It's time agencies started building their own brands

I've always loved the story about how Anomaly won the pitch for Virgin America by promising to design its in-flight experience for a share of the profits. They imagined the future of advertising. The Holy Grail for agencies (well, for me anyway): to have a strategic hand in developing the product we advertise.

So how did we move from ad folklore to current-day reality so quickly and what implications does it have for the way we work?

Well, first, our environment has changed dramatically. Technology has democratised production, so we have more innovation and more competition in every category. Technology has democratised distribution, so even the smallest companies can compete on global terms. Technology has democratised decision-making and consumption, with mass access to feedback and reviews. And technology has also democratised communications. A tiny SME can advertise on the same platforms as a high-street brand. With social media, they don't even have to spend money on media - they just need great content that people want to share.

Second, a new generation of twentysomething agency talent has different priorities. It's not just your next-door neighbour building the next Skype - you can often find them sitting beside you in the office. People across the creative industry are creating "their own brand" products. And that's mirrored by the fact that it has become a mark of status for an agency to be pushing out its own line of products. "Are you creating your own IP?" has become a favourite question at ad conferences. So I asked on Twitter recently "why ad agencies are doing their own products". "It's just what self-promotional projects have turned into"; "More fun than making advertising"; "We need to stop our unicorns from going to work at Facebook or start-ups" were some of the responses.

Third, you don't have to look far to find the next generation of great digital product design specialists. Our next-door neighbour in the Tea Building in Shoreditch, the mobile studio USTWO, is delivering some ultra-slick user experiences for big financial services brands, and also creates hit games such as Whale Trail "for themselves". Or the social product agency Made by Many, which reinvented the news website for ITN and also created its own app, Picle - a story of Instagram-style pictures with sounds - which picked up 50,000 users in a month after launching at SXSW. Or the New York-based Breakfast, which created Precious, a bike that Tweeted while being ridden across America for the Livestrong foundation, but which is best known for in-house projects such as Instaprint, a mobile photo booth that turns Instagrams into Polaroid-like prints.

I love these studios as they have deep product design craft skills, but most choose to stay away from delivering advertising. For instance, the advertising for USTWO's Barclays Pingit app was made by Bartle Bogle Hegarty. And when the big ad companies think about product design, they too tend to set up separate silos to play in this area - BBH's Zag or TBWA's Pilot, for example.

So, fourth, let's look for signs that creative agencies can deliver both product and advertising under the same roof. R/GA built Nike's customisation tool, NIKEiD, and also won a Cannes Cyber Lion for the social currency idea of "Pay with a Tweet". AKQA has given us Fiat eco:Drive, Nike Training Club and Heineken Star Player. AKQA's Ajaz Ahmed has said: "If we in ad agencies don't have a strategy for how we can advise clients in designing outstanding products, then we will be marginalising ourselves even further from what is the most important step in brand-building."

I agree and, at Albion, this is the mantra that is driving our culture. Evidence of this in action is the recent work we've just completed for Telefonica in designing the user interface for its new communications app, TU Me, or the development of the Giffgaff product in all its guises, or the sonic identity that we created for Skype. Our aim is to create a culture and process that are equally capable of doing this product design work alongside the ability to market the new product.

How do you make this happen? The traditional process would be called "Waterfall" in the software world - requirements cascade down from department to department. It's great for scaling big traditional ad campaigns, but it's not great at designing new products. For that you need an agile process. Working in an agile way means removing the "creative department" (and its implication that the other people in the agency aren't creative). Agile is about incremental development, where solutions arise through collaboration between multi-functional teams. Those teams follow an iterative design process - at each stage developing hypotheses, building prototypes, validating with users and iterating the solution as a result.

This is the new advertising (add dramatic soundtrack) and I'm excited by the present and what it holds.

Jason Goodman is the chief executive of Albion.

This article was first published on campaignlive.co.uk