"The agency model stifles innovation"
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"The agency model stifles innovation"

Arun Sudhaman

David Ko led Waggener-Edstrom's Asia-Pacific operations with considerable success after selling his Hong Kong firm Shout to the US tech giant in 2005. After departing that position in late 2012, Ko has since resurfaced with a new digital marketing firm called Daylight, in partnership with former Agilent marketing director Angelo Umali. Ko is smart enough to wonder out loud whether the world really needs another digital consultancy, amid the proliferation of specialists and dedicated practices at PR, advertising and media agencies. Yet he also feels that his new company has spied a gap in the market. Specifically, Ko contends that the agency model is not set up to reward innovation. The biggest problem? Clients. "There’s many things in the client-agency model that stifle innovation," he notes. "That’s always been a frustration for me in the agency world." "Agencies work on a brief provided by a client," continues Ko. "The room for innovation and creativity is, to a certain extent, constrained by what the client thinks s/he wants. A lot of times, agencies go a certain distance towards innovating — but if you come back with something too edgy, agencies learn not to break out of the envelope too much." "All agencies claim to innovate and be creative," he adds. "I’m not doubting their ability to, but — at the end of the day — you answer to the client, its company culture, its attitude to digital, fear of bad publicity, fear of failure." The focus on topline targets and profitability, believes Ko, stops agencies from genuinely investing in innovation. With that in mind, he says, Daylight will create mobile apps (focusing specifically on travel, healthcare and lifestyle) and then look to license them to clients, post-development. "If we start small, I think we can bootstrap — we’ll get to the point where we have a good stable of products that we can bring to people." Yet Ko is presumably aware that his agency needs to make money from day one. So, in addition to the incubation unit, Daylight will also have a second stream of business, staffed by a different team, that focuses specifically on a traditional digital marketing agency model — everything from social media marketing to content creation and media relations. Will it work? If nothing else, Ko's success with Shout a decade ago indicates a strong entrepreneurial track record. He plans to have 10 people in place before six months is up and expects to expand Daylight beyond Hong Kong. "I think there is room for smaller agencies that don’t have the same kind of focus on the bottomline and the numbers," he says. "Eventually as we grow and bring on more overheads, we will have to answer to the numbers."
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