Advertising Age reported on a “growing trend” whereby small independent creative agencies are winning big major accounts.
A closer look leads to wondering if the phenomenon is a “growing trend” or simply business as usual.
After all, it appears that accounts continue to be assigned via Corporate Cultural Collusion and cronyism, whereby past relationships prompt advertisers to award work to professional pals, sans a formal competitive review.
The scenario presents other issues:
• Minority-owned firms—which are typically small, as well as segregated into multicultural marketing siloes—routinely get disqualified from pitching major accounts. The excuses include the presumption that these companies lack the resources to handle big accounts. Yet the Ad Age content shows small White advertising agencies face no such restrictions.
• Minority-owned firms can even be shut out when the account calls for cultural expertise, as demonstrated by the recent Panda Express pitch. The business landed with Opinionated, who hired a multicultural shop to serve as consultants of color when the client mandated understanding the Chinese American experience and perspective. This sly tactic—which has forever been executed by White advertising agencies, especially for accounts with government contracts—was identified as Prime Redlining.
• When White holding companies create small White advertising agencies to exclusively service big accounts, the newly fabricated shops still enjoy priority status above any multicultural marketing enterprises within the network.
In summation, the “growing trend” could just be an offshoot of the persistent big problem known as systemic racism in Adland.
Small Creative Agencies Are Winning Major Accounts—Inside The Growing Trend
GM, Häagen-Dazs and Liberty Mutual Insurance have recently turned to shops with fewer than 100 employees
By Ewan Larkin
Small independent creative agencies are having a moment.
While holding company agencies are still the tried-and-true option for many marketers, several creative shops with fewer than 100 employees are turning heads and winning sizable accounts.
In the past month alone, Preacher won lead duties for GMC, snapping up some business from Publicis Groupe’s Leo Burnett, while Bandits & Friends won Liberty Mutual Insurance’s creative account, replacing Omnicom Group’s Goodby Silverstein & Partners. Meanwhile, nine-person shop nice&frank scooped up Häagen-Daz sand Opinionated nabbed Panda Express.
As marketers move more work in-house, some are turning to smaller creative agencies to work directly with senior executives and move quickly, according to industry insiders interviewed by Ad Age. And these shops are making changes, too, implementing niche strategies to court prospective clients and tapping new tools to help service them.
Marketers’ changing needs
Many brands are now in-housing work they’ve looked to larger agencies for in recent years, such as data, analysis and measurement, said Tom Denford, CEO and co-founder of consultancy ID Comms.
The data supports that theory: Some 30% of marketers said they moved more creative work in-house in the last 12 months, according to a June report from Canva and trade association MMA Global. That survey found 31% of surveyed marketers plan to move work in-house in the next year.
But brands still cannot internally replicate agencies’ steady “heartbeat of passionate creativity,” and marketers aren’t concerned about the size of the shop that helps meet that need, Denford said. (Nearly two-thirds—61%—of respondents in the Canva report said outsourcing was better for creative quality.) Small independent agencies are also set up to produce robust creative work, he added.
“If you run your own creative agency, or you join a small independent agency, you will absolutely have more freedom to work in the ways that they want, because it's going to be privately owned,” Denford said. “You can be a bit more provocative. In fact, you probably push your clients to be a bit more provocative.”
Some holding company agency executives, however, said that a broader breadth of resources and talent allows them to better orient themselves around clients’ specific needs.
“If a client just needs a strategic and creative solution, we can deliver that. If they would like the full scale of our capabilities through TBWA and Omnicom, we're able to provide that as well,” said Ben Myers, North American chief marketing officer at TBWA. “We can assemble the right team to solve the problem.”
Holding company agencies are certainly still in demand. Earlier this month, AstraZeneca added WPP to the global creative roster of its massive oncology business. And Kenvue, the consumer health company that was spun off from Johnson & Johnson last year, recently awarded creative work across select brands to Interpublic Group of Cos.’ FCB and Omnicom’s BBDO while also continuing to work with Stagwell’s Doner.
