Big brands are seeking out smaller sized agencies to tackle their toughest projects.
Here’s why ….
Big agencies have a history of not being able to keep top talent. Why? Smaller agencies have more interesting, hearty projects to sink their teeth into. Too many parts of the creative and media process in large shops are mundane and “cookie cutter-like”, meaning the same theories and strategies are used over and over. This is boring for highly talented employees. “Big agencies have a breadth of experience and are a great place to resource a brand’s strategic or creative needs — it’s an efficient one-stop shop,” said Lynne Bartron, VP of advertising and strategy at LifeLock. “But those same agencies often can’t go deep into a category or vertical.”
Small agencies have a level of expertise in their niche. They have honed skills at what they specialize in and can offer clients top talent with skills that zero in on a particular problem.
“Smaller agencies generate passion, thereby
“I think a lot of times when dealing with the big agencies, there are things that get in the way of just doing the best work. I think with a small agency the focus is on the work. There’s a level of passion and, at times, a level of competitiveness, especially when you’re in a situation where you’re competing against or working with large agencies that small agencies bring to the table that clients really love.”
—Ahmad Islam, CEO and managing partner, Ten35
“Smaller agencies have niche expertise”
“I think you can find agencies with an expertise that you might not, might be difficult to find at a large agency.”
—Erica Fite, co-founder and creative director, Fancy
“Big brands are getting smarter everyday about the need for a steady stream of smart, unique perspectives into thinking,” said Jim Cuene, president of GoKart Labs, a 50-person digital innovation consultancy. “Some brands hire smaller agencies just to get new thinking and new energy into the mix.”
Big agency execs keep the profits and pay employees bupkiss.
Let’s face it, college is financially burdening, and graduates need to pay off loans. The starting salary in Manhattan for an entry level advertising position is $35,000/year. Starting at such a rock bottom price tag means the climb up the ladder is too long for a fast-tracked college graduate. Other careers pay more and move you faster up the ladder.
“And money provides little incentive: Last year, the average salary for entry-level employees at agencies was about $35,500, according to the 4A’s, an industry trade group. About 25 percent of the industry makes less than $50,400 a year”.
The large holding companies are notoriously known to replace seasoned, expensive staff, usually in their 50’s, with younger, cheaper talent. It’s a lot like Hollywood, chewed up and spit out by the time you are ‘old’. But now, college graduates can’t afford to be ‘cheap’. They refuse to pay their dues further than they already have by achieving a bachelor’s or master’s degree. They no longer can afford to settle and start at the bottom as an intern. They want to get paid their worth and they are leaving Madison Avenue agencies in droves.
Where are they going? Client side. Before the holding companies took off, back in the 60’s and 70’s it was reversed, agency side work paid more than client side. The holding companies changed that by slashing profit margins and with top executives keeping the bulk of profits. The lower end employees are over-worked and under paid.
“The biggest threat — and one of the biggest things that we talk a lot about — is not only attracting but retaining young talent because there are so many more options,” said David Droga, the creative chairman and founder of the agency Droga5. “We’ve lost people to Facebook. We’ve lost people to Google; we’ve lost people to Apple.”
Small agencies are more nimble
Small agencies have less red tape and can move projects along faster, have happier employees and closer client relationships. Small shops are known to employ staff that can wear many hats, and not support the ‘silo effect’ that is present is so many large agencies. A media buyer in a small shop can walk down the hall and work on a client presentation or send out traffic. That’s not the case in big shops, your title is your only job, which again can be boring and stagnant for creative talent.
“Clients who want to move fast — and already have to deal with their own frustrating bureaucratic organizations — are looking for more nimble partners. They don’t want a partner that only doubles the amount of red tape they have to fight through on a daily basis”.
“We have worked with agencies of all sizes and what we have found is that smaller agencies tend to become part of your marketing team — they get ingrained in your company’s DNA,” said Abby Lee, VP of marketing at RE/MAX. “They are more interested in your business and helping it evolve and grow than they are interested in using it as a vessel for awards and accolades. And yet they are the ones that have created the most compelling and effective creative we have seen.”
Smaller sized agencies also invest into training young talent respectfully. Large agencies don’t typically offer structured training programs or have the time built into upper management workflow to train employees. Smaller agencies understand turnover does not yield smart overhead costs. A progressive agency will allow employees to seek out their area of interest and encourage growth in such.
Small agencies are better at keeping up on current trends and cutting-edge technology
Large shops have more people to convince. Along with the silo effect comes stagnancy. Technology and digital advancements are changing at warp speed. Keeping up with trends and aligning your agency business model with current trends is challenging, but even more so when you have 300 employees verses 30. Too add to this stress the large agencies bury staff in so much work they simply don’t have time to invest in exploring what’s new. Their capabilities become archaic and outdated.
“Smaller agencies are more likely to move at the speed of the marketplace”
“I think we really like the ability for our smaller agencies to move quickly and move at the speed of the realities of the marketplace. And we really are attracted to that because we want to move at that same speed.”
—Andrea Brimmer, chief marketing and public relations officer, Ally Financial