better to add a few per-
centage points now to account for inflation and go
2-3 years without requiring modifications.
• Simplicity will help you achieve consistency. For
instance, use average salary not actual salary
to calculate cost rates. Organize your staff into
groupings (or band – 8 is more than enough, even
for large organizations) and use average salaries
for each group. With this approach, for example,
the cost of two different Sr. Engineers will be
the same, even though salaries can vary across
a group by 20-30%. Each line on your Bill Rate
card should have exactly one cost rate associated
with it.
• Don’t take overtime or exempt salaries into ac-
count. The 41st hour should be treated the same
as the 1st.
• Keep utilization assumptions simple (which are
part of labor costs – see below)—use one number
of the whole agency and be conservative (e.g.,
1550 billable hours).
• Be careful to avoid creating incentives to use free-
lance labor. If you need to artificially increase cost
rates for freelance labor, do so by applying a load
factor.
• Be conservative. It is better for your measurement
process to indicate slightly worse performance
than reality.
• Pay attention to differences between your average
project gross margin and the gross margin on your
income statement. Large differences suggest issues
with your cost rates.
Measurements
Percent Complete = Actual Labor / (Actual Labor
+ Remaining Labor)
Labor can be measured as Costs (best) or Hours
Revenue to Date = Percent Complete * Total Con-
tract Value
Works for T+M and Fixed Fee
Current Period Revenue = Revenue to Date -
Sum of Prior Period Revenue
The math looks simple here, but you really need a PSA to track
revenue.
Direct Costs = Costs Associated with Fulfilling
Contractual Obligations (Loaded Labor and
Expenses)
Do not include sales costs
14

Loaded Labor Costs = (Annual Salary * Payroll
Tax and Benefit Load) / Billable Hours Per Year
For Example, $100k per year employee has a $78 Cost Rate
Per Hour
($100,000 * 125%) / 1,600 (be realistic and conservative)
Gross Profit = Revenue - Direct Costs
Gross Margin = Gross Profit / Revenue
Rate Per Hour (RPH) = Revenue / Hours
Pulling It All Together
• Get a PSA.
• Validate/Audit your Bill and Cost Rates.
• Set Targets for Gross Margin and RPH.
• Integrate these principals into your pricing
process.
• Meet with core team frequently (weekly, one-hour,
regular time). Finance scrubs numbers for data
validation (did hours get added before the change
request was added?).
• Review the projects below thresholds or with big-
gest movement from the prior week. It should be
obvious to everyone where attention is needed.
• Test your assumptions periodically (hopefully not
more than every few years)
With success, this will free up more time to focus on
the work. Good luck! •
Tamir Scheinok is a co-founder of Fluid and was COO and CFO
from 1999 until Fluid was sold to Astound Commerce in 2018.
Astound is a digital commerce agency with operations in North
America, UK, Germany, Colombia, and Eastern Europe.
15

One of my favorites! The city,
venue, people and smooth operations
made it one to remember.
Johnathan Tann, SoDA Board
One of, if not the best
GMM I’ve been part of in my
10 plus years attending!
Andrew Howlett, Struck
This year’s GMM was really amazing, I felt the content was above
the standard we had previously set and the flow of the event was
really great. The venue was fantastic, creative, great energy and
the audio system was perfect. A Great GMM!
russ Whitman, globant

Great exchange and inspiration. Frankly speaking,
the conference exceeded my expectations, I’ve rarely
been on a conference where I could get so much for my
business and me personally out of it.
Christopher Roskowetz, Jung von Matt/TECH
group hug X hot coals
in my undies (nurture and
challenge in equal measure)
jonathan hawke, Resn
Felt this was the best year, yet, that
I’ve attended. The scheduling of keynote
and member speakers was really great.
Kemp Attwood, Area 17
I’ve been told for years
now how incredible, how
cathartic, how interesting,
how humbling GMM is. And I
was like yeah, yeah, yeah
but it turns out it’s even
more amazing than what it was
explained to be. I learned
so much, met so many amazing
people and had so many
valuable conversations.
Katherine Cochran, metajive

F
irst, a quick intro. My name is Halli. I am the
founder of an agency called Ueno. And I am
in a wheelchair. These facts will be important
later, I promise.
And now, the story.
Last August, we at Ueno had our third annual
retreat. During the retreat all our offices come
together to work and play for a week. This year
we all went together to upstate New York.
We stayed at a hotel that was supposed to be
accessible for wheelchairs. In theory it was. But
as is often the case, it really wasn’t.
There were accessibility issues here and there
that ranged from mildly annoying to semi enrag-
ing. But the biggest one, and the one that broke
my heart, was a surprise to even me.
We had a couple of last-minute cancellations
and because of that we had an empty room that
we didn’t use for our employees—Room 250.
Some of our people decided that this would be a
great place to gather one night. People came to
Room 250 that night to have fun, they laughed
and drank and played and sang. By all accounts
it was a great night.
But as I was making my way to the room, I
quickly found out that there was no elevator up
to the second floor. There were only stairs. And
wheelchairs famously don’t go up stairs.
I didn’t tell anyone at the time because I didn’t
want to make a big deal out of it. I didn’t want
to show my pain or break their fun.
To fully understand why this was a big thing for
me you need to know my history.
room 250
by Haraldur
Thorleifsson

You need to know about the time my friends
went backpacking through Asia and I wanted
to go so bad that it physically hurt. But I
couldn’t because the hostels and trains were
not accessible.
You need to know that I once went to Disney-
land and after looking for a while I finally found
a ride that I could take. Only to find out, after
waiting for 30 minutes in line, that it actually
wasn’t accessible. I had dared to think I could
participate, and I was so devastated when I
found out that I couldn’t that I broke down cry-
ing in front of my daughter. I was 37 years old.
And, you need to know that even though I try
to push myself, sometimes I self-select out of
situations if I think there is a possibility that the
location isn’t accessible because it’s so hard to
handle the disappointment and the anger. And
this might sound weird, the humiliation.
But even if you know all of that, you still don’t
know me. You don’t know about all the thou-
sands of things that have happened to me. And
you don’t know how all those things came flood-
ing back when I couldn’t get to Room 250.
In isolation not getting to one room, one night, is
not a big deal. But nothing happens in isolation.
At SoDA, we all work at places that have dif-
ferent people with different backgrounds and
different stories. Some of their stories will be
about how their gender or their identity was used
against them. Some of them will be about how
the color of their skin has been systematically
used to push them down all their lives.
Their stories will most likely include a mix of
a few deep cuts and hundreds or thousands of
papercuts. Big and small interactions every day
that constantly remind them of the limitations
the world has created for them.
As leaders it’s our duty to understand that when
someone speaks up about something that to us
might in isolation not seem that big, they are
coming from a place we might not fully un-
derstand. They are often coming from a place
where that incident is just one in a long line of
injustices.
When they do speak up, our first job is to listen.
Our second job is to applaud them for speak-
ing up, so we can create a culture where people
know they will be heard and supported. Where
all voices are included and welcomed.
We all have our Room 250. We all have pain in
our lives that nobody else will ever fully under-
stand. Talking about it won’t necessarily solve ev-
erything, but from experience I can tell you that
finding people that are willing to listen without
judging or pitying is extremely validating. •
Haraldur “Halli” Thorleifsson is the founder and CEO of
Ueno, a full-service digital agency with offices in San Francis-
co, New York, Los Angeles and Iceland. There he oversees all
aspects of the creative process, including branding, visual and
interactive design, motion and code.
21

