Does size matter? Get your mind out of the gutter.
As one of my main roles at Twist Image, I act as the frontline (along with a great team of people) of assessing new business opportunities. While some agencies may have their opportunity filter down to a science, I’d happily contend that our process has little bit more art sprinkled into it. With that comes a reality: we have two offices, about one hundred plus people and as one of the four owners of this business, the responsibility to keep the lights on and those families fed looms large on my mind. Does this mean that we take work for the money? Yes. This is a business and a large function of it is about making money and it is (sometimes) easy to fall into the trap of doing something because the money is good, but the money is not what the work is about.
The work is about the work.
There is no major innovation here, but I believe that people who are doing the work that they were meant to do not only get paid the money that they deserve to be paid, but that the clients (or the benefactors of the work) are happy to pay these fees because they are getting value out of it. Is it a perfect world? No. There are hiccups along the way. In most cases, the reason has to do with alignment. It could alignment around values, ideas, direction and more. We’re all sentient beings and we’re looking to work with those who are – ultimately – like-minded and committed to the brand… and the best work possible.
Are you a titan?
On the flight home from the National Retail Federation‘s Big Show (where I gave a keynote address for the Shop.org First Look Track), I was watching the CNBC Titans special on Leo Burnett (if you have not had the opportunity to see this documentary on the legendary ad man, I highly recommend it). The story of Burnett’s ascent in the advertising world is one for the books. How he managed to build his empire from a small Chicago hotel suite to a multi-billion dollar global advertising engine will take your breath away. As an agency owner, I was more attracted to the moments when the agency stumbled. Was Leo Burnett better as a smaller shop, medium-sized agency or a global entity?
There are pluses and minuses.
Growth for growth’s sake is never a good thing. Sudden growth because of a major new client acquisition can be challenging to scale as well. There are countless potholes on the road to growth and a simple pebble on the side of the road can be as distracting as the transition from a residential road on to the freeway. That being said, I think it’s going to be increasingly difficult for the very small shops to grab the bigger brands (and keep them). Now, before you go jumping all over the comments and telling me that your small boutique firm works with some of the largest brands in the world, let me be clear that I am talking about full-service (or fairly close to it). I have no doubt that some of the smaller, boutique specialty shops who work in a very specific niche can do great, global work.
The size of the boat.
It’s a two way street. Brands have to know their limitations and their expectations. When a small start-up tries to engage with a middle-to-large sized agency, it probably won’t be a great fit. Box within your weight class. Find a shop that is (somewhat) similar in size that can be both nimble and rugged. Bigger brands who engage with the smaller, boutique shops usually get great results, but as the business grows and the brand requires more attention, it can be extremely challenging for the agency to keep the client happy (both in terms of work and brining on the right people quick enough).
So, what’s the lesson?
Size matters because size is a function and part of finding the right fit. Should brands take chances on the new, smaller agencies? Of course they should (and brands did that when Leo Burnett wasn’t the Leo Burnett we all know and respect), but as the world gets more complex and more fragmented (in terms of media and marketing options), we’re going to see things change. Traditional agencies are already bulking up on their digital capabilities and the digital marketing agencies that have scaled will probably be pulling some of the more traditional folks over to their side to bulk up as well. My guess is that brands are going to be looking for both creative innovation and the scale to get the work done.
What’s your guess?
Small agencies often can’t execute for big accounts.
1. There’s a manpower issue. Some jobs just require a lot of hands on deck.
2. There’s a scale management issue. Project managers who aren’t used to managing large campaigns probably won’t be as effective if they are asked to operate too far outside their comfort zones.
Having said that, small agencies can be ideal for campaigns that require unique expertise or talent. They can fill gaps for larger agencies, for instance.
Sometimes, you need a full brigade. Sometimes, you need an A-team. Sometimes, you need both. It’s good to keep your options open.
We have the Navy SEALs for a reason… right? 🙂
Size is definitely relevant for logistical reasons, but ultimately it’s the ideas and their execution that matter. The good news is that scale in business continues to collapse on a number of fronts, therefore the playing field is a lot more level for smaller players. Business in the 21st century is about speed and not necessarily scale as it was back in the industrial era. Put another way, businesses that derived their competitive advantage from scale will be vulnerable to disruption in the current environment. That said, it’s critical for a fast growing agency to maintain its sense of culture and values because that is what made it successful in the first place. That’s the paradox of success in some way – new business can be a threat to an agency unprepared for growth. On the other hand, an agency that is strategically aligned can apply growth to amplify the elements that make it great (Sid Lee is a good example).
As much as I would like the agency model to shift to a Hollywood move model, bringing together highly skilled key players for each client then disburse and reassemble in a different way for the next client, size of an agency does matter for large clients. Most large clients are just not comfortable with any company that does not look and feel like them, which is essentially “the fit”.
