Campaign India Team
May 22, 2009

To Sir Martin, on behalf of all the independents

A recent comment from Sir Martin Sorrell would have you believe that this is the beginning of the end for the micro-networks. The WPP head has been quick to point out in recent press interviews that the ‘Goliaths’ will fare better in the downturn that the ‘Davids’.

To Sir Martin, on behalf of all the independents

A recent comment from Sir Martin Sorrell would have you believe that this is the beginning of the end for the micro-networks. The WPP head has been quick to point out in recent press interviews that the ‘Goliaths’ will fare better in the downturn that the ‘Davids’. Apparently “Goliaths are picking up share while the Davids are really under pressure, particularly as credit markets remain frozen”, so on behalf of the independent agency world whose success has been down to their innovation and ability to adapt, I’d like to offer a different perspective.

Over the last few months we’ve seen the big network agencies struggle to respond positively to the changing market conditions and the demands of their clients, so they’re re-structuring, downsizing and making people redundant which in turn will lead to a downward spiral in quality for the client. In fact Sir Martin Sorrell’s own failure to make his Enfatico agency work successfully is a stark illustration that the traditional networks are struggling to offer clients the value enhancing benefits of integration.

The important question is not whether a big or a small agency is growing faster right now, but who is best positioned for the future of the marketplace.

The assumption that the micro networks are in a weaker position is not appreciating the potential benefits of scale and independence over the traditional networks.

These two factors enable investment, ability to build depth, ability to attract talent, and an ability to win and retain good clients. Independence means you’re motivated enough to offer true ‘client centricity’ that allows a level of teaming and dynamism that cannot be replicated in traditional networks. It also fosters a culture that drives understanding and collaboration.

These are the things that form the basis of a blue print for expansion, which when added to ambition and an interest and openness to change creates client trust, which is the key driver of agency growth.

I’d argue that independents can better offer ambitious and commercially astute clients the value, quality, investment and commitment they are looking for because they are better able to offer a commercial model that is fundamentally linked to clients.

A model that is built around ‘AGILITY’ has the ability to be responsive to changing market conditions and client needs. It needs to be real-time, consumer led, collaborative and offering both multiple specialism and the ability to blend it all efficiently and effectively around a client need.

In fact while the big networks have been preoccupied fighting amongst themselves and trying to control share of client spend, a new kind of agency has emerged – one that is global, independent, integrated, media neutral and more importantly has one P&L. This is a model that can offer ambitious and commercially astute clients the value, quality, investment and commitment they deserve.

For example the surprise move by adidas to award the global advertising account for its running business to iris last year was a wake up call to the networks, which had previously not considered the micro-network a threat. Sony Ericsson and Hertz also made a similar move, naming iris its ‘Global Activation Agency’ and ‘European advertising agency’ respectively.

As clients look for better value, they will get more consolidation but agencies will need to respond through adding more value, removing unnecessary cost and process, whilst finding ways of being increasingly relevant to client partners. Integration will need to be a key part of this value exchange. The networks have so far not done the reputation of genuine integration any favours as illustrated by Enfatico, an exercise in ‘smoke and mirrors’, which is why it failed.

Long term Success will mean getting the three essential client value drivers of ‘agency agility’, ‘strong culture’ and ‘discipline alignment’ working in harmony. So as the networks (lacking in these vital ingredients) look to cope with more dynamic trading conditions, we believe there is a huge opportunity for the emergence of a new way to be a global marketing agency, as these factors tend to be prevalent in independent agencies.

Source:
Campaign India

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