From St Ives to Swindon and Bournemouth to Bristol, The Drum recently spoke to some of the South West's top creative marketing agencies. Here we find out the current state of the industry in the region, what big changes have taken place, and what sectors are in decline or growth.
What is the state of the creative marketing industry in the South West?
Saman Mansourpour, managing partner, The Agency: The creative marketing industry in the South West is ever buoyant. A centre for digital excellence, which now makes up a high percentage of client spend means that the regions early adoption of digital technologies, and investment in digital education and people as a whole, largely helped by the universities of Bath and Bristol (UWE), means many choose to stick around, or at least return post London.
In addition there has been a lot of agency consolidation since the 2008 economic crisis. The region saw a number of mergers and acquisitions, as well as distressed purchases. This has left fewer mid-size agencies today, propped up the revenues of larger agencies and led to an influx in the number of start-ups. Many people have chosen to pursue freelance careers, and the more successful one’s have flourished organically into small businesses. The clients appetite for smaller providers seems to have grown in line with niche requirements, and roster consolidation has seemingly squeezed out many of the mid-size agencies, leaving large and small.
The continuing change in agency structure has meant that permanent recruitment of quality talent is more difficult than ever, as many choose to remain with long-term employers or pursue a more lucrative but short-term contract or freelance career. A shortage in full time staff, and reliance on contractors does mean that margins can be squeezed.
Richard Spruce, creative director, Stuff Advertising:I would say it’s buoyant. The last year has been our busiest to date and I’m hearing this from a lot of agencies, particularly the smaller ones in the region. The work is definitely out there but clients are expecting more for their money. Budgets remain tight but expectations continue to grow.
Tony Stiles, creative director, Smith & Milton Bristol:Comparatively healthy. With the economy flat, companies are turning to branding to differentiate themselves and marketing to raise profile, and the creative industries are benefitting from this. It’s never been more important to produce simple creative that has impact, especially in the digital market. Clients are demanding more for their money, but the work is there.
Paul Smith, business development director, RLA:The South West creative industry is flourishing as a lot of clients look outside of London for what I think is comparable skill but at significantly greater value for money.
Mark Mason, CEO, Mubaloo:Like many areas the South West creative market is definitely feeling the pinch of the economic climate. Those who can survive through this period will come out of it stronger, leaner and fitter that ever before. Recessions actually create better businesses.
Neil Collard, MD, e3:These are exciting times for the creative industries here in the South West. The area boasts the most competitive and productive economy of any large English city outside of London, with world recognised companies such as Aardman Animations, the BBC and HP. e3 is in the midst of all this, sitting alongside developments such as The Enterprise Zone - a centrally located business hub with a state-of-the-art infrastructure, focused 100 per cent on driving growth for businesses in the region.
Dave Meneer, director, Wolf Rock:A creative place for creative thinkers – because of our location we have 'space' to think and beautiful environments that stimulate creative minds. People are relocating for a better work-life balance and this shift in headspace produces some great work. However in reality the industry growth and innovation tends be average because it's constrained by local clients lack of courage to be creative and ever decreasing budgets.
Mike Spurr, director, Duttons:This sector in the South West has been reliably consistent and strong, although right now, just like the wider economy, it’s facing up to some pressing challenges. The percentage of micro-businesses is higher than average and many of them have relatively precarious finances, with a third seeing no net profits or profits of less than £25,000 in 2011 (according to a recently published Bristol Media survey). But there is a mood of cautious optimism now emerging, with recruitment and relocation starting to pick up again and more confident outlook for many agencies.
Paul Handford, executive director, redtag:A healthy state. At redtag we have seen consistent growth over the last few years, with both existing and new clients looking to launch new products and market their way to success. Rather than reduce their marketing spends, we find that clients are wanting to get better returns from their existing budgets, therefore innovation, accountability and experience are major factors when clients decide to work with an agency.
David Flavell, managing Director, Pangaea TV Production:If you were asked to think about which type of industries might be flourishing in the South West today, Creative Marketing and TV Production might not immediately spring to mind. Within the swirling media hub that is London, there used to be a perception that the South West was a parochial, production backwater. However, in 2012 this couldn’t be further from the truth. Creative Marketing and TV Production is thriving with many businesses punching well above their weight, successfully competing against national companies and winning major contracts. The South West now benefits from a wide range of agencies and TV production companies that have proved they are perfectly capable of delivering truly top class work at a national level. On the back of these achievements I believe that many out of date preconceptions have been swept away and now, more than ever, companies from the South West really are competing on their own merit.
Gellan Watt, managing director, Thinking Juice:It's tough. Like everywhere. We're doing great things, winning business and delivering big results - but we're working harder than ever, and faster than ever. Luckily we're built to be able to do it. Nimble, efficient and packed with talent. But those agencies that aren't, are very clearly finding it hard. Some big agency brands of years gone by are suffering. It's sad, but the world has changed and keeps changing. It's not enough to be good. Today the bar is great. And relevancy is more important than ever. Not just the clients' relevancy. Same goes for the agency. We have to be ahead of the game. It's no longer our clients competitors that are moving fast, it's their customers. And agency has to be strategically led, with brilliant planning and analytics to even be at the table for the best and biggest clients.
