Why should you pick a small digital agency to build your big website?

There are a few caveats about the Digital Outcomes opportunity data. One, not all projects are included in the dataset; it's only the closed projects that buyers have chosen to share, and there's no indication of how many projects have been excluded so no way of knowing how large (or representative) the sample is.

On the other hand, no matter how representative the sample, the data still shows that over the last 4 years, more than 70 contracts totalling close to £7 million went to small or "micro" organisations. (Micro organisations have fewer than 10 employees.) These contracts weren't for obscure government agencies, either, but for household names like The British Museum, Royal Botanic Gardens Kew, and the Royal Air Force. If these organisations are willing to trust their website to a small agency, surely anybody should be.

The second caveat is that there are still differences between the contracts that small organisations win and the ones that large organisations do. The average micro contract was worth about £88k, while small contracts averaged £130k and medium contracts averaged £245k. Contracts for large organisations actually averaged about £87k, the same as micros, but that says more about the number of large organisations in the dataset that actually won a website contract: three. That's only 4.5% of all tenders where at least one large organisation submitted a proposal — far lower than you might expect if you assume that large organisations are the best qualified for large jobs.

Of course, it could be that buyers who contract with large organisations don't like sharing their procurement data, and if we had access to all the data, large organisations might out-perform small ones. But that seems very unlikely.

For one thing, if you look at all tenders where large organisations competed, and compare them to the ones where large organisations didn't bother, small organisations won the same proportion regardless — about 43% of all awarded contracts. That should tell you something about the strengths of small organisations: even in the strict Digital Outcomes assessment rubric where all proposals are scored according to a passionless numerical formula, small agencies do better. In other words, once you take away the big players' name recognition and flashy marketing, what you're left with isn't objectively much better than anyone else in the business.

One final caveat is that the bands used to classify organisations are fairly arbitrary. A truly small organisation with only 10 or 11 employees (like a certain East London agency with offices in Mile End) probably has more in common with a "micro" organisation than it does with a "small" organisation with 49 employees. Likewise, a "medium" organisation could have 50 employees or it could have 200, and clearly there will be differences between the two.

When you look through the data, it's also obvious that some organisations have been misclassified: one agency is listed as a "micro" because its relatively new UK office has fewer than 10 employees, but it's actually part of a sprawling and well-established Canadian agency with employees in the hundreds and resources to match.

But even after we went through the data reclassifying companies based on the actual number of employees they report, either on their own websites or on LinkedIn, the overall trend didn't change. Small organisations performed consistently the best no matter who they were up against — and while micro organisations did worse in percentage terms, the same handful of micro organisations won the same number of contracts regardless of whether a large organisation was vying for the same work.

Our conclusion? Agencies with a lean workforce can and do offer real value, even when it comes to complex public sector contracts. But of course, we've been saying that for years.

So to answer the original question: why should you pick a small agency for your next project? We're glad you asked.

Personal touch

Large agencies often make a big song and dance about the fact that they'll give you your own, dedicated team. With small agencies you get that by default; when there are only 10 people in the office, you pretty quickly get to know everyone who answers the phone. In fact, most of the time the person who answers the phone at Ten4 can solve your problem without having to transfer you to someone else.

A large agency might argue that our team isn't technically a "dedicated" one, because everyone at a small agency has responsibility for a lot of different clients and projects. But let's be real: that's true of the “dedicated” teams at large agencies, too. They weren't just sitting around doing nothing while they waited for your project to come along. Unless you employ a fully in-house team, there will always be other projects competing with yours.

Niche specialisms

That handful of micro agencies in the Digital Outcomes dataset, the ones who win jobs again and again no matter who they're going up against? They have one thing in common: they're specialists. Whether that means they only focus on one aspect of web development, like user research, or that they focus on one specific sector, like charities, the point is that they do one thing and they do it really well.

Large agencies almost by definition can't do that, because you generally can't sustain a 300-person workforce by doing only one very specific thing. To be sure, large agencies still have specialists in lots of different things, but those specialist teams have to fight for resources with everyone else in the organisation — and if they specialise in a niche or not particularly profitable area, they probably don't win those fights very often.

So if your needs are very particular, a small agency is often your better bet. They'll know exactly what has to happen to complete your project successfully, and they'll be able to do it deftly, without battling the bureaucracy of a larger agency.

Lower costs

When you go with a large agency, you often end up paying more. Part of this is paying for their scale and reputation, but the truth is large agencies have to charge higher fees because they have bigger offices, bigger salary bills, and higher overheads in general. This can become a vicious circle, too, if big agencies try to justify their higher fees by providing fancy perks, thereby driving their overheads even higher. (An accountant I know at a big advertising agency used to see red — literally! — when you got him started on how much they spent on snacks for client meetings.)

A good example in web development are the ISO certifications that larger agencies sometimes boast. The most common is ISO 27001 (Information Security Management), which basically means an organisation has formal processes in place for thinking about data security risks, mitigating those risks, and repeating those first two steps regularly.

These are absolutely essential things to do for any organisation that works with data, but the truth is ISO certification requires a lot of time and money to get and to maintain, which can put it out of reach for small organisations even if they already do most of what the standards require. After all, the basic principles of ISO 27001 are not that different from the basic principles of GDPR, and any web agency is going to have to comply with that anyway. Having a certification is as much a sign that you can afford it as it is that you take data security seriously.

So it's worth remembering that when you engage a large agency for your project, you're not just paying for the experts who actually work on your website; you're paying for lots of things that have no direct bearing on your website at all. With the right small agency, you can get effectively identical technical expertise from your project team, without having to subsidise big overheads — though admittedly our meeting snacks might not be as good.

A more focused team

At a big agency you're ultimately going to be another line on the P&L sheet: you have to be, to satisfy the board or the shareholders. Small agencies, on the other hand, have more freedom to take on risks or passion projects, and are more likely to take on work that the whole team genuinely cares about. We've often pursued work that looks less profitable than usual — or not profitable at all — just because we believed in what the client was doing.

That translates to benefits for you, too, because when your agency really cares about your project, they work harder on it. That's not to say large agencies won't care about you or work hard; of course they will. But at a large agency, even if your entire project team of 12 is fully invested in you, there are still another 300 people in the building who might not even know who you are. That’s a qualitatively different service.

Continuity and stability — even in a crisis

One situation in which large agencies might seem appealing is during precisely the kind of times we’re living through right now. In a year like 2020, with Brexit looming and the coronavirus pandemic sending the country towards a recession, there’s a perception that a large company will be more likely to weather the storm.

But that's a false sense of security, thanks to many of the same factors mentioned above. Yes, a large company might survive, but often by shedding staff to cut those high overheads — and if your dedicated team are among the redundancies, the fact that the agency itself is still around is little comfort.

Because small agencies have smaller overheads, it’s easier for us to batten down the hatches. We’re not going to say lockdown didn’t affect us, but throughout we had enough business to cover our costs, and we didn’t have to furlough or make redundant a single member of staff. For our clients, that translates to a real sense of security that their website will be okay no matter what — especially in these times when their digital presence is more important than ever.

Maybe you're not convinced by any of this. But if you don't believe that being a small agency gives us any inherent advantage, ask yourself: why do you believe being a large one would? At the end of the day, the best agency for you is the one who can build you the best finished project for the best price, regardless of how many people they employ.

So next time you're reading proposals, ignore the size of the company and focus on their experience, their portfolio, and the specific skills that they’ll bring to your project. When it comes to your website, that’s the part that matters.