A question I get asked from time to time is what’s the difference between an Agency and a Studio and is it just about the prices they charge or number of employees?
Here’s my explanation, and I will add Freelancers to this question too.
There clearly are some blurred lines between a freelancer and a studio and then a studio and an agency, but the separation is not based on prices charged or people.
Some of the top freelancers in the world could charge hundreds of thousands for a logo design, if they’re well known and highly sought after.
In addition, the distinction cannot be on number of employees either; although obviously a limited company employing one hundred staff couldn’t be considered a freelancer!
The difference is generally based on the number of services offered and a business’ ability to service each element of a project in-house or not.
Let’s start with Freelancers, because they’re the easy ones.
Freelancers
This is your quintessential one-man-band, but in contrast to a one-man-band, a freelancer is unlikely to be good at everything; and possibly have a lot less time on their hands too.
A freelancer’s target customer is likely to be smaller businesses, startups, or sole traders in other industries requiring one-off projects.
Many freelancers also flitter between studios and agencies as short-term ‘employee plugs’ in order to complete sections of a project when capacity is maxed out but the agency / studio does not want to commit to a full-time employee just yet.
Unless you are well established, you will likely charge below the market rate for your work; but then you’ll have far fewer overheads anyway. Essentially, you will be charging for your time and all income will be considered as salary.
The obvious positive to working with a freelancer is that you have direct access to the project manager and designer. The brief is communicated to one person bypassing confusion on deliverables, time frames or expectations.
There are two obvious problems with commissioning a lone freelancer to carry out your work though. First is their availability. They may be busy on other projects, have another job, or have holiday planned.
The second understandable issue is that they do not have a team to bounce ideas off of. The resulting deliverable could be genius or … it really might miss the mark.
If you do want to start up as a freelancer then my advice is to decide what aspect of digital or design work you are best at, and market yourself AND that niche, hard.
Good networking skills or a good network in general are essential if you want to make a real success of yourself as a freelancer.
Studios
Studios are generally classified as niche businesses. They provide one or a few elements of digital and design projects, but perhaps not the whole range.
They should however be very good at the services they do offer.
It is very common for agencies (or other studios) to sub-contract elements of a project to a studio where the studio is considered the expert. Studio employees may also undertake a consulting role for agencies.
White labelling of services is common across all industries and I believe this should be praised. Collaborating with outside experts in the area where your client requires help can only be a good thing, right?
On average, and I mean across the whole country, a studio’s average project budget will be less than that of agencies, but this is not the case for all studios.
If a studio is an expert in a generally well paid area and they are well known for their work, then that studio could be charging well in excess of what an agency is charging for their projects.
Studios will typically employ fewer people than an agency, but again, if they’re good they will grow.
Agencies
Agencies offer a complete or near complete range of digital and design services; from branding and design work and app programming, through to copywriting, video production, SEO …
Agencies are likely to employ more people simply because they offer more services. They will probably employ a number of people at different levels in each area too.
This increased capacity enables agencies to carry out the majority of projects wholly in house.
An agency’s turnover will almost certainly be made up of a decent percentage of retainer work to project work too.
The advantage of retaining an agency as your outsourced marketing department ensures your brand message and theme remain consistent throughout all channels.
Agency (owners and management) are likely to be better business people too – which is how they built such a strong foundation – and so they will likely charge more for their services …
Charge more for their service? But wait, you said they are not necessarily the expert in each field! That’s right …
So, to sum up … if communicating with just one agency and keeping your corporate identity consistent across each medium is most important to you, then an Agency is the right choice. But they’re not the cheapest or potentially the best.
If hiring the experts in each field is your priority, then you should research the best studios in each sector and commission work with them, but this of course will require an increased level of project management, marketing nous and involvement on your part.
And … if you’re seeking the completion of a quick, and potentially cheap, one-off project such as logo design or a small website then a Freelancer could be your best option. But now you’re leaving the deliverable to the creativity of one person.
Decisions, decisions.
And that, in my opinion is the difference between a freelancer a studio and an agency … in very generic terms.
