Shift or bust

There seems to be more activity across start ups and established independent agencies than we have seen in at least a decade. Is the appetite for indies finally landing in post-Covid corporate Australia, or will big brands ultimately seek the comfort and safety of the networked holding companies as things return to 'normal'.

Mi3 asked 17 indies, old and new, whether marketers' appetites matched the slew of new agency start-ups coming to market, what 2021 looks like for their business, and whether and why the renewed surge in the independent sector can take market share from the global networks.

Here's what they had to say.

Lindsey Evans, CEO, Special Group:

"The appetite from brand owners for less traditional ways of thinking, organising and working has never been stronger. The freedom that independence brings has been hugely valuable in being able to scrum with speed around business problems unencumbered from any dictates, legacy structures or unnecessary hierarchy.

"We have been most fortunate to have had our best year in the toughest of years and so we are very hopeful that that momentum will continue into 2021.  This year we have been entrusted to play in areas and markets that previously might not have been possible and going into next year we will take the lessons learned forward to further the impact we hope to make. 

"Firstly, brand owners are increasingly focused on the creative and strategic firepower that can build brand value and care less as to where that sits or how the engine room operates.  And secondly the opportunity for genuine collaboration. Collaboration is an overused word but the ability to structure for – and operate with – true collaboration is all too often impossible for big networks."

Managing Partner for Shadowboxer, Konrad Spilva:

"There’s definitely an appetite for change out there, but realistically I don’t think marketers and brands are specifically looking for indies, they’re looking for the best outcomes. Ultimately the value exchange in this business is about great work with great people, delivered at value and there’s no doubt right now that a lot of indies are creating a better environment for that to happen for clients than holding groups or large consulting firms, hence the growing demand.

"The next twelve months will see us really prove our model, building value not just through more clients and people, but ventures too, with work that proves the re-bundling of business, brand, CX and technology strategy accelerates growth and transformation. Internally though, the focus is simply expressed as ‘keep working with great people on meaningful projects’. The common factor so far for all of our client partners at Shadowboxer, whether they’re a founder, a CEO or a CMO, is that they’re all on a mission - and we hope that never stops.

"Every global network is going through some form of internal transformation and consolidation right now with a business model only geared up for large enterprise clients. And that means they’re a) too internally focused on delivering an operating margin, rather than on their clients business success and b) unable to work with scaling businesses, having some real skin in the game as an invested partner."

This is Flow Founder, Jimmy Hyett:

"I see this very similar to the early digital days, where forward-focused brands tested, innovated and trialled a new age of format and channel, while the late adopters took their time to accept and adopt a strong digital presence (some still have not yet made it). This follows a similar trend to the client-agency scene, but in our own media bubble.

"There’s definitely still a journey for some brands to break from the traditional holding group mindset. However, it won’t be long until the big holding groups no longer feel ‘safe’ when they are up against an indie in a pitch – quite the opposite. There’s a real gap in the market for an innovative and exciting independent agency to challenge the norm and put pressure on holding groups. That is where Flow will sit in 2021.

"However, the window is small, 2-3 years only for indies to really make their mark and become highly competitive. The holding groups will have to react, improve and emulate the indies. They will be building offerings similar to ours, attempting to become something other than a slow, old fashioned agency group… Which may mean acquiring those indies that are pushing the limits – and restarting the whole cycle."

Cummins & Partners CEO Chris Jeffares:

"A huge amount of our success over the last decade has been working with marketers and brands looking to partner with entrepreneurs who bring a different creative energy to their problems - clients have even told us how they selected us based on our independence. It's also not a new trend, but it is very important for the industry.

"We are incredibly excited about 2021. All of our clients are already ramping up and the agency has embraced a new way of working across our global network in Melbourne, Sydney and New York. In the last month alone, we have added three new clients working across offices pulling virtual teams together. It has massively rejuvenated our free-flowing start-up beginnings, our media and performance offering has doubled in size in the last six months alone, and we're predicting a lot of change as clients enter the new year with renewed appetite for growth. 

"We have been [taking market share from globals] for years. More than 70% of our business has come from clients who had previously been with global networks. Independent agencies just need to have greater ambition and unflinching belief. The greatest local and global agencies all have independent roots and Australia should be a hotbed of entrepreneurs across creative, media and technology. The time is now."

