NCA founders

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The power of the agency brand

In the week that NCA sells to Ogilvy, it's clear that agencies need to invest in their own brands to attract clients and talent

By claire beale

Advertising agencies are in the business of building brands. Not all are very good at building their own.

But there’s a reason why agencies such as adam&eve, and more recently Uncommon and now this week New Commercial Arts, have carried price tags in the tens (and tens and tens) of millions of pounds when they’ve sold to holding companies such as Omnicom, Havas or WPP. Yes, they were all fast-growing businesses. Yes they were all hotbeds of standout talent. But crucially they were all strong brands that were able to do what strong brands do: command a premium beyond the value that the product itself delivers.

And if I was a marketer, I’d want to work with an ad agency that walked the talk like that. I’d also want to work with an agency that itself espoused the value of long-term brand investment over short-term, destructive cost-cutting but was also able to smartly recalibrate its product and positioning as (CMO) consumer demand shifted. And I’d want to work with an agency that was always fighting to take a market-leadership position with all the responsibilities for best-in-class governance and benchmark setting that implies. 

Of course, staying true to those brand values that commanded a premium can be hugely challenging once you’ve sold your business and are part of a bigger balance sheet. Advertising’s history books are bulging with examples of agencies that were bought for a premium by holding companies that immediately set about destroying their value by cutting costs and eroding cultures. At least New Commercial Arts’ truly exceptional co-founders James Murphy and David Golding have shown there’s another way – adam&eve continues to be a jewel in DDB/Omnicom’s crown, long after it was acquired and even after the founders left the business. Likewise agencies such as Gravity Road, BBH, Droga5, AMV, and T&Pm - building a strong brand and set of values remains a priority long after the ‘sold’ sign comes down.

Not all independent agencies building their own brand do so with an eye on a sale. Mother remains steadfastly uninterested in cashing in on its premium-of-premium positioning by selling out, and continually invests intelligently, financially, proudly in its own brand simply because that’s the best way to attract and retain clients and talent. And obviously even long after the entrepreneurial DNA has washed through, some agencies still excel at their own brand-building. Take Leo Burnett, which has been riding high as agency of the year(s) despite being well and truly part of Publicis Groupe. Full credit to Charlie Rudd, Carly Avener and the team there for (re)building such a strong brand within Publicis’ Power Of One proposition. But for too long too many agencies have failed to confidently invest in their own brand, and the days of being able to survive as a bland, undifferentiated agency in an ever more competitive market are over.

I’m confident NCA will continue to flourish under the Ogilvy Group banner; the people there are properly talented (with CCO Ian Heartfield and customer experience chief Rob Curran first class in their fields) and James Murphy is now going to be running the Ogilvy Group in the UK, taking over from the consummate Fiona Gordon who is fittingly stepping up to be global CEO of Ogilvy Advertising. And, of course, there’s also an earn-out to be delivered. Meanwhile Ogilvy's global chief Devika Bulchandani is one of the very smartest operators around and will fight to protect the value of her prize buy.

I hope the acquisition will also help galvanise the UK agency marketplace. A shake-up like this is always good for getting everyone to turn up the dial. And having James Murphy back at the controls of one of the industry's biggest agencies will be fascinating to observe. Hopefully with the two most successful start-ups of the last decade - Uncommon and NCA - now tethered to the holding company model, the way is clear for a new wave of start-ups with ways of working that challenge the status quo. But the gauntlet is now down for those agencies that still haven’t quite worked out why they exist; if you don’t know how to build your own brand, why should any other business trust you to build theirs?

Finally, a word on WPP. It’s exhilarating to see that the company still has an appetite for investment in creative businesses and in top talent, even though in the scheme of things this is a small deal. The narrative – not just for WPP but for most of the major groups – has slipped into one of nervous consolidation. It’s so good to see that amongst some necessary rationalisation, there’s still a clear place for optimism and expansion.

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