ThirdRock work with creative agencies to help them thrive.
At ThirdRock we love digital agencies who epitomise the very nature of innovation. They’re always creative, ambitious and driven. What we like most about digital agencies is that they operate in a very competitive market and combine technical, creative and business skillsets. Right up our street!
Digital agencies and the need for R&D
As a digital agency you face competition from all directions:
· User experience (UX), Conversion rate optimisation (CRO), compliance and technical site improvements where competition is fierce.
· Marketing campaign solutions and strategies, facing pressure from copywriters, publishers and production companies.
· In-house talent, in roles ranging from directorial to management with budget restrictions are moving to take on more marketing strategy, campaign concepts and brand development.
· Data-handling start-ups and data capture businesses that encroach in your space.
Against this vibrant and fiercely competitive back-drop, as ambition and expectation expands, so too do the threats from competing agencies. A successful digital agency will need to invest in R&D to stay head of the game.
Tax credits and Qualifying R&D
R&D tax credits exist to reward companies that take a risk to innovate and have the power to transform an agency. Whether agencies are taking a risk to develop their own products, processes and services or finding solutions and improving existing ones you will be often foraging new ground.
For qualifying R&D it is important to distinguish between creative innovation and technical innovation. Creative thinking and innovative campaigns and activities such as digital marketing, web development/SEO do not qualify for R&D tax credits however, qualifying R&D activities will often lie in the technological innovation behind this creative innovation.
What is R&D in marketing?
· developing technology for increased personalisation in marketing
· developing audience analysis tools and reporting
Claiming R&D tax credits in website development
Many digital agencies are not claiming R&D tax credits for website development costs and could be missing out. Web development is not so much about new applications and functionality as the processes behind these features and functions. If there is technological uncertainty in what you are endeavouring to achieve then these efforts may qualify for R&D tax credits. If you are creating a method, product, process device or service or making an appreciable improvement or have duplicated something in an improved way then you maybe making an advance which qualifies. Specific qualifying R&D activities include;
· integrating disparate data systems in a new or untested way eg. integrating CRMs with other marketing software or databases
· creating custom middleware
· advancing platform functionality that isn’t readily available
· developing bespoke algorithms for data search and analysis
· developing machine learning and AI to meet clients needs
· enhancing data collection techniques associated with digital campaigns
· complex CMS integration
· designing structures and schemas within databases to deliver improvements
· creating augmented reality or virtual reality experiences
· integrating VR, AR, and AI with something else to create a new product, process or service
· developing bespoke apps for clients
· developing SEO audit tools
· developing custom internal reporting systems
· developing ways to bring data from a number of sources together
· applying business intelligence algorithms to improve functionality and reliability
There are a lot of misconceptions around eligibility for R&D tax credits for digital agencies. ThirdRock ensures that digital agencies reap maximum incentives from the tax regime designed to encourage innovation. Stay a step ahead of your rivals!