O
n paper, capacity planning should be very sim-
ple, right? Multiply this, divide by that, calculate
billable utilization, average bill rate, and bam...a
revenue forecast to help drive your sales pipeline.
Ok, if only it really were that easy.
Balancing your sales pipeline and your capacity to
produce great work is always going to be a challenge,
especially when we see shifting needs within our
industry. Clients want projects faster to market, which
means work needs to move faster to production immi-
nently once it is signed on the dotted line. And so, the
race begins!
Most digital agencies don’t have the luxury of an
on-demand team ready to dedicate 100% of their
time to a project with little or no notice. The common
challenges of the industry leadership are balancing
profit margins with overworked employees, compro-
mised client service due to insufficient resources, or
equally challenging is reduced quality of work from
the same overextended pool.
More than 100 key-stakeholders at digital
agencies view “New Business Pipeline vs. Ca-
pacity” as an “important” to “very-import-
ant” KPI in managing their agencies.
The first step in managing sales vs. capacity is having
the right tools and automated systems to manage your
sales pipeline and resource allocation. The good news
is that while these automated tools are ever evolving,
and continue to deliver great value, there is no quick
EFFECTIVE CAPACITY PLANNING IS
ROOTED IN TOOLS, COMMUNICATION,
& TEAM ALIGNMENT written by Jenn DePauw
22

switch to plan your capacity. Once you have done
your research—and found the tool that is right for
your team—there is still going to be a level of human
interaction needed to guide your capacity planning.
A capable team that is able to manage the necessary
data points is key.
Project Managers and Business Development team
alignment is imperative in order to plan for resources.
PMs typically have the clearest visibility into current
capacity and assignments, but also have a view into
things like team stress level and morale. Meeting the
expectations for the expediency demanded by the cli-
ent can often lead to higher levels of stress and lower
levels of employee satisfaction – two things that often
have a direct effect on efficiency and quality of work.
A common vernacular across your team will ensure
that everyone is level set to the same expectations. At
The1stMovement, we have a Sales Stage Definition
list that defines the criteria to calculate a percent to
close so when a 75% prediction is identified, it holds
some weight because criteria has been set to define
that percentage. This allows us to layer onto the
definitions the engagement level needed for resource
planning. For example, when a lead is at 25%, biz dev
is in the discovery stage – finding out what is the need,
how long it takes to make a decision, who the decision
makers are, etc. At this point the PM can begin to
provide insight and information on past/similar proj-
ects. This level of engagement increases as the lead
moves through the pipeline and towards the finish
line, along the way the PM and Biz Dev have a finger
on the pulse of capacity.
From a project management perspective,
key-stakeholders at digital agencies see
“lack of view into over-servicing clients”
as the issue that has the most impact on
agency profits.
Yes, over-servicing of clients has a direct impact on
profitability because you are essentially giving your
services away. It also has an impact on your capacity
planning by slowly eating away at available resourc-
es. This allows it to creep into your culture, which
ultimately can lead to lower employee satisfaction
and lower productivity. Let’s face it, it’s hard to see
real value in something you are giving away for free.
Spend time to go over what is included in the SOW,
understand the objectives and the role your team
plays, and then empower your team to make deci-
sions, or take action, when they see a project going
off the rails.
Pipeline vs. Capacity comes down to good data, good
communication, and realistic expectations. Sell re-
alistic lead times whenever possible to allow time to
plan resources effectively. Communicate expectations
internally. When everyone understands the nuances
of the project and the level of service needed, it’s
easier to identify areas of over-servicing. And lastly,
appreciate the value that you provide to your clients.
When everyone is aligned on the value of the service
you are selling, managing capacity can be done much
more effectively. •
Jenn DePauw is the Managing Director of The1stMovement, a
digital agency with offices in Los Angeles, Denver and Hong Kong.
23

M
ost companies know that personalization is an effective
way to increase relevance and build long-term customer
relationships. In fact, 93% of marketers agree that person-
alization helps to advance customer relationships (Evergage).
However, many companies still struggle to deliver personalized
experiences.
The problem isn’t the ability to deliver targeted information to
an individual user, but rather to deliver personalization at scale.
It’s easy to think about five or 10 variations of an experience,
but what about millions? This why many organizations are
looking towards artificial intelligence as a way to automate
personalization.
The potential for AI is unbound. With machine learning, we
can use data to observe, understand and anticipate the needs of
customers. However, AI isn’t a silver bullet that’s going to do all
of the work for you. You first have to develop a strategy around
personalization and then use technology to enable it.

Understand the Journey from the Customer’s
Point of View
Creating an effective personalization strategy starts
with understanding the customer journey. The goal is
to be able to customize every touchpoint to match the
individual’s needs, preferences, and intent. To achieve
this, you have to develop a 360-degree view of the
customer and then identify opportunities to improve
their experience with relevant content, offers, and
calls to action.
You also have to consider that your customers’ jour-
neys will likely involve third parties and interactions
you don’t own. Let’s say you’re a utilities provider
and your customer purchases a Nest thermostat from
Home Depot. That product will impact your custom-
er’s energy experience, but you won’t know they’ve
installed it unless they tell you, right? You want to
learn what products they own so you can continue to
build their profile and support their journey, but first
you have to show them how providing that informa-
tion can improve their experience.
We helped a utilities client in this situation by im-
plementing feature we call “Milestones.” With
Milestones, a customer can add information to their
account profile (e.g. “On this day, I installed my new
Nest thermostat”) and then track the impact that
product had on their energy usage and monthly
bills. So even though the company was not directly
involved in the purchase of the thermostat, they are
able to create an improved experience by connecting
to it. Showing your customer that you can make their
lives easier and help them achieve their goals will earn
lasting loyalty and encourage them to engage with
you even more.
Develop a Content Strategy that Keeps Up
Many organizations struggle with content strategy, but
it’s crucial to making personalization work effectively.
Where there used to be one version of content for
everybody, there now may be five or six content
versions based on different audiences that need
to be managed and expanded as personalization
efforts grow.
AI can help carry the load by determining the right
content for an individual and then automating deliv-
ery from the pool of content you’ve created. It can
even gain insights from factors like customer behavior
and use those to further personalize without requiring
new written content. For example, Uber can say to
Above: Perficient Digital’s Personalization Spectrum

a user, “Hey, you took 40 trips this year, traveled 350
miles, and met 25 different drivers.” Nobody had to
generate that content. Uber would just need to define
rules and train the AI to pull the data and plug it into
the customer-facing story.
Know Your Systems and Capabilities, and
Grow Them
Personalization isn’t possible without the right tech-
nology - and knowing how to use it. We see a lot of
clients that have great tools in place, but don’t really
know how to use them to drive personalization. It’s
like owning a Ferrari, but only using to go to the gro-
cery store.
So how do you go from the grocery store to the
Autobahn? From crawling down side streets to flying
down the highway? Well, you have to start small and
then build a foundation for propelling more advanced
experiences. Perficient Digital has a model that we use
to illustrate the different personalization types, rang-
ing from simple to complex, and the progression from
rules-based personalization to cognitive. Over time,
your solution should evolve from simple rules-based
targeting against broad segments to cognitive solutions
that understand and respond to individual customers’
intent.
The more effectively you can use strategy and tech-
nology to understand customers’ intent and personal-
ize experiences to meet their needs, the more they will
trust and rely upon you to make their lives easier. •
As a digital experience strategist, Brian is responsible for driving
digital strategy for enterprise clients and oversight in delivering best
practices. In this role, Brian keeps Perficient Digital and its clients on
the cutting edge of new design strategies for next-generation technolo-
gies to consistently exceed client and peer expectations.
27