Kenny Hill, Founder & Creative Director, Akkomplice Group Australia:

"We’ve found a sweet spot for Akkomplice with big, grown up clients who need big, grown up solutions but with the nimble, agile benefits of a smaller, independent shop.  Our relationship with Kellogg’s is a great example of where a global network agency and an indie like Akkomplice can happily and successfully co-exist on the roster of a blue-chip client. Word seems to be spreading and it’s picking up pace

"2020 has been a great year for Akkomplice with a steady increase in scope from international brand leaders like Daimler and Kellogg’s as well as local challengers like Darrell Lea and Sirena.  We’ve recently added five new staff, including former Facebook strategist Emma Baston as Head of Digital and former Deepend/Versa Managing Director Jonny Clow, to boost our digital clout, all in preparation for a very healthy looking 2021.  We’re very fortunate to have financial certainty that comes with healthy retainer work from established clients to underpin our project work at Akkomplice.  When we don’t have to worry about paying the bills, we can focus all our energy on our clients.

"Time will tell if the renewed surge in the independent sector will continue to take market share from the networks, but if clients are genuine in their approach, commit to relationships, remunerate fairly (and pay their bills on time) then there’s no reason why indies can’t continue to flourish and grow. 

"However, if clients see indies as a place to harvest fast, cheap work in lieu of briefing and paying their network suppliers then it’ll all end in tears."

Jack Watts, Global CEO, Bastion Collective:

"In 11 years of building Bastion Collective, I have never seen more brands looking for a viable alternative to the 'Big Six' holding groups. I continually hear feedback from the decision-makers at clients that they have finally had enough of being treated like a number by the networks. The feedback is consistent, a lack of service, a lack of care, high turnover of staff and network agencies that sell the dream and then never actually work together across departments.

"The last hold out of the holding groups is scale and that is why they continue to retain the big end of town. That is the challenge to indies, to provide service at scale. Thousands of small independents won't bring down the holding companies. The challenge to the entire market is to provide what clients actually want - service, expertise, scale and breadth of offering - all in one place. 

"Super-indies (like the Singo's and Mitchell's before them) have to emerge over the next five years if the sector is to provide a genuine and viable alternative to the multinational groups. That is what we are focused on creating – but for the modern world."

Dan Monheit, Founder, Hardhat:

"When you see indies grow, it’s not because someone in Detroit won a global deal and handballed your region an account, or because a parent company on another continent agreed to underwrite you for 18 months so you can go out and create some award-winning work. When indies grow, it's because they’re generating valuable ideas that the market wants to buy right here, right now.

"The recent wave of action is clearly a signal that the market is not just looking for something different, but willing to act. One of the great things that I’ve seen come out of 2020 is a higher risk tolerance for many brands. With everything thrown up in the air, ambitious marketers took the opportunity to instigate projects with smaller, independent agencies that may have had a tough time running the procurement gauntlet when it was ‘business as usual’. As we come out the other side of it, many of us are seeing the success of these experimental projects blossom into larger, more meaningful relationships. 

"One truism of our industry is that the agencies with the best people always win. Always. Over the last two years, we’ve seen a real migration of top tier talent from networked agencies to independents. You don't really see it going the other way.  

"Marketers are more aware than ever before that smaller shops are now stacked with proven industry professionals. Today’s new indie players can go from start-up to shake-up very quickly because clients have confidence in the people behind the door, not the old logo on it.

"Like many industries, ours is one that’s built on momentum. More success brings bigger clients. Bigger clients bring bigger opportunities. Bigger opportunities bring greater success. And on it goes. The momentum is clearly swinging in the direction of the indies and I see no reason why this won’t continue into the years (and decades to come) to come."

Dan Beaumont, Managing Partner, The Royals:

"More and more marketers are including independent agencies on pitch lists. Some lists we’ve found ourselves on are all indies, which is fantastic. However, there are still a lot of marketers (and no doubt other members of executive teams) that are unsure about smaller, independent shops. The perceived safety of the “bigger” holding company brands is real. Which is strange considering most indie founders are ex-multinational execs themselves and have more experience. 

"I can’t wait to rip into 2021. We’ve handled this year very well considering how intense it’s been for us all. Maintaining existing partnerships and winning some significant business has positioned us for an exciting 2021, but we’re all looking forward to a rest over Christmas. Our people and the work we do for clients remain our focus. We’ve structured The Royals to improve our power to weight ratio – employing super-smart people and allowing them to get hands-on with clients. It’s highly productive and a lot of fun. 

"The category has shrunk significantly this year, so growth for most of us will unfortunately come at the expense of other businesses. There will be some clients that might move from one independent agency to another. It’s still unclear how the economy will react once Job Keeper stops, so we need to be prepared to fight hard for new business. 

"I think there’s been a big shift in the structure of agencies in the last 6-9 months that we saw coming a little while ago. Agencies will need to be leaner and meaner. Reducing overhead and overall headcount has been happening for a while, but might become the rule. Agencies won’t be judged by numbers of people any more, because size can’t be a marker for success. Bigger just isn’t better. Bigger is more expensive, slower and hierarchical – and clients know this."

