statue of liberty

The State of independence

How's the independent agency sector feeling about the potential economic turmoil ahead?

By creative salon

With finance directors - both agency and client side - squinting to discern any financial visibility for next year, contingency plans are being drawn up to account for potential rocky times ahead.

Will chancellor Kwasi Kwarteng's non-budget/special financial operation make a medium to long-term difference to growth prospects, even though the markets have been spooked in the short-term? It's still too early to say. That's why many company directors will have been reaching into their desk drawers for red pens in case they need to mitigate a change in income versus expenditure (in truth, those red pens have rarely been put down in recent years for obvious reasons).

While agencies that are part of holding companies are familiar to adapting to the necessities (and sometimes whims) of their holding company purse string holders, what of the UK's independent agency scene?

Well, the UK ad industry as we pretty much know it today was built by entrepreneurs with a proud independent spirit, rather than by imported US corporate behemoths - even if many subsequently became part of one. And there are many successful independents that continue to plough a successful and rewarding furrow, as well as new ones emerging.

So how are they feeling at the moment? Do they feel more optimistic than their networked rivals in case they need to navigate choppy waters ahead - and if so, why? We asked some of them to find out.

James Murphy, founder, New Commercial Arts

Since launching in lockdown growth has been consistent. It’s not showing signs of softening, but the important missing word might be “yet”.

It doesn’t feel like clients are clear on their 2023 priorities and budgeting yet. Probably a function of macro-economic unpredictability.

As an independent are we in a better place than holding companies…. probably not. Both models are relevant and useful to clients in different ways.

Guy Sellers, chief executive, Total Media Group

Going into a period of economic uncertainty is not a bad time to ask whether the bigger networks or the independent media agencies are better positioned to weather the storm ahead.

Regardless of share-price troubles the networks are large and relatively well funded so, ostensibly, more immune to a downturn.

Independents, on the other hand, are typically smaller and with shorter chains of command. Freed perhaps from regular stock-market reporting, strategic decisions around investment can be quickly made and applied to a changing environment.

As Ayrton Senna once said, “you cannot overtake fifteen cars in sunny weather……but you can when it’s raining”.

Along with several other independents Total Media has experienced several recessions, each of which presented opportunities to us.

So, is it scale or manoeuvrability that’s most useful in sketchy conditions? Or perhaps it’s something else?

How easily could you describe the difference between the largest five or six networks? I’ll leave that to dangle.

By contrast, the independents appear more differentiated with offers to suit particular types of clients, whether that’s by industry sector, international, domestic or, indeed, some combination of all three.

Ours is behaviourally-led planning and consulting, both in the UK and overseas.

Given the choice, I would take my chances with differentiation and agility over scale although you would expect me to say that.

Gareth Mercer, founder, Pablo

Mike Tyson once said ‘everyone has a plan until they get punched in the face’. Unpredictability and crisis are the new norm and change is the only constant. What a time to be in marketing and what an opportunity to demonstrate our value. Our operating model needs to be built to innovate ahead of the curve, finding new ways to create value for audiences when they need it most.

The scale and relatively limited layers of decision making in indies have always given us the ability to innovate and move quickly but what is more exciting about now is that we’re better equipped with a depth of talent, and more scalable client opportunities domestically and internationally Providing us with more opportunities to land ideas that make a difference. Inflation will be a challenge, as will some clients not seeing the opportunity to stand out in a quieter market next year.

But those who protect and demonstrate their value whilst being ahead of change will have the opportunity to do remarkable things.

Neil Henderson, chief executive, St Luke's

2016 was the year it all changed of course. The Brexit and Trump votes announced an era where everything went into flux. When George W Bush was asked to give his response to Trump’s inauguration speech he summed it up as: “that was some weird shit”, and in that phrase he probably summed up what’s been going on ever since.

The expression we keep coming back to at St Luke’s is VUCA. VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity and was adopted by the American Army to describe the new reality of engaging with the enemy after the cold war. It’s a great description of the worsening conditions all businesses have been facing for the last 7 or 8 years.