It’s been nearly two decades since mo-
bile phones began making imprints in
our pockets and on our lifestyles, be-
coming household items while shifting
the paradigm of communication.
But within the last ten years, easy access to broadband
connectivity, evolution of camera technology and the
social media takeover have given rise to the equally
transformative ‘Instagrammable’ era—one that is
continually redefining how we live, design, and experi-
ence everything from food to brands.
The impact on experience and the growing experi-
ence design industry has been especially powerful.
The spaces of art and commerce were always shifting,
but the specific consequence of social media’s rise
is that physical experiences are no longer intrinsically
valuable. Rather, their value is now intimately relat-
ed to the social media imagery that’s produced and
shared with the masses. It’s not so much about the
experience itself, but the validation that an experience
actually happened, and furthermore, happened to me.
Essentially, it didn’t happen if no one took a photo of
it. And that may pose a real problem, to experience
designers, brands and to the audiences they engage.
Beware the Rectangle
Brands go where their audiences are—and their
audiences are, of course, now on Instagram and
other social photo platforms, which allow them to
document their own experiences. Shareability has
become central to the success of every brand experi-
ence. But what are the consequences of brands’ re-
action to this sharing culture, its new digital tools and
how those tools affect the way people interact with the
world?
Brands want audiences to share and so, unconsciously
or not, they maximize visual impact by deftly “help-
ing” the pic-snapping public control their points of
view, directing where to point their cameras, what to
crop out and where to stand. In this way, they con-
trol the narrative and the audience’s story becomes
the brand’s story as well. But there are diminishing
returns.
Ironically, in an age where we can point and shoot
at anything, capture the world in full resolution, in
slow-motion, in time-lapse, in any shape of rectan-
gle, and even in full 360 panorama, the results of our
collective photographic social memories are reduced
to the same handful of rectangles the world over.
From the Sephora x Coachella – Makeup Stationsto
Refinery29’s 29 Roomsto Kusama’s Infinity Mirror
space, the visual narrative becomes startlingly similar:
a grid of identical photos with similarly structured
backdrops - the only difference being the people in
them. It’s a result that is at odds with the usually
personal and spontaneous natures of art, design, and
experience—which can work together to create lasting
memories and a genuine emotional brand connection.
By reducing the audience’s frame and ability to
capture a unique experience, brands are making an
how the digital era has redefined
Brand Experience
written by David Schwarz
28

exponential impact with these visual messages by
forcing us to be very specific and repetitive in how we
share experiences. While it’s a marketer’s dream, we
as agencies need to question how complicit we are in
the potential devaluing of the experiences we create,
and instead push for deeper, more engaging solutions.
Maintaining Integrity in Experience
At a time where short attention span theater reigns
and “shareability” is often mistaken for a core princi-
ple of user engagement, it’s important for brands and
their partners to protect theirauthenticity of mission
and vision to propel experiences towards success.
While it might be tempting to follow the lead of social
media culture, the experience design industry needs to
realize that brands can’t build real relationships with
their consumers if they aren’t maintaining the integrity
of the real-life experience. This means creating ex-
periences where the core value isthe experience itself,
not just the social photographic recordof it.
Social media is a truly powerful tool and I understand
why its promise of data analytics and curation are
very attractive. More importantly, social media is a
large part of people’s lives, and integral to how they
experience the world. But, we have to remember that
the real goal is to design unique experiences from
an authentic, ownable point of view. This can be
achieved by using aspects of the company, its people,
products, services—or even data—that simply cannot
be replicated by another institution. Instagram is not
the only consideration.
As the industry focuses more and more on the impor-
tance of experience, brands can inspire and motivate
their audiences by prioritizing a captivating experi-
ence over the allure of grid-riddled, social immediacy.
Now picture that. •
David Schwarz is an award-winning Co-Founder of HUSH, an
experience design firm. He has spent over a decade working with
brands to design compelling experiences utilizing content, interactivity,
architecture and technology.
“While it might be tempting to follow the lead of social media
culture, the experience design industry needs to realize that
brands can’t build real relationships with their consumers if
they aren’t maintaining the integrityof the real-life experience.”
29

los angeles 6/27/19
SoDA session

brooklyn 10/15/19
SoDA session

Such changes can be disorienting and
challenging for some. So how can brands
initiate and accelerate these changes for the
digital future?
Transformation is not easy. Brands—big
and small face difficulties with their digital
transformation endeavors. Initiatives to
transform the organization and deep-dive
into new digital technologies are often
marred with endless roadblocks
and lackluster returns. Peering
into transformation attempts, one
of the main problems becomes
obvious. Brands who feel that
they are transforming are often
only engaged in optimization
of their current status quo. This
limits the scale and impact of
their change as well as their
quest to be more competitive
in the market.
There is quite a gap between
optimization and transformation.
Many brands are just supple-
menting existing processes with new digital
tools to heighten efficiency. And transfor-
mation is definitely more than just offering
faster processes or real-time responses.
Transforming entails shaping and enabling
new experiences that delivers new value.
There is a difference between enhancing
operational functionsand implementing
a holistic change to heighten efficiency.
And transformation is definitely more than
just offering faster processes or real-time
responses. Transforming entails shaping
and enabling new experiences that delivers
new value. There is a difference between
enhancing operational functionsand
implementing a holistic change to serve
customers better. The latter is the one that
can pivot brands into greater success and a
long-term future.
To get transformation on the right track, it
has to start with the right vision.
by Pim van Helten
New digital tools, platforms and systems are being intro-
duced almost every single day, bringing with them infinite
possibilities. With that, customers’ expectations of digital
experiences are also growing.
Brands have to be prepared to challenge their status quo and
transform themselves to leverage these new technologies and
offer up-to-date experiences. Only then can they continue to
appeal to the growing appetites of their customers and stay
on top of the game.
32