RyanCap CEO, Simon Ryan:

"Marketers are seeking new models to drive business growth, they want new fresh ideas without legacy issues to help build brands and grow sales. Start up agencies are seeing unprecedented growth locally and internationally and the pandemic has caused large global agency networks to be inwardly focused. That means brands and marketers must look for partners that are going to grow their businesses without complication or red tape.

"Established independent agencies are seeing similar growth, yet many are not digital-first and must also transform to align to market growth agendas.  If the bulk of media spend is digital, clients need talent and capability within their agency that matches that direction.

"Clients want partners to advise, create and execute in multiple ecosystems, if you aren't agile, then market share will be taken."

Micah Walker, Co-Founder, Bear Meets Eagle on Fire:

"Some people still benefit within the existing structure and they’ll hold on for dear life, while others will try and do things differently, even if there’s no roadmap. And there’s no roadmap.

"We’ve tried to be smart about doing fewer things better in our first year and half and that’s allowed us to learn some things that should really help us moving forward. We’ve said no to things, been told no on some things, and also found some great partnerships. We have a pretty diverse range of projects in the studio - from brand creation and design, through to more campaign shaped work and a lot of that will be in market in 2021. It’s good to see some of that finally coming to fruition and I think it also just helps showcase the variety of things Bear can do.

"Of course. The two things that separate us from global holding companies are: One, flexibility. We don’t have to work within legacy systems or hierarchies. Two, talent. Unhappy people leave. And there are more options than ever before."

Will Lavender, Founder, CX Lavender:

"Marketers and brands are seeking specific skills to work with them, shoulder to shoulder, to put in place solutions in-house - by their nature, independents are flexible and nimble. Increasingly, it’s an even playing field and marketers and brands can trust independents to collaborate and deliver their strategic, creative and technical outcomes. The days of big strategic documents - that end up in a drawer somewhere- are over. Clients want practical solutions.

"Lots of change in 2021. Continued focus on agile creation. Pushing our technical optimisation harder. Launching the second phase of our digital creation platform, no_code. Hopefully, keeping our clients happy and winning new ones. There’s no doubt that global networks that are adapting to meet current market needs – and those which are in tune with the market are winning business and are therefore difficult to win share from.

"I guess the vulnerability is found within the top-heavy networks who have old ways of working. I do think that independents have the edge though. In our case, we have adaptable ways of working, more efficient methods of creation and technical enablement to get to market faster. Right now, we think this is the opportunity."

Carl Moggridge, Managing Partner, Magnum and Co:

"Do marketer appetites match the action from independents? Absolutely. As an example, we’ve been working with Converse HQ in Boston for the last three years, rolling out a campaign invented here, by us, in 27 cities around the world. We’re unbelievably proud of that. It shows the best brands simply want to work with the best partners, irrespective of the ownership structure, or location. Being in Australia also helps quite bizarrely. Clients brief us in the afternoon and wake up with everything being actioned.

"There are also many amazing independently owned Australian brands that want to work with independently owned Australian agencies. These types of companies fly under the radar but have massive ambitions. Many have been burnt by networks as well.

"That said, it isn’t something we’re seeing across the board – there is definitely a certain type of client that seeks out independent agencies. They have the freedom to appoint whoever they like, they love to be challenged and generally care about the quality of the work.

"If we’ve ever lost a pitch to a global network, most of the feedback is almost apologetic. ‘The team was great, you had the best thinking and ideas, but unfortunately, we have to stay with the global incumbent network (because it was easier, safer and they chucked in loads of stuff in for free). I’m not sure discounting and bundling services is a long term strategy for global networks, but we’re getting much better at sniffing out these types of pitches and politely declining the opportunity. So many hours go into pitching, I’d much rather spend it on our clients and developing our team. 

"Lastly, global contracts are still pervasive. Someone somewhere thinks it’s a great idea to mandate local clients must work with a certain agency, even if they don’t want to and will get a rubbish experience. I’m really gutted for those marketers as they genuinely want to do different things, they’re just handcuffed by red tape.

"Unlike global networks, we don’t need to appeal to everyone and do every single thing a brand desires. We are experts in brand communications. We believe there are brands out there that care about cultural innovation as much as marketing innovation – so let’s work with them. Excuse the gag, but I think a solid culture stack eats a tech stack for breakfast. Working with brands on a mission to change things in a category is where we’re heading and our independence allows us to stick to that.

"Independent agencies can take market share from the global holding companies, they just need to resist the urge to copy networks and say yes to every brief. Find a market that values your expertise and be OK appealing to the right brands, not just all the brands."

