Where's the heat for independent agencies in 2019? A selection of The Drum Network's agency membership share their expert opinions...
Paul McGann, managing partner, Brass
Being independent creates a hunger. You can’t hang around the network agency planning table waiting for campaign scraps to fall. You’re on the hunt, all of the time - which means you’re often looking where others aren’t.
At Brass we embrace market transformation. From banking to beauty, shopping to sleeping, leisure to logistics. It feels like we’re seeing an unprecedented level of change, so set about understanding and enhancing that customer experience. Nurture challenger brands. Renovate established brands.
Be unafraid to try something new, launch a new specialist service or walk away from something that isn’t working. Put insight at your heart and search for innovative new ways of combining your skills to deliver an exciting proposition.
The majority of opportunities in 2019 will undoubtedly come from people that already know and trust your agency’s people to some degree. They know what you are capable of. Value your agility and welcome some free-range thinking. Being independent means that you’re not tied to one process, set channels of delivery or a fixed roster of partners. Brands of all sizes looking for business transformation will find that independent view attractive.
Embrace and celebrate your difference from others. Invest in building your agency profile and forging even stronger relationships. People buy people. Make sure your specialist consultants are brands in themselves. Use content marketing, networking and the power of LinkedIn.
In a fair fist fight, we win many more battles than we lose. It’s being hungry that does it.
Scott Cullather, chief executive, INVNT
While 2018 was a year of mergers and acquisitions among many of the large agency networks, independent agencies were quietly – and successfully – ticking along.
INVNT regained its independence in 2017, and 2018 was our most successful year yet. Our new office in Sydney grew to five full-time employees and the team delivered projects for clients who we now work with globally, including Xero and New Relic. We launched a SWDSH Design Studio in Stockholm, secured over 20 new clients, achieved a 70%+ client retention rating, and we’re forecasting a 29% revenue increase in 2018 vs. 2017.
The future is bright for independent agencies, because they aren’t afraid to challenge the status quo and push the creative envelope. This is vital today, as brands struggle to capture – and maintain – consumers’ attention. Independent agencies are nimble and adapt to change quickly, and rather than get lost in large agency networks, clients can expect a highly personalised level of service.
The real trick and perhaps the holy grail for independents is to create an infrastructure and service model that supports global clients and campaigns around the world, while still looking, feeling and acting like a smaller start-up. The independents that achieve this balance will excel in 2019 and beyond.
Lucy Gillions, founder, Jackanory
There’s no doubt that last year was quite tough. More agencies fighting for the same budget, clients expecting more and more for their money, pitches being held for every scrap of project work, clients and agencies taking fewer risks given the uncertainty of Brexit.
Having said all that, we’ve been lucky enough to work on some truly lovely, highly creative projects. While the bigger networks have struggled, we’ve benefitted from being more reactive, more agile, more flexible. And while the only certainty for next year is uncertainty, we’re holding the view that maybe, just maybe, this will be the year that the independents truly fly.
The demand for diversification means that specialist independent agencies are in their strongest position ever. So, despite the uncertainty ahead, we’re planning for an even bigger, brighter 2019.
Sam Garrity, chief executive, RocketMill
The continuing attention from brands around the transparency their agencies provide has afforded independents the chance to gain market share versus the networks. This will continue into 2019; however, only the larger independents are capable of capitalising, due to the issue mainly effecting larger brands.
I see the larger independent agency market shrinking in 2019. There is only half a dozen or so in full service digital today, and I think at least three will be purchased by networks – or even clients – next year. This will create opportunity for those remaining independent, due to brands often wanting an independent included on an RFP.
In terms of the potential impact of Brexit, it’s over ten years since Lehman collapsed, so we’ve had a decade of uncertainty. Board rooms are well acclimatised now. Exchange rates have certainly impacted margins for some clients, but we are not seeing mass scale protection of balance sheets like we did in 2008. One undoubted impact is that uncertainty plays into the hands of performance marketing over brand-based activity. There is a healthy debate in the industry on brand versus activation, however I still see the money heading towards attributable activation over brand.