Find the Customer Experience (CX)
sweet-spot
Brands will first have to shift their gaze towards the
customers and away from the mentality of matching
new technology to optimize current product vision.
A unique customer experience beats product, price, and
place advantages and has quickly become the way to
truly differentiate from competitors. The attention
should be on interaction channels, brand identity and
content vision as they form the basis of CX. Mapping
these three components can therefore be the first step
towards crafting the new CX and hence a valuable
transformation pathway.
Interaction Channels. Go beyond thinking solely
about the customer interaction with their product.
Instead, reimagine a customer’s total experience
before, during and after the interaction. Away with
single touchpoint thinking! Start developing a thor-
ough, multi-channels perspective that connects all
the dots. Such a holistic consideration of customers’
touchpoints will help to point towards opportunities
for extended engagement through new technologies.
Brand Identity. A unique brand identity that is
tailored for the dynamic and diverse digital platforms
needs to be crafted. It should embody bold promises
of a refreshed experience and be adapted across the
different channels. Most importantly, it should reso-
nate with customer expectation of a brand deeply in-
grained with the digital space and its unique offerings.
Content. The mediums and methods to engage and
communicate with their customers meaningfully and
immersively also need to be explored. Addressing the
multitude of new content possibilities and narratives
can draw out new ways brands can build deeper
emotional connections with customers. This creates
personable experience that bridges customers more
closely with the brands.
This nexus of the potential channels, brand iden-
tity and content forms the CX sweet-spot, which
the transformation should gravitate towards to give
brands an edge.
Develop and Organize for Change
Transforming an organization to be new every day
asks a lot of changes that cuts across regular bound-
aries and processes. Since such a change is a high
risk and high reward business, brands should focus
on insight management and invest in data strategy to
measure, track and justify the transformation efforts.
Constant review will safeguard the process and mini-
mize the risk elements.
That is especially so in the next step. The implemen-
tation of a new CX as well as the creation of a unique
and consistent brand message are challenging activ-
ities. They require many different levels of expertise
and coordination across the organization to craft and
execute plans across multiple touchpoints.
Brands should therefore analyze valuable data that
can be extracted from its early transformation steps
to validate or pivot its transformation planning. They
can connect customer insights to business objectives.
They can connect results of attempted changes to
service objectives. This will allow for timely interven-
tion or further development in the course of transfor-
mation.
Evidently, a transformation plan is never finalized and
will need to be revisited iteratively as brands continue
to collect and measure new data, technologies and
interactions. •
Pim van Helten is CEO and co-founder of digital agency DPDK.
With offices in the U.S. and Europe, his agency is focused on demon-
strating a constant high level of quality and keeping modern brands on
the offense.
33

TRENDS SHAPING TOMORROWby Tom Beck, Executive Director of SoDA

T
he Global Digital Outlook Study is an annual
collaboration between SoDA and Forrester Re-
search. Our study assesses global digital spending
trends, adoption of emerging technology and shifting
views on the digital landscape. It’s also one of the few
studies to gather, analyze and compare this particular
outlook data from the perspectives of both client-side
marketing, technology and product design leaders as
well as agency leaders at digital agencies, integrated
agencies, consultancies, product design studios, pro-
duction companies and every niche in between.
This year’s study had 401 executives from across the
globe – 166 responses from client-side marketing,
technology and product design leaders and 238
responses from agency leaders.
A BIGGER PIE... AND MORE HUNGRY
MOUTHS AT THE TABLE
The 2019 Digital Outlook finds a majority of agen-
cy leaders optimistic about the future even as they
remain clear-eyed about the challenges facing their
businesses. Despite all the doom and gloom regarding
broken agency models (vivid images of fire, brimstone
and post-apocalyptic demogorgans come to mind),
agency leaders are reporting healthy performance in
2018 and a solid outlook for 2019. More than half of
agency leaders reported growth in revenue and total
profit in 2018 (56% and 55% respectively) and 79%
say they are confident that the next 12 months will be
even stronger in terms of profitable growth.
Confidence levels are bolstered (and, perhaps, jus-
tified) by a strong spending outlook from client-side
marketing leaders: 54% plan to increase their digital
spend in 2019 and 36% plan to increase overall mar-
keting spend. More importantly, 43% plan to increase
their spending with external agency partners making
this one of the strongest spending outlooks we’ve seen
since we began tracking in 2013.
But if the outlook is strong, agency leaders readily
admit that competition, pricing pressure and esca-
lating costs for talent are growing concerns for their
business. In 2018, only 39% of agency leaders said
they were able to increase their billable rates and 57%
agree that pricing pressure is becoming an even
bigger factor in winning new assignments. Further-
more, 66% saw competition for their services intensify
and 64% said that the rising cost of talent was having
a direct impact on their bottom line. Stiff competition
and continued pressure on operating costs will un-
doubtedly winnow out more and more agencies with
indistinguishable capabilities and inefficient operating
model.
BATTLE ROYALE OR TOKYO DRIFT TO
THE MIDDLE?
The marketing world has been obsessed with the
incursion of management and IT consultancies into
the sacred creative territory of agencies. Too much of
the industry commentary, however, adopts a binary
view on the matter suggesting that only one model
will prevail in this battle royale between consultancies
and holding companies. This is a simplistic assessment
for a complicated and interconnected ecosystem of
digital providers of all shapes, sizes and flavors. While
our data this year uncovered a 24-point decline in
marketers’ openness to using consultancies for digital
agency assignments (53% said they were “Very Open”
or “Open” this year vs. 77% last year), we continue
to see an array of partner types tackling digital initia-
tives. In fact, there has been little change, year-over-
year, in the number of partners marketers’ tap for
digital assignments. Nearly one-third of marketers use
3 or more agencies/partners. Furthermore, there is no
dominant partner type for digital projects and usage
of integrated agencies, full-service digital agencies,
consultancies and specialized digital agencies is evenly
distributed. The bottom line: agency “type” is increas-
ingly irrelevant when defining the competitive land-
scape for digital services.
AGENCIES PRACTICE MIXED
MODEL ARTS
Our findings this year point to an active evolution
of the agency business model with some moving to-
wards specialization while others seek to expand
their responsibilities with new capabilities. An as-
tounding 61% of agency leaders this year said they
were actively re-evaluating their core business models.
35

Experimentation with different pricing models (26%),
going to market with 3rd party partners to round out
service offerings (25%), and deeper collaboration/
integration with their clients’ other partners (30%) are
just a few of the avenues agency leaders are explor-
ing. On the capabilities front, agency leaders point to
areas such as strategy, data, platforms and technology
as key areas for revenue growth in 2019. Interesting-
ly, these capabilities are traditional strongholds for
consultancies.
It’s clear that many native digital agencies, traditional
integrated agencies and, consultancies are racing to-
wards a melee at the center of the marketing/custom-
er experience ecosystem. It’s also clear that new areas
of specialization have emerged. For instance, more
than 30% of all agency respondents said they do not
currently offer any services related to voice-based
applications, AI-driven digital experiences or experi-
ential installations that blend the physical and digital
environments. We also see agency leaders tackling a
unique mix of capabilities across the digital market-
ing and experience value chain. S4 Capital’s planned
combination of production, content, data and media
is one such example of the mixed models beginning
to emerge.
SPEED, VALUE, AGILITY AND
TRANSPARENCY
What do client-side business leaders want? Brilliant
strategies? Mind-blowing creative? Category-busting
innovation? Technological wizardry? Lower billable
rates? The rock sensation Queen said it best.... they
want it all and they want it now! And even though
(half-jokingly), this is most certainly true, a more
pragmatic look at the market shows marketing leaders
with a growing desire for partners that can operate
collaboratively, nimbly, quickly and effectively. Several
findings for our study suggest that marketers want:
Speed. 56% of agency leaders said that speed of
delivery is becoming a bigger factor in whether or not
they win new projects and 63% of client-side market-
ing leaders said that producing and publishing person-
alized digital content, more quickly, is a major priority
for their business.
Agility. Flexibility and agility are cornerstones of
a collaborative working model. Client-side market-
ing leaders point to “more flexible/nimble working
models” as one of the top areas of improvement
they’d like to see from their agency partners. On the
other side, agency leaders say that “working directly
with clients’ other partners in a more collaborative,
integrated way” is one of the top ways in which their
typical engagement models are changing. Addition-
ally, more than 60% of all respondents agree that
the in-sourcing of digital capabilities is having major
impact on the way clients and agencies now partner.
Value. Client-side marketing leaders ranked “differ-
ent pricing models” as the number two change they’d
like to see from their agency partners and pointed to
“pricing/value” as the top reason they typically termi-
nate a partner relationship. Agency leaders seem to be
begrudgingly conceding to the point ranking “pric-
ing/value” the second highest reason for why they
are typically terminated by their clients. Additionally,
a whopping 70% of client-side marketers admit that
properly quantifying and valuing the impact of cre-
ative ideas represents a major challenge for how they
compensate their agency partners.
Transparency. 66% of client-side marketing leaders
are demanding greater detail and transparency from
their agency partners in how they report on budget
spending. While not quite as high, 50% of agency
leaders agreed and said that their clients are increas-
ingly demanding greater detail and transparency in
reporting how their clients’ budgets are used.
What does this all mean? It isn’t to say that bedrock
elements of the agency business (creative and innova-
tion) aren’t top of mind for clients. They are. In fact,
“Better Design/Creative” is the number one improve-
ment they’d like to see from their agencies. But there
are many paths to success and given the growing
realities of operating in an multi-partner ecosystem
(often with in-house teams in the mix), greater scruti-
ny for CMO’s entrusted with more responsibility and
bigger budgets, and market pressure to move quickly,
we see marketing leaders placing a bigger premium
on the working models of the partners they select and
with a keen eye towards if/how/where they can be
36

