How agencies can remain independent and retain their culture as they grow—top executives share their tips

The ad industry is closely watching the crop of new independent agencies opening up, as it remains to be seen how many of these new shops will survive in the overcrowded market. For those that do, the question is whether they will remain independent as they seek to grow, or if they’ll attract interest from consultancies and private equity firms. “Staying independent is the hardest part,” said Wieden+Kennedy CEO Neal Arthur. “There are so many places who like creative culture when it’s sustainable, but then there are lots of reasons for that not to continue to be the case. “The world is better when there are more creative companies in it,” Arthur said. We only hope that there are companies that protect that.” A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here Ad Age interviewed 15 founders and leaders of agencies that have maintained their independence for a decade or more to discuss what it takes to sustain that—from weathering growing pains and fending off constant inquiries from potential buyers to scaling without the backing of a holding company or another parent corporation, all while striving to preserve their unique cultures. Included in the interviews are executives from W+K (founded in 1982); Translation (2004); Tombras (1946); Walrus (2005); Cornett (1984); Terri & Sandy (2010); Barrett Hofherr (formerly BarrettSF, founded in 2012); Langrand (2003); Preacher (2014); The Many (2009); TBA Outdoors (1959) and McGarrah Jessee (1996). Ad Age also spoke with younger agencies planning for the future, including four-year-old Mischief @ No Fixed Address, one of the industry’s hottest emerging shops, and eight-year-old Joan, which recently rebranded to reflect its evolution from its startup roots into a more established company. Also read: How to start an ad agency Many of these executives said they faced considerable hardships in leading and maintaining the independence of their shops. They agreed, however, that the benefits of having the freedom to make their own decisions, unbeholden to oftentimes publicly traded parent companies, outweighed any benefit of stability that such backing could offer. Sandy Greenberg, CEO of Terri & Sandy, recalled an example of the red tape that she and her retired Co-Founder Terri Meyer had to endure at a public holding company agency before opening their own shop. “We wanted to give a copywriter a $5,000 raise,” she said. “Two weeks after we requested it, we were told the NY CFO was on vacation. Then, we were told the North American CFO needed to approve it; he was in Tokyo. Then we found out it actually needed to be approved at the holding company level, but there was a raise freeze because the U.K. office had a terrible year. I was an exec VP at the time, and unable to take the most simple action to retain a superstar,” said Greenberg. “Magnify that example by 1,000 and that’s how powerless we were when it came to getting anything done,” she said. “At Terri & Sandy, a decision can be made in an instant.” Also read: Sandy Greenberg on learning to know her worth Fending off offers Starting up may be the easiest part of the process for an indie, said several executives interviewed, especially as major marketers increasingly see value in hiring smaller creative shops with fewer than 100 people, awarding them bigger accounts from the larger holding company agencies. “They’re so many off-the-shelf tools; you can have a website up like this, you can get your payroll systems up like that,” said Britton Upham, CEO of Austin-based agency McGarrah Jessee, which was founded 27 years ago by Mark McGarrah and Bryan Jessee. “There’s a lot of plug it in and hang a shingle and you’re off. I can be envious of some of that.” On the flip side, it may never have been more difficult for agencies to maintain their independence. Some of these shops eventually reach a larger size, or land a big client, and realize they need certain capabilities. Last year, Joan formed a partnership with independent media agency Crossmedia to add media capabilities to the agency, so it could better connect its creative campaigns to the buy side, according to Lisa Clunie, co-founder and CEO of Joan. Those types of partnerships are an alternative option for indie shops looking to scale. When it was founded in 2016, Joan set out to forgo certain traditional aspects of operating an agency, which included not hiring account people, Clunie said. But the agency quickly realized that it needed account people when it landed on the General Mills creative roster during its first year. “Because of that [win], we grew up really fast,” Clunie said. Mergers and acquisitions have been heating up in the ad industry as shops receive interest from a host of buyers, including holding companies, private equity firms, consultancies and independent agencies and networks such as Meet the People, Plus Company and MSQ. Some of the independent agencies that sold within the last year include influencer marketing agency Influential, which is being sold to Publicis Groupe; Work & Co, which was sold to Accenture Song in January; and Gut, which sold a majority stake to global tech and digital consultancy Globant last November. Tombras, meanwhile, grew its global footprint by acquiring Buenos Aires, Argentina-based creative agency Niña in August and