Small Agencies Crush Big Ones: It's Not Even Close
After 20 years in the advertising industry, there's one thing I can say with great certitude: small agencies crush big agencies. That's right, I said it. In fact, it's not even close.
You may discount my opinion because it comes from a founder of a small agency. But if I worked for a major brand, there is no way I would consider a large agency over a small one. Here's why:
Flexibility Grows Fresh Ideas
Success of small agencies depends on the ability to leverage flexibility and develop fresh ideas. Each team member must be an expert at his or her job and develop additional skills, depending upon the project. An account person may expand into social strategy, an art director may create information architecture, a tech lead may assist with content strategy. Each person is exposed to a broad array of tactics and learns when to use each tool to solve a range of client challenges. Each team member is focused on client goals, not necessarily his or her defined role. This is critically important because marketing is being redefined each day. Flexibility is the key to success; every touch point, ranging from retail to social media, provides an opportunity to expand the definition of advertising. Flexibility is wired into each small-agency shop from birth.
For large agencies, on the other hand, flexibility is antithetical. It conflicts with their ability to generate profits because they are burdened with a legacy business model. Large agencies have typically been in business for decades. They are good at creating a certain set of deliverables -- typically, TV spots and standard banner ads. But the ad industry has been disrupted by technology. Great agencies need to help clients shift from interruptive messages to immersive experiences. An agency that is saddled with legacy skills, legacy expenses and a holding company that enforces a minimum net margin every quarter can have a difficult time generating and executing groundbreaking ideas. What's good for the client's brand may not be good for the agency's bottom line. As brand growth increasingly gets driven by revolutionary approaches to marketing, many large agencies will increasingly provide guidance that is counter to the brand's goals.
Small agencies tend to be younger and less beholden to old ways of doing business. It may be just as challenging for a small agency to develop and execute ideas, but at least they're not facing the constraint of a legacy system. They can focus on client needs rather than their own short-term net margin. They can shift roles and deliverables based on the target audience, not the internal business model.
Culture Spurs Risk Taking
Agencies truly come down to one thing -- people. Interactions, camaraderie and synergies are the key ingredients for success. They are fueled by a culture that encourages this. Small agencies consider culture a key priority, but big agencies are often clueless. Over and over, you hear shocking comments from large-agency people like "we have internal politics" and "our creative team doesn't talk to our account team."
Culture isn't important simply to make the day fun. A culture that puts a premium on communication and team spirit enables a small agency to fail quickly and turn those small failures into major wins. The team can take risks. At a large agency, where there is more to lose, clients are often shepherded to deliverables that the agency can safely create, regardless of the brand's exact needs. Small agencies know that they need to create breakthrough results to simply survive.
Of course, some large agencies are great. I'm enamored with Wieden and Kennedy's work, and W+K has created a great culture that promotes the concept of failing quickly. Big agencies do have a competitive advantage for many situations. If you need to quickly create a global campaign in multiple languages, for example, big agencies have the resources and the international footprint to get it done.
But the bottom line is this: Marketing executives need to make the tough decision of determining their top priority. If they want to create a breakthrough brand, put a premium on creativity, are willing to take risks and understand that advertising is ready for a revolution -- then small agencies simply crush big agencies. It's not even close.