a collaborative, nimble and efficient element in the
overall ecosystem.
CREATIVE LEADERS GAIN CURRENCY IN
THE C-SUITE
In business, the creative discipline has historically
been confined to the marketing function and deployed
as an adjunct to business or product strategies cooked
up elsewhere in the organization. The phrase, “make
it pretty,” best captures this ethos. But times are
changing, and design leaders increasingly find them-
selves at the helm of successful start-ups, in an advi-
sory capacity at VC firms, or in newly minted C-level
roles at traditional brands. John Maeda first reported
on this trend in his annual “Design in Tech” report
and our Global Digital Outlook Study adds further
proof. This year, 67% of client-side business leaders
agreed that creative and design leaders were having
a bigger impact on the overall strategic direction of
their business. Furthermore, they pointed to “brand
differentiation through innovation” and “adopting
emerging technology before our competitors do” as
the single most important strategic factors driving
success for their business over the next two years.
This is welcome news for creative agencies hungry for
allies in the executive suite and desirous of more cli-
ents focused on the intersection of design, technology
and innovation. But more allies in the C-suite won’t
necessarily translate into easier wins. For starters, cli-
ent-side leaders continue to elevate their expectations
for agency partners. In fact, “Better Design/Creative”
is the top attribute clients would like to see more of in
their agency partners.... even ahead of criteria such
“different pricing models,” “more flexible working
models,” “stronger data capabilities,” “stronger tech-
nology capabilities” and more. Translation: No free
rides on the creative front. Even more troubling, 70%
of client-side leaders said that quantifying and valuing
the business impact of creative/design ideas presents
an increasing challenge for how they compensate
their agency partners. The bottom line: creative and
design leaders are on the rise in corporate structures
and there’s no doubt that this can help bolster the
influence of creative agencies in the board room. But
increased visibility leads to increased scrutiny... for the
caliber of the creative work product and, more im-
portantly, the direct business value it creates. Agency
leaders have their work cut out for them.
DIGITAL PRODUCT STUDIOS POISED
FOR GROWTH
Of all the data we track relative to spending, perspec-
tives on the digital landscape, talent, operating models
and emerging technology, one trend that continues
to stick out is the growing focus – for both client-side
marketers AND agency leaders – on the creation of
new digital products and services distinctive from tra-
ditional creative work on marketing-related content,
campaigns and experiences.
In our study this year, 45% of agency leaders project-
ed that revenue related to helping their clients create,
launch and improve digital products and services
would increase in 2019. This was the top-ranked
category for agency revenue growth (tied with Cus-
tomer Insights & Analytics) even though just 9% of
agency respondents overall identified themselves as
“Digital Product Design Studios.” 42% of agency
leaders also pointed to “more consulting with clients
on new product and service offerings” as the one of
the major ways in which their engagement models
have been changing. Again, the top-ranked attribute
in this category. In fact, the digital product and service
trend is most striking among “Digital Agencies.” 65%
of Digital Agencies anticipate increased revenue for
digital product work in 2019 and 60% report that this
is one of the major ways in which their engagement
models are changing.
Digital Products & Services are also highly sought
after among client-side marketers. 37% of market-
ers are planning for increased spending for digital
products and services in 2019. In fact, more market-
ers plan to increase budgets for digital products and
services than for marketing-domain stalwarts such as
stand-alone content creation, campaign development
and media planning/buying.
As agency models continue to shift and marketers are
tasked with broader agenda for growth and custom-
er experience, it’s clear that a mature capability and
37

competency in digital product/service design is one
area of specialization poised for growth.
EMERGING TECHNOLOGY IS, WELL,
STILL EMERGING
New technologies come to market at a rapid pace
and each one of them challenges business leaders
and agencies with the choice of where to experi-
ment, where to invest and where to wait and see. AI
technology and initiatives related to AI-driven digital
experiences where top of mind for both marketers
and agencies this year. Collectively, 56% of business
leaders and agency leaders agreed that “AI technol-
ogy will significantly impact the way we plan for and
design customer interactions.” More importantly,
36% of client-side marketing leaders plan to increase
spending for “AI-Driven Digital Experiences” in 2019
and 36% describe their investment levels in this area
as “significant.” That said, it’s still early days for AI.
Just 16% of respondents said they are actively work-
ing on AI-related projects and 27% have no plans to
tackle AI in the next 12 months. The remaining 57%
are just beginning to explore the technology or plan-
ning to begin their first initiatives in 2019.
Outside of AI, we saw steady adoption for technol-
ogies related to AR/VR/Mixed Reality, voice-based
experiences and even blockchain technology. More
than one-third of marketers said they were planning
for significant investments in these areas in 2019.
Practically speaking, the broader topic of “Marketing
Automation” topped the list of emerging technologies
in terms of anticipated spending and impact. Market-
ing leaders and agency leaders identified Marketing
Automation as the top area for investment (46% of
client-side marketers plan to make “significant invest-
ments” in 2019), and potential impact (37% of agen-
cy leaders anticipate that marketing automation will
have a “significant impact” on their client’s marketing
approaches in the next 12 months). While Market-
ing Automation, as a category, encompasses other
emerging technologies (particularly AI), it’s clear that
marketing leaders are prioritizing investments into
solutions to alleviate key pressure points such as speed,
scale, efficiency and effectiveness. •
Tom Beck is the Executive Director of SoDA. Tom works closely
with the Board of Directors, operations team, membership and
partners to ensure the health and success of SoDA as an indispens-
able community for digital business leaders, creative visionaries and
technology disruptors.
38