Barkley and OKRP merged to become BarkleyOKRP in March. More: TombrasNiña’s first campaign since Niña’s acquisition It was difficult to determine the average time an agency is able to stay independent because “it’s so inconsistent,” said 4A’s CEO Marla Kaplowitz. But in an industry challenged by shrinking budgets and a move to project-based work, many shops at least take “minority PE investment” even if they “don’t fully sell,” she said. It’s also difficult to maintain independence when there are regular inquiries and lucrative offers coming in from potential buyers. “There really has to be an amazing, amazing, amazing reason to do it,” Joan’s Clunie said, noting that the agency does get “frequent” inquiries from potential acquirers. “Typically, what we have seen is people who want to acquire an agency so that a couple of years later they can bundle an offer and then sell that offer. It feels very financially driven.” Scott Brandon, CEO of digital marketing agency Brandon, whose father founded the agency 65 years ago in Myrtle Beach, South Carolina, said he considered a sale just once, for a “compelling offer” just a few months ago, but ultimately didn’t take it. “I get hammered all day long” from buyers, said Brandon, whose shop falls under the TBA Worldwide collection of agencies. “I’m not ready yet if I do exit. I have kids that work in the agency … I still like what I do. It just wasn’t the right time.” Also read: How to sell your small agency Christy Hiler, who bought Lexington, Kentucky-based agency Cornett in 2020 from her stepfather after working there for years said she is thinking about future options for the agency, which is celebrating its 40th anniversary. But the owner and chief executive would be more inclined to look at a potential partnership with another independent shop than sell to a private equity firm or the like. “It is interesting there are so many conversations about M&A right now,” Hiler said. “This year, I had more people wanting to talk to me about that than ever before. I would say, where we are I’m not considering that. I’m only three years into ownership. Right now, my focus is doing the best work in this business. That’s all I’m really focused on.” W+K still receives inquiries from potential buyers, said Arthur, even though Dan Wieden, the agency’s late co-founder and creative visionary, created a legal trust stipulating that the shop could never be sold. The agency is hellbent on staying independent, Arthur said. It is one reason he joined the shop 19 years ago, and the philosophy continues to draw talent. Especially in an industry where you never know what shop might sell, “people don’t have to worry about what’s going to happen next” at W+K, Arthur said. Mischief USA Chief Creative Officer and Co-Founder Greg Hahn said the agency hasn’t had to take outside investment in the four years since its founding. Although Mischief is part of NFA’s The Grid network, it is fully founder funded, owned and operated. W+K has been a North Star for Hahn. “When everyone is complaining ‘there are no good independent agencies, everyone's sold out,’ there is always Wieden+Kennedy,” he said. Read more: 10 independent agencies to know “They’re the exception that proves it can be done,” Hahn said. “They broke the ceiling that made it easier for the rest of us. The conversations I have with venture capitals, I always come back to what is in it for us? I could see how it would benefit you, but you tell me what's in it for us and the conversations usually stop there.” Keeping culture intact Oftentimes, unique, quirky cultures that allow bold creativity to thrive are a bragging point for independents, which can’t compete on scale with the holding companies. But how they maintain that culture, especially as they do look to grow, isn’t always easy. W+K has had to let its culture evolve as the agency aged and grew, Arthur said. Its offices in New York and London, for example, are different than its flagship Portland, Oregon hub, where W+K was founded, he said. New York, London and Portland “are very different” but they’re “still Wieden+Kennedy,” Arthur said. “Independence is not just a business structure, it gives license and freedom for offices to establish their own identity. New York has its own identity, because it’s New York. But every office feels familiar." The New York office has “a younger sister or brother upstart mentality, Arthur said. It comes from being in New York and having to break through through how many alternatives there are. London is always trying to be subversive and counterculture,” Arthur added. Joel Rodriguez, head of context planning at Steve Stoute’s Translation who rose through the ranks since coming on as an intern in 2011, said he’s seen the agency come a long way, growing into a 332-person powerhouse driving culturally relevant work for major marketers including State Farm and AT&T. Related: Why clients should care about agency culture When he joined 13 years ago, Rodriguez said the culture around marketing wasn’t being talked about and Translation was being viewed as a multicultural agency. The expansions and programs Translation has put in place since—including combining with Stoute’s distributor and creator network, UnitedMasters, and his own role in growing the agency’s context strategy team—only reinforced the culture that the agency was originally founded on almost 20 years ago, Rodriguez