Jonny Tooze, founder and managing director, Lab
The agency landscape has been defined by the maturing of many smaller agencies over the last five years. Many of these agencies are specialising in a service offering or sector which they have brilliantly owned, meaning it’s much harder for larger, full-service agencies to remain relevant. Further specilalisation makes a lot of sense as a strategy.
Without a doubt there’s no longer room for badly-run agencies. Leadership needs to be on point – trusting and training people to help lift the agency rather than the all too familiar ‘command and control’ approach to management.
As organisations bring more talent inhouse, co-creation and collaborative partnerships are a must. Agencies can no longer be the ‘fire and forget’ outsourced model that many brands got addicted to over the last decade.
More than ever agencies need to be able to bring their clients new skills and competitive advantage to remain relevant and see growth. That being said, it’s still staggering how many industries are operating miles out at sea and a good agency is a lifeline to their future.
My advice to agencies is to get strategic, value that advice and charge for it accordingly.
Simon Bollon, managing director, We are Boutique
In an ever more ruthless environment 2018 was no doubt tough for some but successful for others.
The increasing need for agencies to differentiate, create a niche and stand out puts ever more pressure on the leaders of indie agencies. However, with such negative commentary around the networks and the challenges the larger agencies face in shaping themselves for the modern marketeer, 2018 was overall, a success for the indies as a whole.
In our experience we’ve seen more clients want less points of contact and more cohesion between agencies. The role of the senior marketeer is more and more challenging with greater pressures on the financial returns, the need for justification of activity, more ROI and clarity on the role of data in their activity. This will lead to the ongoing focus on data, but we already knew that!
What we’ll see more of is mergers, acquisitions and the formation of partnerships either in formal working groups or collaboration. Further, clients want nimble, fast-paced and responsive agencies. This creates more growth opportunities as clients look more seriously at the difference between networks and indies. So in short, 2019 will see more agencies coming together, greater levels of collaboration and more growth opportunities that the indies might not have previously had a sniff at.
Paul Stephen, chief executive, Sagittarius
2018 was our best year to date. We have never received so many new business enquiries and so much business growth. As an agency we’ve focused on particular sectors and services and that has driven many brands to want to work with us where we are the right 'fit' for them. The biggest challenge has been recruiting talent to join our team. I think there is a growing skills gap with not enough experienced digital people to fulfil the demands of industry. While commercially that creates opportunity, I fear it is a problem that holds UK industry back as a whole.
With the growing demand for digital and marketing skills, the future is certainly bright. Agencies need to rationalise their proposition and try not to be all things to all people. There are so many new opportunities like Machine Learning/AI and Voice that could be game-changers for our industry. The agencies that evolve to reflect what brands need, both today and in the future, will reap the rewards.
Jake Dubbins, founder, Media Bounty
I see three big opportunities for indies to get it right for their clients and for themselves in 2019.
The first is ‘Radical Transparency’. Trust in the industry has been under attack in the last few years. Advertising fraud, viewability, rebates and even ads appearing next to terrorist content, hate speech or content exploiting children has all contributed to this erosion in trust. The FBI are even involved in a fraud investigation in the US.
Independent agencies can win if they are transparent about their supply chain, how they charge clients and what for and be prepared to be challenged if there is a blanket mark up or percentage commission.
The second opportunity is ‘Collaboration’. The agency world has fractured and is also oversupplied. One of the attractions of the big holding groups, other than scale, is access to a range of experts under one contract. Independent agencies can also play this game to provide genuine expertise from highly focused independent agencies to solve their client’s problems. The agencies that will win ensure there are clear roles and responsibilities as well as leadership and project management from the lead agency. This means the client does not have to manage multiple agency teams. They have enough to do!
The final thing is ‘Being Single Minded’. Independent agencies should be single minded in the clients they really do want to work with and, critically, those they do not. Too many agencies will take on any client that shows them some money. At Media Bounty, we have very much focused on working with ‘purpose driven challenger brands’, like Bodyform, method, Ecover and KIND. It also means that we turned down briefs last year from gambling companies, tobacco and weedkiller. We stand by our values and do not compromise.