O
n October 8th, the world’s leading climate scien-
tists (IPCC) published an important report. It con-
cluded that we have 12 years to prevent a climate
crisis. 12 years!
While SoDA and fellow industry peers may not be
able to save the world, we have influential “arms”
that reach far into the machinery of thousands of
the biggest and most innovative organizations in
the world. What they do and say affects hundreds of
millions of people around the world. This means that
we have a unique chance to leave our mark on this
world for the better.
At Hello Monday, we built our own agency around
specific F-values: Fun, Fortune, Fame, Forward. In
retrospect, those were self-centered values, and the
truth is that we felt a deeper sense of purpose when
we added the last F: Footprint.
An important lesson we learned is that Fortune and
Footprint are co-existing values. You don’t have to
be a non-profit to do good. Bill and Melinda Gates
are good examples of this. On the contrary, the more
successful you are as an agency, the more you’re
able to help. An additional benefit is that it’s a mean-
ingful business driver.
Sometimes it’s the lawyer who can have a bigger
impact than the activist literally chained to a tree, so
long as he or she uses their skills for good. Likewise,
fellow agencies have unique, creative and powerful
skills, primed to make a huge impact.
When big companies ask for ideas and concepts, let’s
make sure these ideas can make a positive change
for as many people as possible.
When we are profitable, let’s reinvest some of it into
projects that need but cannot afford our help.
When a client’s strategy has a negative impact in the
world, let’s try to lead them back on a positive track.
When we look at our own portfolios, let’s do it
through the lens of the UN Global Goals and see if
our work is contributing to at least 1 of the 17 goals.
When sustainable clients approach us now, let’s
remember that they will be “normal” clients—and
therefore our bread and butter—in the future.
When we know that our employees are not excited
about a potential project, let’s consider if it’s still
worth taking on because it can finance a do-good
project.
When we undertake creative experiments, let’s em-
bark on some that make sense for the world too.
And then, when our kids ask us what we’re doing,
we can say that we’re working towards making the
world a better place.
Maybe it’s time to create a manifest for the digital
industry? •
Andreas is one of the partners at Hello Monday. He’s inter-
ested in the impact of creativity and its ability to create a
better world. He was born in small-town Denmark, went to
a hippie school, and learned to dance the alphabet.
39

As agencies, we think of design systems as something
our clients should have. That the benefits of them – con-
sistency and efficiency across products, sites, and teams
– can transform their organizations. But what if we ap-
plied that thinking to our own work? What if we created
our own design systems to leverage these same benefits
for ourselves, and ultimately our clients?
This is a particularly challenging proposition for agencies. Prod-
uct companies (ex. Shopify) can be very specific in their approach,
while platform companies (ex. Google) can be extremely broad.
For us, we need to find the sweet spot in between; something
opinionated and specific enough that we gain consistency and
efficiency, but not so specific that we limit our ability to apply
the system across a variety of clients and projects.
Here’s an approach for developing a design system from an
agency perspective:
1. Getting started. If you haven’t already, choose an existing
design system and get your team using it consistently. For us,
that’s been Material Design over the past few years, but there
are plenty of other options to consider. We don’t use Material
on every project, but it’s been a great fit for many of our applica-
tion design projects; particularly mobile ones. Because we’ve used
this system consistently across multiple projects and teams, we can
share a common language and general design perspective on new
projects.
2. Leveling Up. After using a system for a while, you’ll notice
that some of your results are better than others. Figure out what’s
working for you and what isn’t. Modify the system to fit you bet-
ter. Lean into what’s working. Change the underlying system
if there are things you don’t like. For example, Material Design
has very specific measurements for their grid. We found these
measurements didn’t work for some of our designs. We created
alternate gutter/margin measurements and documented it so
other designer and developers don’t have to repeat the same
discovery process.
3. The End Game. Eventually, you’ll reach a point where
you’re no longer just generating work that feels derivative of
someone else’s system. You’ve created something that’s flexible
for all your client work but has a core design philosophy that feels
unique to your agency. At this point, working within the system
feels more natural and expressive than working outside of it.
A CASE
D
E
S
I
G
N
A
G
E
C
Y
N
by Kevin Vigneault
40

FOR
S
Y
S
T
E
M
S
Too often, agencies push pixels and invent components, only
to put their efforts in deep storage, never to be used again. We
convince ourselves that each client must have a completely new
system, unique solely to them. How often is it the case though,
that a client needs a completely new design? This perpetuates
inefficiency and slowly makes the company less competitive. In
a market where we compete with businesses like Squarespace,
creating an agency design system allows us to hone in on our
competitive advantage.
The goal of having an organization design system is to focus on
what our clients hire us for—creativity, innovation, and efficiency
in the most impactful way. Having a design system to start from
would free us up to do just that.
However, this would require an investment from leadership—
This isn’t just a parts kit, strung together over time. It’s an in-
tentional, deliberate design system that can shrink and expand
depending on your client. As such, it has to be maintained outside
of client work.
But the benefits of this effort would be rewarded. Too often
agencies work on projects that feel similar to previous work. By
creating an organizational design system, the repeat energy is no
longer wasted. Instead, designers and developers are free to invest
in the most impactful part of our work like research, design, and
brand messaging. •
Kevin Vigneault has more than ten years’ experience working with custom websites
and mobile applications and brings a well-rounded background to his position as
Product Design Director. He believes in making websites and products that are simple
in their structure, yet unique and compelling in their details.
41

Building the Best Personalized
Experience for Your Consumers
written by Matt Griffin

T
here’s no denying the rise in demand for per-
sonalized experiences. However, along with this
increased demand come many challenges facing
marketers in their efforts to keep up with ever-evolv-
ing trends and remain truly impactful.
Through a combination of the use of innovative
AI-driven technologies and a continued focus on de-
veloping and implementing exceptional CX strategies,
marketers can successfully pave the path to building
the perfectly personalized consumer experience.
There are numerous exciting developments at the
forefront of personalization. Technologies incorporat-
ing dynamic optimization make the process of iden-
tifying winning variations far more efficient. We’re
seeing personalization engines that are able to compile
vast sets of data to deliver highly tailored experienc-
es to website visitors, providing us with unparalleled
possibilities for engagement and conversions.
The continued trend focusing on mobile users pres-
ents us with opportunities to leverage location-based
services on a wider scale to pinpoint consumers and
their various stages in the process in a more pre-
cise and effective manner. Delivering multi-channel
personalized experiences in real time is becoming
increasingly essential to our success.
However, there are still several challenges agencies are
facing today when it comes to building an outstanding
consumer experience. For one, many of the underly-
ing technologies being developed to further propel ad-
vancements in personalization are still in their infancy.
Many of us also still find ourselves struggling to
deliver real-time personalization at scale. We have
more access to data now than ever before; however,
being able to effectively organize and extrapolate this
information into actionable insights, especially when
multiple devices come into play, remains a challenge
for most.
Furthermore, the industry faces several challenges
posed by data harvesting for the purposes of provid-
ing personalized experiences and ensuring adequate
security measures are taken to protect an individual’s
valuable information.
But enough about technology. While advancements
in fields such as AI serve to provide us with a world of
opportunity in the arena of personalization, the im-
plementation of this technology alone in the absence
of the right CX strategy is insufficient.
So, what exactly defines a good CX strategy, and how
can we as marketers better prepare ourselves to meet
the demands of our modern consumers?
By focusing on solid customer research using qualita-
tive methods to get to the emotive center of the prob-
lems that face us so that we can find the right solutions
to the right problems through personalization. Qual-
itative data should, of course, always be supported
with a certain level of quantitative data. However, too
much of this can muddle the process, resulting in the
loss of valuable insights.
A good CX strategy involves a company-wide com-
mitment and needs ideation through co-design work-
shops and rigorous processes around the problem to
ensure that the creative processes drive true innova-
tion.
Then and only then can we begin to focus on persona
development in order to connect with the desires of
our real customers. Segmentation that merely looks at
demographic data does not give us the level of insight
that we need to be truly impactful.
A focus on choosing the right platform technology to
solve the dilemmas we face is also crucial. Choosing
a platform for the sake of choosing a platform won’t
cut it. We need to find solutions that can streamline
operations and create seamless individualized experi-
ences across multiple channels, enabling us to radical-
ly transform how we interact with our customers and
prospects.
Embracing appropriate CMS options and identity
resolution is essential in our efforts to stay current and
effective. Effectively mapping these personas into our
platforms of choice and relentlessly optimizing and
refining our processes for maximum effectiveness over
time is also vital to success.
43

