Chris Staples at Rethink wrote an interesting article last year about specialist digital shops and how, as ad agencies expand their online offerings, the specialty digital firm will find itself in trouble. There is a lot of validity to the argument as online marketing budgets are increasing and agencies more than ever are learning that they need to truly understand the Web. So what does this mean for Habanero? How do we compete? Should we be worried?

Although we've had good experiences working with a number of our client's agencies over the years, we at times feel like a lion tamer. Things may be going great with the lion and they may be playing nice, but you have to watch out — if you turn your back even for a second the lion might try to eat your lunch (or more likely, you). We have been fortunate that over the years our deep strategic insight, user experience and technical skills have allowed us to keep the lion at bay.

At first glance it would be easy to continue to dismiss the work that agencies do as fluff and argue as Adaptive Path CEO Peter Merholz did "When criticizing ad agencies, you have to begin at the core—advertising, as it is widely practiced, is an inherently unethical and, frankly, poisonous endeavor that sees people as sheep to be manipulated, that vaunts style over substance, and deems success to be winning awards."

However, I feel that this wouldn't be the soundest business decision. Chris is a smart business guy, and I wouldn't bet against him.

So what does this mean? First off, I don't believe Habanero is a specialist digital shop — we are an organization that helps people (our customers, internal employees or partners) find information, share and collaborate. The solutions we build, whether it's a collaboration platform for an organization such as The City of Calgary, a partner portal for BC Hydro, a website for Servus Credit Union or a call-centre application for Fortis BC have one thing in common — they are all about helping people get and use the information they need, be it structured or unstructured.

On the intranet and extranet side we don't see much competition from agencies, and I don't think this will change in the short term. The projects are large, the platforms such as SharePoint and SAP are challenging, the integration issues are complex, and the change management and training skills required are unique to the enterprise.

On the Web side however, I believe we are going to continue to see more and more competition with agencies. They tend to have the ear of the CMO, understand an organization's marketing strategy in much more depth than us, and are getting better at creating websites. So how do we compete? Do we still want to be designing and building websites?

I believe we do, but we want to build smarter and smarter sites. Let me give you an example.

I've got Telus Optik TV. The service is awesome — love it! The website on the other hand isn't. If you are a new customer the website is fine — they have the marketing elements down, the fun pictures of the animals are there, and I can sign up for service. Once however, you become a customer, the site seems a lot less useful.

As a customer you can view your bill, but that is pretty much it. If you want to do anything to your account you have to wait on the phone for an hour. It makes you wonder: Why can't I customize my channel line up? Why doesn't the site recognize what channels I watch and suggest additional channels I would like based on my viewing habits? Why doesn't the site let me know that there are channels I never view that I could remove? Why do I have to call to do anything useful?

I believe it is because the Optik TV site, like so many others, was built with a marketing focus, not a customer focus. Building a site with a customer focus is hard. Creating a website that allows customers to fully interact with your business is technically complex. It requires integration, be it with your CRM, ERP or one of a gazillion other back-end systems that organizations have.

The good thing for Habanero — we have these skills. We leverage platforms and build solutions that pull data in and out of CRM and ERP systems, where the ability to really understand your customer lives. We have the tools, technology and capability to continuously build smarter and smarter websites.

My three-year goal involves not competing to build dumb websites anymore. I want us building smart websites — websites that understand and adapt to each customer or potential customer. Websites that treat each visitor as an individual and enable a true conversation with the business. If we are able to do this I think we will do just fine against our ad agency friends.

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