I think Lucas has some great points. I think the panic with some brands is “how to separate themselves” and how to “maximize digital”. It seems like this is going to push more brands towards smaller firms that can be much more agile and take bigger risks than established firms. I am also intrigued whether the smaller digital firms might then “grow up” into taking over responsibilities usually assigned to larger firms. As we see the large consulting firms even getting into marketing and advertising, I think the backlash might get worse in the favor of the smaller firms.
Great points, Lucas… you should have written this Blog post 😉
I’m a huge fan of the Sid Lee model (and JF and the guys know it)… but they’re dealing with “size matters” now in a big way. From opening their office in Texas to service the Dell account to staffing needs all over the world. My guess is that they would agree that scale is required to compete and win those big and juicy accounts.
I’m also with you on the notion that none of that matter unless you can deliver results (both the creative and the net output of it).
… and the work isn’t just a project… it’s ongoing. There is little value (in fact, it’s a huge waste) to continually have to brief in new players on the brand and what it’s trying to do. We have to remember that agencies were invented so brands wouldn’t have to have the liability of their own marketing department. The value from the bigger agencies is their tribal knowledge of the brand.
I’m banking on you being right, Rich 🙂
Size matters. I’m running my business at maximum RPMs right now. I’ve tried to bring freelancers on board but the hand-holding involved to get them off and running actually producing work is debilitating. Yeah, I’ve got great tools to manage work, schedule, create, distribute… but success/competitive edge still boils down to two things, is your team conceiving great creative AND can you actually execute/implement the proposed solutions. To do this on a… Unilever scale, you will need a team with some girth.
…and a team that learns as they go… meaning they mature with each project as they learn to work with the brand to give them what they need. Let’s not forget about that 🙂
I think almost everyone wants to be dealing with the ‘big guns’ of an industry. I guess with a large agency there is that feeling of overall comfort that your budget is going to well spent by guys who have the experience, resources and backing to get it right.
However, as digital marketing is being sought after by small, medium and large brands alike there will be some, I imagine, that will only have the funds to employ a smaller agency. And perhaps they may get more ‘bang for their buck’ as a new player in the field tries to impress and gain some word of mouth kudos.
Where I live (in South East Asia) there was an huge boost in the popularity of ’boutique hotels’ in the last few years over the established large brand name hotels.
People were looking for the personal touch they felt the large names often forgot about.
In the same way perhaps smaller agencies will see growth if they maintain their identity as a ’boutique’ agency and only go after and take on clients that fit their own profile.
It kind of reminds me of trying to get your first job…everyone wants to see 3 years of experience, but you need someone to offer you the chance to get to that 3 years.
It’s like you say, smaller agencies may be given the opportunity with a smaller or niche campaign, and all these companies can do is ACE it! Any company needs to be structured well though, so when the time for growth comes (if it ever does) then they are capable of stepping up. You often only get one shot so when it comes you need to take it.
Putting yourself in a big brands shoes you’d look at a smaller agency with doubt. They maybe innovative and great, but do they have the structure to take on a big account?
To grow though that agency probably needs the big account to get them to the next level. Sound familiar?
Matt (Turndog Millionaire)
Mitch, I would be delighted to be a guest blogger from time to time. 🙂
Get off my lawn! LOL 🙂 As you know, I don’t have guest posts… so feel free to start your own Blog 🙂
Size is critical. However the larger question is where are you operating? At the top, the strategic high ground, or deep in the tactical execution?
Used to be the agency and client CEO were partners. Tied at the hip – structures aligned – CEO’s/ad agencies communicating almost daily. Back then the ad agency was a titan in the corporate world – could create markets, brands, and shape public perception with strong marketing ideas. Of course it was much easier back then when almost everyone would tune into a show like Ed Sullivan.
What I’m trying to say is in this hyper-marketed digital world the power of any one marketing effort is severely diminished. CEO’s have recognized this and now spend more time with business strategist, management consultants and such… The board room used to be a regular meeting place for the agency, now it’s not. Marketing, and as a result agencies, have lost the high ground.
This is not to say there’s not a few powerful brands that still rely on marketing, and use it in a strategic way… only that is increasingly the exception.
The rules HAVE changed, and unless marketing firms understand the basic fundamentals of the change many will be just changing deck chairs!
Marketing is not in danger – this is a great time to be in the agency world – only the old-school methodologies are in danger. Add to this mix the increasing power of a connected world using “social media” and the rate of change will only increase.
If you’re in the business of generating ideas you should be compensated for the value of those ideas – consulting – and size doesn’t matter. If you in the business of charging for the execution of creative then size is an issue.
Sanders Consulting Group
Very accurate and re-enforces the point of this Blog: what would happen if Google needed hundreds of rooms at this boutique hotel? Could they handle it?
True, but you do need to start somewhere. There are brands and agencies being given chances on a regular occurrence…. it’s the ability to convert that energy into fuel that makes growth work.
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