Ryval Media MD, Joseph Pardillo:

"We see continued momentum and our client partnership model will see Ryval Media work with many more brands and increase our geographic footprint.  Our strategic vision will see the business growing in 2021 with a clear focus on clients, culture and high performing talent. We have more people contacting us for roles than we can fill at the moment, part of my role is to ensure we nurture our rising talent and continue to grow as a team".

Akcelo Founder Aden Hepburn:

"There’s a definite swing in motion towards new models and new ways of working which ultimately opens the door for new start-up agencies doing things differently. The pressures on marketers have never been higher, which in turn creates the demand for experimentation and more focused attention from specialist talent, increasing appetite to work with new agencies. 

"Accelerating the momentum, 2020 has been an intense and rewarding year, and to be able to build a business from scratch in Covid means we’re now equipped for almost anything, set up to be more agile and resourceful than ever. 

"Can indies continue to take share from the holding companies? We’re already seeing it! Perhaps not from the globally aligned accounts, but from more locally driven businesses, it’s happening already. The two things: Agility without legacy is key. It’s a competitive advantage and allows agencies to be more focused on great work. Secondly, talent: The best talent seems to be exiting the bigger groups for more flexible independent agencies that align to their values and vision."

The Hallway CEO, Jules Hall:

"It's not a case of can independents take market share from networks. We've been taking market share from them for the 13 years we have been in business and I don't think that's going to change. This is being driven by renewed priorities and requirements from clients and also a shift in the attitude of key talent. Where once a job at a network was considered the zenith, that mindset has shifted. Some of the most experienced and talented practitioners are now opting for indies because they are given greater freedom and importantly, the ability to fail, and clients are recognising that."

Hatched Media Managing Partner, Adrian Roeling:

"It’s likely that most independents will continue to see growth next year and the top reasons why are simple – service and craft. 

"Indies are able to resource properly because many of the networks have, for an age, been forced to reduce head count to return margin to International HQ. That long term under-resourcing has meant, where there are senior and capable teams in place, they are burnt out and clients are simply disengaged with those businesses and voting with their feet. 

"Secondly, from our perspective, we put the craft of media planning and buying at the centre of what we do.  That has been lost in the big end of town, replaced with pushing clients into high margin business units and decisions based on commercial pressures, not true insight."

Adam Ferrier, Founder, Thinkerbell:

“I think indie agencies have a massive advantage in that they can a) do what they want and b) don’t have to pay crazy management fees.

“Therefore they should be doing better than agencies in holding companies. The never ending ladder of management, spread over many competing agencies and agendas, can also make for cutthroat cultures within some holding companies: the less competing brands and the more ‘unified’ the vision, the more that kind of silliness tends to disappear.  

“That said, I think some holding companies can be ok or at least neutral for an agency, while some can be disastrous (RIP many top agencies that no longer exist).  

“With the addition of the new breed of indies - Thinkerbell at three years old suddenly feels well established - the work and level of service will only get better. As Nelson Mandela said: The stronger your enemy the stronger you become. So bring them on – we wish them all luck.  

“2021 looks a great opportunity to bed down what 2020 taught us: be grateful for what we have, focus on connections and relationships, and try not to be a dick. We’ll keep on trying to deliver measured magic. 

“Can we collectively take more business from the networks? The change in market is noticeable on pitch lists. They used to chuck one indie on there to mix it up, now they are chucking one multi-national into the mix.  

“I can only speak from our experience in that there appears to be an explosion of commerce and brands and businesses needing brand and marketing communications support.”  

Loan Morris, CEO, iNC Digital Media

“We’ve noticed some of the legacy barriers coming down down as marketers and brands demand more flexibility and agility from their partners.

“The pandemic has accelerated this shift as brands and marketers are more open to taking calculated risk on a perceived “smaller” agency. Indies offer scale, technology, innovative ideas and a start-up mentality that brands and marketers welcome as our ‘new normal’ requires tremendous agility and grit. They can expect their agency to be a true extension of their business and to manage the dollars as if they were their own.  

“After separating from ARN in April 2020, we see 2021 as our opportunity to really show who we are – and the year when we take data to new heights, double down on programmatic audio and DOOH and show what our proprietary Impulse Screen technology can do.

“Can indie agencies take share from the global networks? Yes and we’re already seeing it! The main reasons are agility and care. Agility because our lean structure and start-up mentality allow us to respond accurately and quickly to briefs; and care as we truly care for outcomes and results - but also the journey to get there being as ethical and sustainable as possible. In our view, that makes our approach entirely different and powerful.”