Why Big Brands Are Turning To Small Agencies
A friend since childhood (Joe Parrish) had spent much of his career working as a writer/creative at marketing agencies. Later in his life, he moved back to our hometown to help build his own creative shop. When he found out that I was leaving my last agency gig, he reached out to see if I would consider helping out his agency (The Variable). I met with his team on January 20, 2014 and, soon after, they signed an agreement to become the first agency partner for Setup.
When I founded Setup, it was based on a few key premises:
Clients who want true expertise prefer specialist (usually smaller) marketing agencies rather than general agencies.
Specialist agencies are better at producing wonderful work for clients than they are at developing business for themselves.
Joe wrote a piece for The Drum entitled: Why big brands are increasingly putting small agencies on their radar, that I found so compelling, that I want to share it in its entirety (with his permission) here:
Straight out of portfolio school, I went to a 30-person shop in Atlanta, GA and fell in love with advertising. The agency where I worked has since been sold, but at the time, it was amazing. We won tons of awards, did lots of great work and had a great time doing it. But because I was young and naive, I felt like I needed to move on. And so I did...too soon; moving all around the country to work at bigger shops on bigger brands. And I fell out of love with advertising.
Six years ago, I took a long hard look at what made me happy, and I decided that I wanted to try to re-create the experience of that first job. So my family and I moved back to our hometown and I started my own agency. I wanted to get back to making a real difference for clients. I wanted to be nimble and take chances and have fun. And while I am incredibly biased, I think we have achieved all that and more.
Small is the new big.
I think there is a global sea change in the way clients want to deal with advertisers. And I think small agencies are poised to reap the rewards. Clients are looking for real relationships with their agency partners. They want to personally know the name on the door and know that their successes are mutually aligned. Small shops are generally more motivated to see their clients succeed because they are more invested in their business (and because failure is crippling.)
Big ideas from small places.
We’ve all heard about how technology has democratized the creative process. About how one person in a bedroom can make the movie that a huge studio used to create. I think that’s all a little overblown, but the reality (that has always been true) is that brilliant ideas come from small teams. Look at your own career. I guarantee you that your best work came from fewer people, not more. Big ideas come from small teams for a few reasons. The first is that ideas are fragile. They can easily be trampled on by too many feet. Great ideas need intimacy to get off the ground, before they are strong enough to survive the potshots of the public.
The second reason is really an economic principle -- accountability. If you assign a project to everyone, no one will do it. The more people involved, the less likely anyone is to own it. To get great thinking, people need to sign their work. They need to know that they will be the ones standing up and presenting it. So they’re motivated to make it amazing.
From Droga5 to 72andSunny to Anomaly, the adscape is full of businesses that, when they were small, completely transformed our business with brilliant thinking. (note: While those particular agencies have gotten big, they still operate “small” and continue to make us all jealous.)
Spend smaller, think bigger.
We’ve all worked at places where we threw money at problems. It sometimes worked. But it often didn’t. Clients are catching on. They are looking for optimization and cost-cutting. They are demanding that we measure twice and cut once. In advertising terms, that really means that we need to get our brand house in order before we spend a dime. We need to think hard, then spend smart. Smaller agencies can undeniably do this better than larger agencies. Many times, this is simply due to the Sunk Cost Fallacy: Because large shops have invested heavily in certain disciplines, they are predisposed to want to use them. Have a huge broadcast production department? Recommend broadcast. A huge search team? Recommend SEM. You get the point.
Small agencies can generally be more execution agnostic in the beginning. Because their business models are built on coming up with the idea and the plan and partnering with best-in-class vendors for execution.
Smaller assignments, bigger ROI.
Clients are moving from AOR to ROI. That’s a reality we all must face. Projects, while damaging to larger agencies, are a boon to small agencies. There is a low barrier to entry for larger clients to try projects with smaller agencies. And generally speaking, the results are a win-win for all involved. Big clients see great ROI when they go outside of their AOR relationships to try projects with smaller shops. They get fresh, divergent thinking that institutional AOR’s would have never imagined. And the opportunity is for small agencies to grow those small test cases into larger, more meaningful engagements.
The reason is that small shops are highly motivated to take on smaller projects. And they treat them with the importance clients think they should be assigned. If a big name client gave a retail POS assignment to their large agency, it would go directly to the C-team, and be pushed out as unceremoniously as possible. If that same POS assignment went to a 10 person shop, it would be celebrated and anguished over and delivered with passion, conviction and great thinking.
Our industry is constantly changing. That is the one thing we can always know for certain. And there will likely always be room in the food chain for success at the holding company level, at the large independent level and at the small agency level. But I was recently at a gathering with a bunch of small agency owners, and realized we are a pretty like-minded bunch. So much is written about the big agencies making big noise. I just wanted to write a little bit about the role of the small agencies in the larger agency eco-system. Remember: all of those big shops started small and grew by doing great work for appreciative clients. Cheers to those agencies out there who are small in size but big in ambition.
Joe Parrish is partner and chief creative officer at The Variable. He tweets at @JoeParrish.
Thanks Joe for so eloquently writing what we have also been thinking about at Setup for years!
- Joe Koufman, Founder and CEO, Setup
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