As an independent agency this has probably – and perhaps unexpectedly - played into our hands. Faced with deep uncertainty clients have increasingly been looking for teams who they see as real business partners.

It’s not just about the solution today, but the ability to deliver a new solution tomorrow as a team and at pace.

This was particularly noticeable at the height of the pandemic. No one could predict how consumers would behave and so the need for both rigorous strategy and agile responsiveness was everything.

This change has persisted. We have found that clients are looking for leadership who will be close to them and their business and who remain consistent. Having a low churn at management level - and indeed at every level in the company - is a real benefit compared to teams who are forever changing.

Independents are generally structured around a stable leadership group with a strong motivation to stick with the situation through thick and thin. And being independent allows for a lot more flexibility in terms of financial management, which allows those businesses to find the best way through a crisis. For example, we made no redundancies during Covid because we believed we would come out the other side needing the resource we might have lost. Consequently, we didn’t face the painful expense of getting smaller one year and bigger the next.

This also applies to the kind of ideas clients are buying. Ideas need to be built to flex to changes in the market, in budgets and in culture. This requires a kind of planning and creativity that is very alive to the reality businesses are facing.

In the face of complexity, the simplicity of an indie agency’s structure really helps clients. We are unencumbered by the kind of group structures, separate P&Ls and competing agendas that can really get in the way of delivering the clarity clients are crying out for.

We have also seen values becoming much more important. Clients are looking hard at their own values and how they live them and this focus is being equally applied to how the values of their partners and suppliers match up. Values help clients decide how a partner will behave when times get tough. They also give a good idea of the kind of people they will find on their account. Most independents have a strong set of values defined by the founders and lived by those who join. The more those values are apparent and are seen to be driving decision-making the more the competitive advantage increases.

We probably all crave some normality and some predictability. In reality though, for independents, the never-ending lack of predictability is perhaps the platform that will see them stay in the ascendancy.

Jon Goulding, chief executive, Atomic London

It’s a cliché to say there’s never been a better time to be an Indie. So, let’s not go down that route. In all honesty I don’t think you could say it’s a brilliant time to be most companies at the moment. But, after what feels like a never-ending number of difficult socio-economic chapters in the last two years, being in control of your own destiny when everything else feels out of your control, is without question where I’d prefer to be. Rather than dancing to the tune of a large holding company, however forward looking, new age, not like the old holding companies they might claim to be.

But independence is a word taken out of context. By definition, it means not being controlled by someone else. Hardly an inspiring label to covet in of its itself. Independence when at its best is about a spirit of entrepreneurialism and doing things differently. And we’ve seen, despite an overall slow-down in the advertising market, clients increasingly looking to indie agencies as a more likely source of that spirit in the work they do and how they work for their clients. It’s why more and more clients of all sizes are now coming to indies as they simply can’t get that from networks.

Nowadays though, there’s another important thing they’re looking for from indie agencies. A trusted guide to help them navigate and simplify a bewilderingly complex media landscape. Personally, I think indie agencies are much better placed to flex the shape of their creative output in response to client needs, rather than sell clients 30 metres worth of whatever they’ve sold their clients for years.

But I wouldn’t say it’s all rosy in indie land either. The health of the indie sector and the contribution it makes to the dynamism of the new business market is often defined by how many new indie agencies start up every year. Rather than how well indie agencies are actually performing overall. Because it’s only the latter that really contributes to helping the creative agency market grow at a macro level, and making the industry an attractive, exciting and rewarding place to work.

The future health of the indie sector therefore is actually about the established indie agencies like ours, being properly entrepreneurial, as they were the day they opened their doors. And doing something truly progressive that start-up indie agencies can’t do yet. Finding avenues to significantly invest and grow in creative ways that far outweigh the slow-moving growth rate of the creative agency market, despite any economic headwinds.


LinkedIn iconx

Your Privacy

We use cookies to give you the best online experience. Please let us know if you agree to all of these cookies.