Why smaller shops are finding success
Small agencies are also in high demand because of their talent. Many of these shops are composed of senior practitioners who voluntarily left holding companies or had their roles cut, according to several agency executives who spoke to Ad Age.
“With these smaller agencies, you’re not going to compromise on talent,” said Stephen Larkin, chief marketing officer at Erich & Kallman, who formerly spent seven years at IPG’s R/GA.
Some small agencies are winning business due to relationships formed while their executives worked at larger holding company shops. For example, Bandits & Friends Co-Chief Creative Officers David Suarez and Danny Gonzalez previously worked at GS&P, where they created Liberty Mutual’s recurring characters, LiMu Emu and Doug. Nice&frank Chief Strategy Officer Graham North also worked at GS&P, where he founded Brand Camp. Brand Camp has supported Blackstone, which has also worked with nice&frank.
Consistent access to senior practitioners is key, too, said Steve Boehler, founding partner of consultancy Mercer Island Group. In smaller agencies, executives “are going to work on the business” and, on a daily basis, know “what’s going on in that piece of business,” he said.
Rachel Jaiven, head of marketing for Häagen-Dazs U.S., which considered holding company agencies in its recent creative review, said the brand was looking for a relationship where it could work directly with strategic senior leaders, and a team that could be agile.
“We’re a huge brand … but it’s a small core team that’s making decisions, and we need to have an agency that understands that and can move quickly with us,” Jaiven said, adding that speed can sometimes be an issue with larger shops.
Several indie agency executives told Ad Age their senior leaders actively support clients’ daily business needs. But small agencies may struggle to maintain this strategy as they add more clients, one holding company agency executive said.
“It comes down to time. There’s only so many hours in the day,” this person said, speaking on condition of anonymity. “We’re not factories … Our products are our ideas and people, and you can only spread yourself so thin.”
Shops must work to hire savvy talent to service clients’ businesses, which executives can then help guide and train, according to this person. “That’s how agencies scale."
How they’re getting it done
Indie and smaller agencies “have to offer something different than everyone else offers” to get on marketers’ radar, according to Mark Figliulo, creative chairman and founder at Fig, citing his agency’s machine learning-powered data tool StoryData as an example.
Many agencies are specializing or putting a unique spin on the agency model, but there are other ways to stand out and win new business.
While pitching for Panda Express, Opinionated enlisted cross-cultural agency TDW+Co, which has experience connecting with Asian communities in addition to other demographics—a move that showed “humility and self-awareness that you don’t always find in the industry,” said Fabiola del Rio, the company’s VP of integrated marketing communications.
Technology can also make the difference. Bandits & Friends, which has 15 employees, uses a variety of tools to help with administrative functions such as IT and invoicing, said Courtney Berry, president and founder at the New York-based agency.
“I think that’s what allows us to operate in such a way that we can service larger clients without necessarily getting to a point of being unwieldy,” Berry told Ad Age.
Nice&Frank, recently named Ad Age’s 2024 Newcomer of the Year, aims to eschew the traditional pitch process by inviting prospective clients to a “get-it-all-out session,” a meeting where the agency creates prompts (and sometimes games) for marketers to share their greatest concerns, biggest challenges and past successes and failures.
“We ask frank questions, provide hot takes and get genuinely vulnerable with them,” said nice&frank President Tamera Geddes.
So far, so good. The agency, which has worked with PepsiCo, MLB’s San Francisco Giants and fitness brand Les Mills, said it hit $4.5 million in revenue during its first full year in 2023.
“We, of course, can’t always avoid the pitch process, but the honest truth is (that) once bring our true selves (and this process) to the table, it creates an entirely new environment and vibe that most of our clients simply want to get on board with,” said Geddes.
Preacher is extremely deliberate about the reviews it undertakes because of the sheer time and effort required, said Krystle Loyland, co-founder and CEO of the Austin, Texas-based agency.
“We’re doing very few pitches per year, and they’re ones that we really believe we have a right to win, and ones that we think we can uniquely solve for better than anybody else, because we need that kind of confidence to be able to win these,” Loyland said. “It’s less about big versus small … but just how intentional the agency is about these choices.”
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