Do you think 2013 will see confidence return to the design sector, or do you predict tough times ahead?
A new survey says design profitability is falling, despite a growing positivity in the industry. Do you think 2013 will see confidence return to the design sector, or do you predict hard times ahead?
‘There is no doubt that getting the right price for the right level of consultation will be tougher this year than ever before but designers are often their worst enemies here, offering free pitches, undercharging for their services and over-delivering. We need to get a bit tougher now, doing volume with no profit doesn’t help anyone, clients or consultants. We work globally and are finding fee negotiations vary tremendously between regions, Developed markets such as the US, UK and Europe are realistic and manageable but emerging markets like China, India and Turkey are very challenging. These markets have yet to experience the ongoing benefits of good design. We are growing in size and profitability. We remain very optimistic for the design industry in the future, it will only grow.’
David Dalziel, group creative director, Dalziel & Pow
‘The design sector has always been highly reliant on having a sense of positivity and this is currently being fuelled by our more forward-looking clients realising that standing still in a recession is not an option. This is good for the soul but positivity doesn’t pay the bills. Seeing confidence return is another thing entirely as the design industry has been severely wounded, alongside everybody else in this economic climate. My view is that we can allow ourselves to be quietly confident and any louder than a whisper would be a mistake.’
Callum Lumsden, creative director, Lumsden
‘The on-going trend of many clients wanting more for less (in less time) is something that is unlikely to disappear and inevitably affects profitability. Having said that, and despite ongoing economic uncertainty in 2013, I am confident that our sector will, at least in part, see the return of confidence and profitability. Of course, there has been a regrettable ‘commoditisation’ in many areas of design, but for others where design is ideas-led, or focused on creative solutions, effectiveness is being proven and the measurable impact on clients’ success is recognised. We have seen an increase in strategists and planners in the sector and it appears that agencies that are strategically led are likely to be most confident.’
Laura Haynes, chairman, Appetite
‘Last year saw a huge amount of exposure for design – from Olympic piles of sporting collateral to seemingly endless Jubilee limited additions; my guess is that those commissions got paid for early in 2012, so along with the regular income, this stuff likely increased the coffers. I think design is still a pretty stable business that ebbs and flows, but has never actually shrunk, not during my career at least. While there is a mood of uncertainty, clients are very much like spring flowers, they seem to appear when the weather warms, so lets hope it stops snowing soon.’
Derek Johnston, co-founder, Family & Friends
‘There is no doubt in my mind that our industry is changing and fundamentally. Traditional revenue models have been slowly changing for a decade. Ten years ago the vast majority of UK design businesses worked predominantly for UK clients. And while there will always be local/national client companies , these are fewer and smaller than they were. National brands are increasingly being merged or sold and then subsumed into global brands. It is my view therefore, that design businesses have one of three choices; shrink and become niche, grow and go global or sell out to one of the big networks. I would argue that most of the big networks have their fair share of design brands already and so the only real option is to go global solo. And herein lies the profit challenge. Opening offices comes at a cost. Which is why for most profits will be hit over the next few years as UK design businesses expand ahead of the revenue payback. So plenty of opportunity but it will come at a cost to short-term profit.’
Jonathan Sands, chairman, Elmwood
‘In our current economic climate, creativity and originality in design can help brands stand out. Yet ironically, when times are tough, many clients have the tendency to become more conservative when it comes to buying creative ideas. In 2013, the smart agencies are the ones that help instill confidence in clients by forging strong relationships with them, demonstrating a real understanding of their businesses and the challenges they face. When you achieve this position, you’ll know what ideas are relevant to a brand’s business and when to bring them forward.’
Anil Pillai, chief executive, LBi UK