Welcome to the era of the smaller agency
Jim Collins’ Good to Great: Why Some Companies Make the Leap...And Others Don't jumped out at me from the home office shelf the other day. The book is a timeless master class in how to make a business better over time, a topic that I have found to be all-consuming as our young agency approaches its first anniversary later this month.
It is good to be in the right place as a young agency. My business partner Jeff Baum and I spent our most recent podcast waxing poetic about the benefits of living and working in Texas. The Lone Star State is now #1 in corporate headquarters, and if Texas were still its own a country – and many would contend that it is – only six other countries could boast of a larger economy. Yes, everything is bigger in Texas, and as long as you can survive the summers, there is simply no better place to do business.
It is not just good to have arrived at the right time as a young agency. It is great. Jeff’s and my young agency – like so many smaller agencies among us – has taken flight while benefiting from two significant tailwinds.
The first is the clear trend away from in-house agencies in favor of outsourcing. Which just makes sense. Why pay all that money for headcount (and benefits) when you can pay an agency to do the work? Not only does a company save money when doing this – it also maintains the flexibility it invariably needs when it comes time for budget cuts. Not to mention this: All due respect to in-house agency talent, but one of the many things I have learned since returning to the agency side after three decades on the client side is that the best talent tends to be on this side of the wall.
You add to that perhaps the ultimate value of an outside agency – fresh eyes – and it’s really not a fair fight. Keurig Dr. Pepper dismantled its in-house agency, Liquid Sunshine, in May, dispersing the more than 80 people doing work for 125 brands throughout the company’s portfolio into the job market. It was hardly the first. And it will not be the last.
The second is another clear trend – away from big agencies in favor of smaller ones. The big agency tumult over the past few months, ranging from the Omnicom-IPG merger to massive layoffs at Edelman and WPP’s media buying unit, has laid bare an inconvenient truth: The big agencies are no longer where it’s at.
That is true for too many large agency employees, who despite their hard work each and every day are ultimately no more than corporate pawns. That is true for too many large agency leaders, who despite working their way up to the top are now overseeing operations that no longer provide the best value to clients. And that is true for too many clients of large agencies, who were sold by said agency leaders in the pitch process, only to wonder where they went once the real work began. Real work that was and is being done by increasingly junior staffers who despite their smarts and enthusiasm simply do not have the requisite experience necessary to provide the type of counsel that their clients both deserve and need.
Smaller agencies have always been better for clients — if those agencies had enough high-level experience in charge of producing actual client work, along with an adequate bench, and if they were not tied down by a disabling cost structure. Smaller agencies like ours bring this basket of desirables to the table. The more clients that give these types of agencies a chance to show what they can do, the more additional clients will see the value of this new dynamic. And the sooner everyone involved will wonder why they held on to an outdated value set for as long as they did.
So welcome to the era of the smaller agency. One of the key challenges we all face will be to avoid the trap of being the cobbler’s children by ensuring that our messaging is strategic, unique and compelling. Doing so will help us build brand identify and differentiation in what will become an increasingly crowded space. It’s a good problem to have, but if not managed correctly, it is a problem that will remain.
NFL training camps open this month, so I suppose a football analogy is in order. We’ve been fortunate – thanks to the many who have kindly offered their time to us – to spend a good amount of time in our first year in the red zone. That said, it can be challenging to go those final few yards to get into the end zone. This doesn’t make us all that different from other start-ups, I suppose. We have had countless positive conversations with brilliant and engaging people, and at minimum we’ve learned something from each one. This has made us better – something that I have no doubt we are today as compared to a year ago.
Right place. Right time. And a constant thirst for improvement. You will soon see some changes in the way that we present our agency. We are excited about taking this next step in our journey.
We intend to make Jim Collins proud.
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