said. “Context is a discipline that only exists at Translation,” Rodriguez said, noting “the focus of my team is on how we choreograph a campaign, how we choreograph a message and idea so that it connects in culture … it’s that independent spirit that we have to go build something that we believe needs to exist if it doesn’t currently exist. “Over the course of 13 years, I think we’ve evolved to become more of ourselves, really double down on our DNA,” he said. Dooley Tombras, president of Knoxville, Tennessee-based Tombras—which his grandfather started as a printing- and radio-focused advertising shop 78 years ago—said his agency still has an entrepreneurial spirit that is felt throughout the agency, even as it grows. In addition to recently expanding its footprint to Argentina, the now 500-person agency last year won 13 new accounts, 10 of which were agency of record assignments, and handled $700 million in media business. He attributed that entrepreneurial spirit to being independently- and family-owned. “I talk about Tombras as independence with scale,” Tombras said, “which is very differentiating. Very few independent agencies get there because most independent agencies’ goal is to exit. My grandfather set the culture originally and then it was very seamless with my dad maintaining that. The benefit to our employees is tremendous stability.” He said he once approved an entire department reorganization that a former IPG executive who Tombras recruited proposed in the span of a few days. “If you could have seen this person, they were like, ‘Oh my God, what you just did in five minutes would have taken IPG six months,’” Tombras said. Still, Tombras said his agency didn’t come without growing pains. He cited his biggest challenge as the shop’s president was scaling the agency’s headcount beyond 150 people. He pointed to British anthropologist Robin Dunbar’s theory that humans can only maintain 150 stable relationships at a time. Several executives interviewed for this story said they’d be wary of expanding their agencies beyond 150 people in order to main a solid culture. But “when we went from 50 people to 150 people, it was not different at all,” Tombras said. “You could still operate where every single person knew every single person on a personal basis. It was maybe 2016, 2017 when we scaled from 150 to 250 people, and we had to institute a lot of changes, do a lot of reorgs, change systems, get better software, hire experts who had wisdom from running larger agencies. But once we got through those growing pains, we were able to reset the foundation.” Jamie Barrett—founder and executive creative director of Barrett Hofherr, which was renamed from BarrettSF after adding Partner and Chief Strategy Officer Matt Hofherr in 2021—said agency owners need to work on the culture every day. While the agency has offered various perks to employees, such as trips to Hawaii and an annual miniature golf tournament, the culture really comes down to the energy the executives bring, Barrett and Hofherr said. “The more important part of culture is the day to day,” Barrett said. “You can talk culture, you can institutionalize culture, you can create rituals and events and that's all good. But you have to come in and turn up the music every once in a while; you have to come out of the elevator with some energy. “Matt and I are kind of freakish in that,” he said. “We’ve both been in the business for more than 30 years and we still really love it. I think people feel that and go ‘if those two old dudes are loving this day to day advertising life, then I’m with them.’” Hofherr has spent half his career at independent agencies and the other half at holding companies. “Independents make it more fun,” he said, adding that “Culture is a little bit like social media. If you really listen, the culture will define itself.” Rob Baird, founder and chief creative officer of Preacher, which was founded in 2014, said his shop has always operated with the mantra of being “soulful,” a value that feels intrinsic to being based in Austin, Texas, a mecca for culture and music. The shop has always stayed true to its culture, and now larger clients are recognizing it, too, he said. The indie shop has recently won major accounts, including lead duties for GMC. “We try to show up with the people that are going to really work on the business and work on it the way we would really work with those clients and just pretend we're already working for them and try not to get fired,” Baird said of the agency’s pitch approach. As Mischief, the industry’s new creative darling, now prepares to enter its fifth year, Hahn said he’s “very aware of the slippery slopes that can happen in growing.” He said part of building Mischief to do the type of bold work that it does for clients including Tubi and Tinder (see a recent spot beflow) is actually having a very business-oriented foundation. “It's actually very buttoned up in the back end of it. You can’t be wild in every department because then there’s chaos,” Hahn said. As he looks to maintain a culture where creativity can thrive, Hahn said Mischief has been very deliberate in who it hires and what clients it takes on. In the past year, the agency said it has turned down 250 business opportunities. “We say ‘no’ a lot and I think that’s one of our superpowers,” Hahn said. “As long as you bring in people who are there for the