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Go global or stay local? Part two

Graham Medcalf talks to intrepid independent-agency owners and some globally-aligned stalwarts to interrogate the advantages and disadvantages of advertising independence.

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Does practice makes perfect?

Being part of a bigger company, provides a range of other organisational benefits such as access to practices in HR, financial governance, access to international career opportunities and the ability to grow and develop professionally in ways that may not have been available working for a locally-based agency in New Zealand.

Chemistry director Joseph Silk is wary of the sell-out though: “I’m sure anyone who has been an indie and chosen to sell to or join a network would have done so for very good reasons. That being said they will have to pay the piper and so comes the oversight and demands. At times these could actually get in the way of what made that indie an attractive purchase in the first place.”

Really smart networks look for partners to invest in, strip out back office costs to help them grow and then let them thrive.

The traffic is not one way, however. Recently, the local arm of WPP-owned Ogilvy Mather divorced its global partner to become Stanley St. While multinationals are busy building scale with the acquisition of independents, Stanley St has gone against the current.

Andrew Reinholds, head of media at Stanley St, believes the agency will now be able to compete vigorously for the best talent in the market. “By definition we will attract people looking for a more entrepreneurial and agile culture that has true diversity of services and skills at its core.”

As reported in StopPress, it’s been a year of great change for WPP’s presence in New Zealand with JWT merging with Wunderman Thompson and Y&R becoming VMLY&R after merging with VML. Now, with Stanley St breaking away, WPP has launched Ogilvy International to serve Ogilvy’s international clients.

On the media side, Group M joined WPP as the global media investment management operation, serving as the parent company to WPP media agencies including Mindshare, MediaCom, Wavemaker, and others.

Jim Gall, ceo, Clemenger Group New Zealand, concedes that owning a share of the company is a strong motivation to deliver the best outcomes, that’s why Clemenger Group is 26 percent owned by its people and 74 percent owned by BBDO.

Jim Gall

“People may think that when an independent agency joins a larger group, it will lose its founder and its cultural fabric,” says Gall. “However, it is fundamental to us that an agency retains its unique culture, that we engage with founders and see them become an important part of the Group.”

Gall is an example of that (as was Clemenger’s chief intelligence officer Chris Pescott). “Clemenger acquired my business in 2013,” says Gall. “It was made clear my entrepreneurial principles were valued, meaning I could share them throughout the network in Australia and New Zealand.”

Some of New Zealand’s most recognisable independents have been around for many years and continue to be successful in their isolation. Ant Salmon founded Big Communications 17 years ago. He and creative partner Joe Holden have, despite the agency name, chosen to be small, but admits to sometimes missing the dynamic of larger groups of people. “Running a business can be a lonely place; month-in-month-out, year-in-year-out for 17 years we’ve had to manage a profitable business in an industry where margins are being squeezed but costs are going up. There’s no regional or global P&L to hide in.”

Despite there being an inbuilt awareness and credibility that comes with a group-aligned agency the success of Big and their ability to retain clients like Vero for all of those 17 years, is based on a premise of being able to set their own course at their own pace.

Ant Salmon

“We’ve not tried to take on the world, but we have felt like we’re on top of our own world,” Salmon says. “We’ve been able to create our own culture, treat and pay our colleagues as we see fit and keep them on when times have been a little tough for the agency. We’ve been able to invest in creating long-term client relationships, which I like to think we’ve done by demonstrably acting in our clients’ interest at all times, and not being too greedy when it comes to money.”

Salmon has been able to say no to ‘opportunities’ that a global group might have insisted the agency pursue and has been able to decide who they do and, more importantly, who they don’t want to work with.

“Our account managers don’t have sales or revenue targets. I just challenge them to be thoughtful, efficient, interesting, good to deal with and committed to excellence. If we do all of those things, we’ll be OK. The minute we start to give advice based on our own revenue targets, we risk not acting in our clients’ best interests. At the end of the day clients will choose the option that suits them best.”

Seeing both sides

The Enthusiasts’ Hitchcock has worked in both global agencies and independents, including two he has started himself. His observation is that most independent agency owners have come from the global agency world. As with many with an entrepreneurial bent, Hitchcock started his own company because, “we thought we were old enough to have had a good amount of experience in running/heading global agencies but young enough to still have the energy to create our own one”.

