Digital transformation has created organisational challenges for many agencies — from staffing high performance teams to meeting tight deadlines and even tighter margins. Google Marketing Platform’s Kate Crowley met with Croud co-founder Luke Smith to discuss how the ‘Croudie model’ is meeting these challenges and shifting the perception of a modern agency.
Founded in 2011, Croud has grown to a team of 156 in-house employees, based across the UK, US, and Australia. These internal strategists are supported by a network of over 2,000 on-demand “Croudies” and a proprietary tech platform known as ‘Croud Control’. The Croudie network allows highly skilled professionals to work when and wherever they like, provided work is delivered on time and to the highest standard.
Croud’s impressive growth and unique model has earned the agency considerable recognition. Croud appeared in the FT 1000, the FT Future 100, The Sunday Times Lloyds SME Export Track 100 and Hiscox Tech Track 100, and picked up “Organic Team of the Year” at The Drum Search Awards.
How can the industry learn from Croud’s approach? We met with their co-founder, Luke Smith, to find out.
What is the ‘Croud model’ and what agency challenge does it solve for?
The Croud model is built around our crowd-sourced network of digital experts, known as ‘Croudies’. These digital specialists, spanning 114 markets, 77 languages, and every digital discipline, give Croud and our clients international reach far beyond what our in-house team size should allow for. It’s difficult for an agency to cover every global market whilst maintaining a high quality of service, and it’s especially difficult for an independent agency to achieve this. Add to this the fact that the amount of work from a client isn’t always consistent as their business needs can change very quickly.
The Croudie network of expert freelancers means that we can scale resource up and down as client needs require. For example, if a client wants to expand into a new market, there’s no waiting period whilst we hire in-house specialists within that market. We can instantly call upon the expertise of someone already within our Croudie network. It also means that if client work slows down, we don’t need to scramble to reassign our in-house team to other workstreams. The people that make up the Croudie network cover a huge range of skills. These can range from someone who wants to do basic PPC in their spare time to bring some extra money in, to incredibly experienced developers who work on highly complex projects. We are confident that, thanks to our network of specialists, we can cover almost any task that a client passes our way.
“The gig economy has developed a negative reputation and is usually seen as the low end of the employment market. We’re challenging that perception.”
– Luke Smith, co-founder of Croud
How do you ensure consistency of output when you’re utilising freelancers at this scale?
When you’re decentralising, one of the most important things you need to do is ensure that the work done by your network is of a consistent and high quality. We break down projects into smaller templated tasks and use our proprietary tech platform, Croud Control, to facilitate the process. The tech finds the right person, checks their availability and part quality-assures their work before a human looks at it.
We’re extremely confident that we’ve achieved a very high standard of quality control. The gig economy has developed a negative reputation and is usually seen as the low end of the employment market. We’re challenging that perception, as I explained in more detail in my article for Econsultancy. The Croudie network team seeks out specialists who name the price for their work. We want everyone in the network to benefit.
“The tech finds the right person, checks their availability and part quality-assures their work before a human looks at it.”
What inspired you to come up with the idea?
I worked very closely with agencies when I was at Google and I saw first-hand how hard it can be to make money in digital. The typical agency “race to the bottom” way of working was a big factor in this because it pushed digital into being an overhead. This model doesn’t work because digital is hugely labour-intensive due to the need for constant optimisation. The idea for the Croudie network was born out of this. Croud wasn’t the first agency to use freelancers but we formalised the gig economy system to find the right person for the right job, at the right time.
What has been your greatest success so far?
It’s getting to where we’re at today. We’ve built an agency with minimal outside funding, we’ve built our own tech, launched the Croudie network, had people believe in it and then launched in Australia and the US. We’ve succeeded in building a new business model and we’re finally seeing a clear competitive differentiation.
...and your biggest challenge?
The biggest challenge has been the perceptions of a crowd-sourced agency network. Initially we struggled to get people to believe in the concept. Anyone who has either worked in an agency or owned an agency really gets us and now we have a lot of client success stories.
Another challenge was that our tech was quite basic in the early days, making it difficult to manage the network effectively. The internal attitude was that you might as well do it yourself because everything was quite clunky. We needed the team to really buy into the crowd-sourced concept. They showed incredible patience and now that the tech and the network are operating to such a high standard, we’re all reaping the rewards.
What other challenges do agencies face at the moment?
We find agencies are so often on the back foot in their interactions with clients. There’s a constant downward pressure on fees and then they find that they can’t deliver on the outputs. It’s the same feeling as when you hand in homework that you know is bad but, hey, at least you’ve done it. This breaks down trust between agencies and clients, which is a big reason why there’s an in-housing movement.
“No one seems to be taking a step back and addressing the problems — be it talent, fees or diversification — and considering how to fix them.”
There’s also the focus on short-termism. WPP reported $2.5bn profit in 2017, but what’s not discussed is how much gets invested back into innovation and tech. The same is true of every agency group. No one seems to be taking a step back and addressing the problems — be it talent, fees or diversification — and considering how to fix them. We need to make agencies feel entrepreneurial again. Otherwise nothing can change.
“We need to make agencies feel entrepreneurial again. Otherwise nothing can change.”
Are there any behaviour changes that you’d like to see within clients’ businesses?
Clients need to feel like they can trust their agencies. The trust needs to be rebuilt and the relationship cannot be so master and servant. Both sides need to feel like they are part of the same team and pulling in the same direction.
Also, to be honest, they need to pay agencies more money. They can’t keep pushing down prices, making procurement-led decisions and then expect the same quality. We need a fairer view of pricing so that agencies are properly reimbursed for the work they do.