A recent paper from design consultancy Ideo suggested that recession-fearing businesses should take inspiration from the potato. Brought to Europe in the 16th century, the versatile vegetable became a staple of our diet only when successive grain harvests failed in the 1790s. The message is that when we face economic difficulties, we find hitherto untried ways to satisfy our needs.
Design agencies are not necessarily the intended target of this bit of thinking, but they could probably take heart from it as they look ahead to the prospect of recession. Are designers guaranteed to prosper? Definitely not. Could they, like the potato, emerge as a new and versatile solution in changing market conditions? Perhaps, but there is work to be done.
Caroline Johnson, head of consulting at media-focused corporate finance specialist Results International, spells it out. 'We handle a lot of mergers and acquisitions, and from an acquisition point of view, design is not a hot sector,' she says. 'It is not a growth sector, and the worst place to be is in FMCG packaging, because there is just not enough money in it.'
This is nothing design shops have not already realised. 'If you are just delivering a channel, you are up against procurement,' says Design Bridge managing director John Morris. 'You are up against the trading mentality, and therefore your margins are being eroded.'
Design agencies may not be on many shopping lists, but that doesn't mean they have no hidden assets. With branding at the heart of marketing strategies and key strategic roles up for grabs in a proliferating media market, agencies accustomed to packaging and branding briefs can find themselves with a strong hand, provided that they play it in the right way.
The key, by common consent, lies in how smartly design agencies can switch their avowed focus from pure design to branding, with all that it entails. This is not purely a question of adapting their own branding, but also their approach.
'Pure-play design agencies continue to provide very valuable and specialist advice on different aspects of a brand's component parts,' says John Hall, managing director of brand communications agency Curious. 'But the more interesting development is in the agencies that have managed to move on from pure design into a brand design and communications space, because branding is so much more than a look and feel.'
Agencies such as Coley Porter Bell, Design Bridge, Design Union, JKR and Landor Associates have injected strategy into their offering to different degrees, while at the same time keeping design at the heart of their business.
'Some creative branding and design agencies, even quite craft-driven ones, have certainly talked themselves up the table,' says Peggy Connor, business director at agency search specialist, the AAR.
The good news for design agencies is that they often already have serious depth on their creative side, where the legacy of those logos, pack designs and identities is a deep affinity for the needs of a brand.
'We have an understanding of how the different touchpoints work,' says Morris. 'Pack design, all sorts of design, are the ultimate manifestations of the brand.'
This is a view clients can be persuaded to share. Barry Seal, UK managing director of branding and design network Anthem Worldwide, cites the ability to act as a dependable brand custodian as key to ensuring that his company is frequently enlisted to create ad campaigns for brands it has refreshed. 'Essentially, our deep understanding of the brand means we can react more quickly and cost-effectively than an ad agency, while ensuring the advertising is absolutely on-brand,' he says.
There are other qualities design and branding specialists will need as bad weather sets in, not least a broad base of sector experience and good taste in recession-proof clients.
Those who work well with other agencies have the best chance of maintaining and growing their roles. 'Clients are looking for a more consensual way of working these days, and not for a punch-up,' says Connor. 'So many marketers come to us and say, "can we have agencies that work well together?"'
In a sector that houses agencies of all sizes, some will inevitably fall by the wayside when times get tough. Seasoned observers point to medium-sized agencies that employ 20-30 staff as the most likely to suffer this fate.
The theory is that the big boys will slim down and cling hard to group clients, while the smaller outfits feel the keenest pressure to fight for their professional lives.
'The losers are the ones in the middle, with big overheads, a naive optimism, and a pride that makes them reluctant to cut when required,' says Howard Milton, chairman of design agency Smith & Milton.
The procurement process is another reason why bigger agencies, in particular, are already having an easier time of things.
'Brand owners take agencies through a stringent forensic vetting process, looking in great detail at their business figures, their structure and the services they have to offer,' says Seal. 'In my experience, larger international agencies are better set up for that process than smaller ones.'
Some of these factors agencies can control, and others they can't. However, it will be an ability to demonstrate versatility that determines whether design and branding agencies can emerge as a staple of the marketing process.
What marketers want from design agencies
- Real branding credentials
- Real design credentials
- Consistent, reliable service
- Accountability and results
- A bold, inventive approach while others are retrenching
- The ability to work well with other agencies
- Broad sector experience
- A sound business plan of their own
- Proven investment in new business strands
- The ability to adapt to fewer, but bigger, briefs in tougher times