right reasons and they understand what they're there for and have the passion that the agency was founded on, you can grow. You have to be really careful in hiring.” Succession and exit planning Another area in which independent agencies, in particular, struggle with is in mapping out succession and exit plans. Brandon, the CEO of the digital marketing agency by the same name, was a lawyer before he bought his agency from his dad, which put him in debt, and so he quickly realized the importance of planning for the future. He said he wanted to protect his own family from inheriting that debt should anything happen to him. So he set up “an employee trust that’s funded by life insurance. If I die, [his president and chief operating officer] has an agreement: she can buy the agency on the agreed-upon value and use that life insurance to pay for a good bit of it. If I die, there are no questions. In terms of TBA, things will continue to rock right along,” Brandon said. Brandon said it “took work to figure out” his exit plan, adding that his succession plan is also “detailed”—it allows for his president and chief operating officer, who would be his successor, to be incentivized to stay. Also read: How to pick the right leaders for your succession Few of the executives interviewed had a clear succession or exit plan outlined when asked about them. Joe Parrish, founding partner and chief creative officer of The Variable, didn’t have one until 2021, when it took an investment from Chicago-based private equity firm Svoboda Capital (Svoboda Capital also took a “significant investment” in Highdive in May). The decision came after Parrish’s partner, co-founder and executive board advisor Keith Vest was diagnosed with stage 4 kidney cancer that had metastasized. “After years of slow, but steady growth,” following its 2011 founding, “Keith and I were starting to feel optimistic about what we were able to create at The Variable,” said Parrish, until the diagnosis. Fortunately, Vest fully recovered. But at the time, the partners’ operating agreement had a buy/sell provision, meaning “If Keith or I died, our families would get a one-time payment for half of the agreed-upon value of the business. A value that we would be responsible for updating yearly. Unfortunately, the value of the company had increased significantly since we had last updated our operating agreement,” said Parrish. “That presented two problems: Keith’s family was due more money than was outlined in our agreement and, even though the business was growing, it didn’t have enough free cash to pull that amount out of the business,” he added, resulting in the need for outside investment. Some executives said they’re too focused on running their agencies to think about an exit or succession. But as The Variable’s Parrish underscored, no one really knows when life will throw a wrench into your plans. Brandon said it’s hard for any business to map out these plans. “Finding the right people you trust and you’re very confident will execute the agreement if something happens to you; that can be difficult for anybody,” he said. “Two, it’s the emotional part of it. People who start their own agency don’t want to give it up. Even death, people don’t want to think about it. It’s complicated." Tips for new indies Executives interviewed for this story also shared some of their top tips for surviving as an independent. “Embrace the suck,” advised Shannon Langrand, founder and CEO of Houston, Texas-based strategy and creative shop Langrand. “Companies grow, like humans do, in fits and starts. And the journey is never a linear path forward. So it’s important to approach the down times with a certain equanimity. Own your part. Take decisive action. But go easy on yourself, too. It’s all part of the game.” Surviving the swings of losing accounts and how to make up for the revenue loss is the toughest part of running an agency, Upham said, so it’s best to prepare for the worst. “The hardest times are the scheduling of when something’s leaving and you’re wanting something else to come,” he said. “The AOR [accounts] can be huge and can touch 35 to 45 jobs. The hardest times are when one of those start to rumble and then you're like, ‘How are we going to replace that with project work?’” Frances Webster, owner and CEO of Walrus, advised agency founders to never have a Plan B, saying it makes it too easy for executives to give up and go back to a corporate job. “Be realistic,” added Deacon Webster, Frances’ husband, and owner and chief creative officer of Walrus. “There is a misunderstanding of how difficult it is to be the next Mischief or Wieden+Kennedy. A lot of people, especially creatives who have spent a long time in large organizations where they may have been sheltered from some of the realities of [scopes of work] and that kind of thing, they think ‘The only thing that’s really standing between me and being the next Dan Wieden is these stupid people over the top of me.’ “But the second you’re out there and you’ve got to make payroll and you’ve got to figure out a way to talk clients into buying that work, which is the hardest thing—a lot of people can come up with it, but selling it is super tricky—that’s where the rubber hits the road.”

How agencies can remain independent and retain their culture as they grow—top executives share their tips

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