Successful talent is often promoted in global agencies to the point where their jobs become more about managing people rather than creating the work that inspires them. So many highly-talented individuals see the light and take the best of what they’ve learned in those environments but tweak it to create their own way of doing business. This can mean dealing directly with brand owners, building the business around a better lifestyle and not being beholden to global financial reporting.

Duncan Shand, managing director of YoungShand, is one who has benefited from being an indie: “Personally I think we’ve managed to build a strong team and strong culture over time. We put people first, we’re pretty flexible considering the industry and this pays off in loyalty and the discretionary effort the team put in. In an industry that turns over people pretty quickly, we’ve got a strong stable team that enjoys being part of an agency that’s building a new way forward.”

Chemistry’s Silk concurs with this mindset, the flexibility independence brings, and the ability to determine one’s own future unimpeded by corporate structure. “The ability to decide, without interference or agenda, which pieces of business you want to chase and how much time you want to put in to the chase, which staff you want to hire.”

Silk stresses the closeness of the relationship they get with a smaller indie agency that some clients like.

“We have seen a strong aversion from clients to the layers of staff that often come with corporate agencies. Clients also like working with the senior people, something Chemistry prides itself on. Our directors and senior people are on the tools every day.”

Speed and agility are common threads amongst independents. When Chuter, who was formerly FCB Media’s managing director, joined forces with former OMD chief digital officer Kris Hadley to launch a new strategy, technology and media management agency,  Together, they developed their own tools and offerings without any global red tape or margin pressure getting in the way.

As Chuter alludes to, hunger, passion and ambition lead to success. Indies tend to care deeply, because it’s their business so ‘attention to craft’ and ‘making things great’ are the driving forces.

As previously reported in StopPress, Chuter says he identified a number of consistent themes, including the desire for a more connected thinking as marketing becomes more complex and data-driven; the evolution of how brands engage with customers through technology; the need for a convergence of legacy silos within the industry; and the data-driven marketing promise of the potential of matching message with moment. He and Hadley recognised there was an opportunity to provide the skills around the value of integration.

A matter of size

If these examples appear to favour independent agencies, let’s not forget that size does matter. Big companies often feel safer dealing with big name agencies. Globally aligned clients create more opportunities for bigger budgets, collaboration with other network partners and global briefs. The greatest upside though is in the advantages that surface in the area of client acquisition. The multinational agencies are able to mobilise an army for pitches that independents often can’t compete with.

FCB is a good example of global advantage. The local agency has access to international tools like Opportunity Mapping (identifying the optimum connection moments) and Brand Bedrock (what is your brand’s lighthouse?) which dove-tail nicely into the local agency’s own well-established tools, like The Strategic Kickstart (love these client collaboration sessions) and The Art of Persuasion (the science behind behaviour change).

Creatively, FCB’s global chief creative officer Susan Credle, has introduced a 456 Scale which gives both clients and FCB a common evaluation tool and language for assessing work. It puts more science and rigger into those ‘yeah, nah’ conversations.

Rebelo put his finger on the issues facing clients attempting to align with the best-suited agency when in an interview with AdNews he stated: “Not all creative agencies are created equal. Some are still trying to fit into this new ad-world order. Some are wrestling with the conservative appetite of the market, others are seeing that as an opportunity. Not all have the talent, the ideas and rigor to help clients take the leaps of faith needed.”

The agency landscape has changed dramatically in recent years and will continue to evolve at a pace that will outstrip many. An integrated campaign in 1995 would be TV, print and radio. In 2020 there are a multitude of channels. The way these come together is challenging and needs resource. Clients either have to select a number of independent specialists, select a network of specialist agencies or choose a full-service agency. The coordination of the multiplicity of channels and specialisations demands very competent management. This may come from the marketer or the lead agency but in any event is challenging. It is one of the reasons why there is a desire for some clients to take all or part of these activities in-house.

As Stapleton puts it: “You only alleviate that pressure through having good relationships or through having a lot of resource. In today’s world, you have to surprise and delight people in a million different places.”

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