Furthermore, we need to improve our
measures for ensuring the security of
the personal data that we harvest for
personalization. Growing concerns
over the exploitation of valuable con-
sumer information have prompted the
implementation of new policies such as
the GDPR to grant individuals greater
protections. If we want to provide our
audiences with the best experiences
possible, we must start by taking steps
to ensure their well-being and reduce
the risks of data being compromised.
Conclusion
Delivering exceptional consumer expe-
riences through personalization contin-
ues to lie at the forefront of our minds.
While there are still several challenges
that face marketers in this arena, the
prospects that the rapidly evolving
technological climate presents us with
are exciting.
As developments continue to progress,
we as marketers must do our best to
focus on preparing ourselves by devel-
oping and implementing effective CX
strategies to best meet the needs of
our customers. Once we’ve done this,
we’ll be able to create positive change
by designing the perfectly personalized
consumer experience. •
With over 20 years’ experience in the design and
interactive media industries, Matt was an active
participant in the formative years of the digi-
tal communications industry, gaining valuable
experience with Deepend in London, before setting
up Deepend in Australia in 2000. Under his
management, the Group has grown to include the
brands Deepend, Nomad, History Will Be Kind
and How To Impact and Kobalt Systems.
A
dvancements in augmented reality have been
steadily turning heads over the past few years.
What started as a niche and futuristic technology
has hit the mainstream to wide appeal, and creative
approaches in deploying it have led to many magical
implementations of AR in recent times.
Now, it’s a rapidly swelling market – and while the
rate of growth in the segment is certainly notewor-
thy, what’s even more exciting is that we’re just at the
beginning of the journey. There is so much exciting
innovation on the horizon.
To appreciate how far augmented reality has come,
let’s take a look at its history. The earliest origins of
AR date back to 1862, when scientist and inven-
tor John Henry Pepper presented an awe-inspiring
illusion during a performance of Charles Dickens’
The Haunted Man. The effect, which became known
as ‘Pepper’s Ghost’, used a combination of lighting
and refraction to project an apparition on to the stage,
seemingly out of thin air. Though Pepper’s Ghost pre-
ceded digital technology by over a century, the same
basic technique is still used today for creating AR
experiences such as Tupac’s appearance at Coachella
festival in 2012.
The first example of AR as we know it today – aug-
menting a physical environment with digital objects
or overlays – appeared in 1992 when Louis B. Rosen-
berg, a researcher at the US Air Force Armstrong
the state of
Augmented
Reality
written by Peter Altamirano

Labs, built an experimental headset which provided
virtual visual assistance for a physical task. Rosen-
berg’s research proved proof of the conceptual viabil-
ity of AR technology, and acted as a predecessor to
commercial AR headsets that are on the market today,
such as the Microsoft HoloLens or the Magic Leap
One.
Headsets such as these are one of two distinct ways
that we can experience augmented reality. There are
many different headsets on the market currently, and
as usual the big players want in: Facebook has con-
firmed that they’re building AR glasses, and Apple
is also rumored to have something in the works. But
while it’s true that we’ll begin to see ever more com-
pact and ergonomic AR headsets for commercial use,
major advancements are likely still five or more years
away. On the bright side, nothing stimulates innova-
tion like a competitive market, which could lead to
incredible developments such as liquid crystal-based
AR contact lenses.
The other way that we can experience augmented
reality is through screen devices like smartphones
and tablets. This branch of AR is generally more
accessible due to the ubiquity of screen devices, and
because many people are already familiar with how it
works due to the commercial successes of things like
Pokémon Go or face filters on social media platforms.
There’s a core distinction to be made between AR as
experienced through a screen as opposed to a headset.
When using a mobile device or screen, which mediate
AR through a camera feed, their entire experience of
the intersection between digital and real-world ele-
ments occurs within the enclosed frame of the screen.
On the other hand, when wearing a headset, a user’s
field of view is unchanged from their usual POV, al-
lowing the addition of virtual content to provide a far
more immersive and authentic AR experience.
As with the output, the process of creating AR expe-
riences is also a little different between headset and
mobile. Building for headset usually means making
an app using a game engine such as Unity or Unreal
combined with a supported plugin released by manu-
facturers, or using the headsets native SDK. For mo-
bile application, both Google and Apple have released
their AR SDKs: ARCore for Android and ARKit for
iOS. Both include support for game engines and the
utility to make a fully functional AR experience, but if
desired more specialized features can be added using
Vuforia, 6D.ai or other AR cloud start-ups.
While these methods are standard for native AR –
experiences that require an app download to support
them – things aren’t quite the same for website appli-
cations. Web AR experiences are generally coded us-
ing JavaScript alongside WebXR API and AR librar-
ies such as AR.js, 8thWall TensorflowJS. The benefit
of building a website AR experience over a native one
is that it makes it more accessible to consumers by
bypassing the requirement of downloading an app to
try it. The trade-off is that browser-based AR doesn’t
offer the same level of performance nor the number
of features that can be applied to native AR.
Despite the minor drawbacks, web AR has taken
a huge leap forward in recent times, and now both
formats are viable in their specific and distinct uses.
Longer storytelling experiences such as East of the
Rockies suit native AR better because of its depth and
functionality, whereas simpler, low-poly experiences
that only require plane- or image-tracking like Portal
Hunt or this Spiderman game are perfect for web AR.
“The next few years will be
full of incredible milestones
as we witness AR redefine the
user shopping experience,
change our conceptions of en-
tertainment and transport, and
introduce ground-breaking ap-
plications to the education and
medicine sectors.”
On top of there being different ways to build and
interact with AR, there are also different types of
experience that can be created. One of these is known
as world tracking. This category uses a ‘marker’ or
logo present in 3D space to act as a kind of ground-
ing point for the experience, where digital content is
45

then placed in relation to it. While this is standard
for many AR creations, advancements technological
advancements have begun to allow for a marker-less
approach, or what is known as SLAM (Simultaneous
Localization And Mapping). A SLAM build doesn’t
require a marker since it detects nearby surfaces in
a physical environment and uses them as reference
points for the digital augmentation.
Another common format for AR experiences is hu-
man body tracking. The most widely used example
of this is face tracking because it provides remarkable
accuracy and has a huge variety of applications. Face
swapping, makeup application, and expression detec-
tion are just some of the near endless opportunities
for face tracking AR – but while face tracking is pretty
advanced, other human body parts (besides some
breakthroughs in hand tracking) remain much harder
to track.
“Some of the best creative and
technical minds on the planet
are working to bring into real-
ity experiences that past gen-
erations could never have even
dreamed of, experiences that
improve and enhance human ca-
pability down to the very way
we interact with the reality
around us.”
Even though the technology has yet to catch up with
our imaginations, there are big things in store for AR
as innovation increases at an ever-accelerating rate.
Exciting leaps forward, such as AR cloud, now stand
to radically change how we interact with AR. From
multiplayer, to perfect localization and occlusion
capabilities, AR Cloud brings us a step closer to true
mixed reality and the ability to create much more
immersive AR experiences.
No less impressive are the hardware upgrades also
in development. Oculus’ Chief Scientist, Michael
Abrash’s predictions for AR and VR are well worth
watching. Fascinating progress is also being made
using audio instead of image for AR experiences, in
particular with the latest AR audio sunglasses from
Bose. The next few years will be full of incredible
milestones as we witness AR redefine the user shop-
ping experience, change our conceptions of entertain-
ment and transport, and introduce ground-breaking
applications to the education and medicine sectors.
So, while it’s clear that AR has come a long way since
Pepper’s Ghost, the story is really only just beginning.
Some of the best creative and technical minds on the
planet are working to bring into reality experiences
that past generations could never have even dreamed
of, experiences that improve and enhance human
capability down to the very way we interact with the
reality around us. As Arthur C. Clarke once said: “any
sufficiently advanced technology is indistinguishable
from magic” – if that’s true, it looks like we’re well on
the way to becoming professional magicians. •
Peter Altamirano is Technical Director at Jam3. He guides tech proj-
ects and teams, from frontend and backend to AR and installations.
He loves exploring new technologies, bringing new ideas, prototyping,
improving production processes and development. He is a creative
technologist discovering new possibilities and making things happen.
46

It’s 2019, and despite years of people espousing the
death of the “digital agency” the industry is thriving
and confident. Amazing work continues to be pro-
duced by top digital agencies around the world, and
clients continue to hire agencies to complement their
internal teams, in particular when creative or techni-
cal innovation is required.
Our objective for this article is to distill and under-
stand the main drivers of agency profitability, and
provide tips, tactics and techniques that agency lead-
ers can put into practice in their own businesses.
To do this, we asked the leaders of ten digital agencies
from the SoDA membership for their secrets of suc-
cess in the pursuit of healthy profit margins; what has
worked for them, what hasn’t, and for any surprising
insights and ideas they can share.
The agency leaders we interviewed have run or are
still running some of the best digital agencies on the
planet. Half of those interviewed have had their digi-
tal agency be acquired, whilst the other half continue
to work in and grow as independent agencies. Some
run global agencies with offices around the world, oth-
ers are based in one location.
A common thread with the agencies we interviewed is
not just the financial discipline, but the quality of the
work - with awards including Emmy’s, Cannes Lions,
Webby Awards, One Show and pretty much anything
else you can imagine. Financial performance and
quality work are not mutually exclusive!
After we received the interview responses, we com-
pared these against the SoDA 2018 KPI Benchmark
Study, a detailed annual survey that saw 61 digital
agencies provide data against hundreds of key met-
rics. We isolated the data for global averages and
top-performers and used this to provide benchmark
figures. The global average for EBITDA performance
was around 10% while top-performers delivered mar-
gins of 20% or more.
The result of the interviews and qualitative research
are eight Key Drivers that we believe drive superior
agency profitability:
1. Nurture repeat customers
2. Reduce project cost overruns
3. Maximize billable utilization
4. Have keen financial discipline
5. Build a strong sales pipeline
6. Develop a capability for low cost delivery
7. Manage your ratio of billable vs non-billable staff
8. Value your people and culture
Let’s get started!
Nurture repeat customers
If you want to improve profitability in your agency
and have time to do only one thing, do this. Almost all
of the agencies who collaborated on this article rec-
ommend increasing the amount of repeat busi-
ness you get vs pitching for work with new clients.
Long-term client relationships result in higher profit
for the agency than individual projects, in part due
to the trust that builds with the client (allowing your
agency to charge appropriately for your services), and
also for the reduced new business costs of pitching.
Win rates when bidding for work with an existing
excerpts from the
of digital agency profitability
By Tim O’Neill

client are typically twice as high as with new potential
clients, and so the cost of pitching and losing is drastical-
ly reduced.
As Bill Fritsch, former Chairman and CEO of Digital
Kitchen says “Serious profitability comes when clients
value your work and feel valued by your team.
When they prefer working with your organization
versus other firms, clients are more willing to work in
partnership and to pay more for your service.”
A good benchmark is to have over 70% of your annu-
al revenue from existing clients (i.e. clients that were
already a client last year) and the remainder from new
clients you have won throughout the year.
Reduce project cost overruns
Reducing (or removing) cost overruns on projects is
easy to say, but hard to do. But with concerted focus
and effort you can make improvements continually
over time, and it has the potential to revolutionize
your bottom line.
Top performing digital agencies are able to keep
average cost overruns below 10%, and the best are
below 5%.
Cost-overruns on projects can be measured by the
quoted rate (the hourly rate you quoted) vs the ef-
fective/actual rate (total project revenue/total hours
spent). As Wesley (Wes) ter Haar (Co-founder and
COO of MediaMonks, merged with Sir Martin
Sorrell’s S4 Capital in 2018) puts it “The actual rate
per project/client is probably the key indication [of
agency profitability], if you’re over delivering against
paid scope or struggling with operational efficiencies,
it will show up in the actual rates you’re getting for
the work.”
Most agencies have a mix of project-based work and
client retainers. Both project work and retainers are
priced either at a Fixed Cost (with fixed scope), or on
some variation of Time and Materials (T&M), e.g.
in an agile delivery it might be Sprint-based pricing
with “fixed cost” but variable scope). The benefit of
working on a T&M basis is that your team should be
getting paid for every hour they work, the result is the
reduction or elimination of overruns.
Based on data from the 2018 SoDA KPI Benchmark
Study, digital agencies that predominantly work on a
T&M basis overrun on projects at a rate of 5% less
than agencies that work on a majority fixed-fee basis.
This alone would equate to a roughly 2% - 3% higher
EBIDTA margin!
There is discipline required for the leadership team to
track projects as they’re in the studio, Kath Black-
ham from Versa (one of Australia’s top voice and dig-
ital experience agencies) says “We report on billable
rates and write-offs on a weekly basis and interrogate
the why constantly. This allows us to address any issues
that are brewing before they become too much of a
problem to the bottom line.”
Maximize billable utilization
Unsurprisingly, one of the strongest leading indicators
for profitability is how busy your agency is, which is
most commonly measured as Billable Staff Utiliza-
tion. Assuming you have a healthy ratio of billable vs
non-billable people in your agency, a good benchmark
to provide high profitability is to have utilization over
75% and ideally higher than 80%.
Something many agencies have difficulty with is
charging for the time spent by the senior team,
and this can be a major drain on profitability. As Russ
Whitman from Globant puts it, “stop letting your se-
nior talent give their time away for free!!!” He goes on
to say, “These are arguably the most valued resources
in the agency, they know more and can move faster
than nearly everyone else - and they donate their
time.”
On a more operational level, to maximize utilization
in the studio, Enlighten would closely manage their
contractor base, so they could scale back when
needed. Both Enlighten and Red Badger said they are
very considerate when hiring staff, doing so only after
a sustained need.
A great suggestion from Tamir Scheinok at Fluid was
to price projects and reserve resources in blocks of
time that make the leftovers usable by other projects.
“For example, use defined weekly utilization levels
of 40, 20, 16, 8, 4. Do not allow 36.5 hours reserved
which is effectively 40 because no one is going to
make productive use of the 3.5 hours remaining.”

SoDA :: 2019 Year in Review

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