Have there been any big changes in the past year?
Saman Mansourpour, managing partner, The Agency:We have been building on the good work that we have done since 2008, many of it first-in-class campaigns using new and emerging technologies, and used our proven track record to focus our expertise on how we grow. We have bolstered our strategy and planning teams in line with our clients needs and increased our focus on integrated communications. Real time test and learn campaign scenario’s enabled by the ever measurable digital channels has been a quick transition for most of our clients and relatively risk free. We are for the first time able to operate in a truly integrated way where striving for efficiency is everything and brand and creative are the differentiator.
Paul Smith, business development director, RLA:Certainly the failure of some key middle-weight agencies has been a real eye-opener so I think there has been a little consolidation which is worrying smaller companies a little.
Ella Romanos, CEO, Remode:The South West has been seeing growth in creative industries, particularly in games, over the last year. There is a great vibe and energy which seems to be encouraging collaboration, communication, innovation and creativity and ultimately growth of existing companies and the setting up of new ones. It's a promising move in the right direction and we're hopeful that it will continue over the coming years, with the South West well placed to take advantage of the fast changes to creative and marketing industries, brought about through recent development in digital and mobile applications. The region has a number of smaller, agile companies, hungry to grow and take advantage of these changes to become a leader in the UK.
Mark Mason, CEO, Mubaloo:A few creative businesses have gone to the wall, but on the whole companies have been treading water and are surviving. Fortunately my company, Mubaloo, is in growth sector, mobile apps, and we're seeing fantastic growth.
Dave Meneer, director, Wolf Rock:Clients have been more conservative. The recession bitten harder this year and clients are spending too much time analysing their gloom rather than seeing opportunities to gain market share.
Lisa Killbourn, group strategic director, Bray Leino:The loss of the COI SW roster is significant for SW agencies. The replacement of this with the new £520 million Government Procurement Service which is currently ploughing through nearly 500 bids from agencies across the UK for only 30 roster places seems likely to favour a few, big London players rather than the many in the regions. The ARM (Agile Route to Market) framework gives regional agencies some hope of government business, but only for projects under £100k. The closure of the COI office in Bristol and the SW Development Office, along with a reduction of funding for marketing tourism in the region will also bite.
David Flavell, managing Director, Pangaea TV Production:Looking at the broader picture, as the rules on TV branding have been relaxed and the number of digital channels has increased, advertiser funded programming (AFP) continues to open up a wealth of opportunities. In addition to this, the growth of online video ad campaigns has been especially noticeable. Video adverts that have the potential to go internationally viral, attracting a mass audience are now a real possibility on a budget. Rewind the clock just a few years and high quality video production was perceived by some clients as perhaps being the domain of only larger companies. With the adoption of digital and the convergence of media interfaces, these perceptions have changed considerably. It’s now perfectly cost effective for medium and smaller sized businesses to make use of video advertising, giving birth to new and innovative marketing and production opportunities.
Gellan Watt, managing director, Thinking Juice:Strangely, I've seen a lot of client movement. You'd imagine in times like this that their would be more value placed on long-term relationships and commitment. But people are unsettled. I've seen a lot of clients move work into London (for what reason I have no ideas - security?) only to move it back out when they get worse results. Other changes include the stampede towards social media, which very few clients have mastered, or understood, its true potential.
Are there any areas or sectors in growth or decline?
Saman Mansourpour, managing partner, The Agency:We’re investing heavily in our digital media and development departments. This is simply a reflection of where our clients interests and budgets lie, and where the consumer is moving. Mobile is a consideration on every brief we receive and recommend, and technologically future-proofing campaigns is front of mind for us and our clients. Many of our client organisations are focused on becoming consumer-centric, some adopt and adapt, others resist, largely due to their antiquated processes, procedures and backend systems, but all have recognised that the future of how people buy, sell and support is changing forever.
Print and offline media is still declining, with the their affiliated budgets being diverted into infrastructural change and online lead generation. And interestingly budgets allocated to content generation, particularly for online has steadily risen. Clients are looking for new and alternative ways to be front of their audiences mind, and much of it relies on new and exciting content delivered relevantly and regularly. This has meant that in recent years our film and photography budgets have increased and become more regular, as has copywriting. The lines between advertising, and PR seem to be increasingly blurred, largely due to the onset of social media. We predict interactive video will become a focus ahead of 4g, and budgets will once again shift from editorial to live action.
Richard Spruce, creative director, Stuff Advertising:Social media is the obvious main growth area. Clients are demanding more integration across campaigns and it’s an exciting time for the industry. We’ve just got to make sure we embrace the changes and keep up with technology.
Mark Mason, CEO, Mubaloo:I think the purely creative businesses are in decline. Every agency needs to be digital these days, that's what businesses expect. As for growth, mobile is definitely growing as I've mentioned but also social networking, UX consultancies and marketing automation agencies are seeing strong growth.
Paul Honey, managing director, Strange:Digital is thriving in the region and there are some brilliant agencies doing some fantastic work. I would expect digital agencies to continue to prosper in the South West as more and more client budget is funnelled into high performing digital campaigns.
Dave Meneer, director, Wolf Rock:There is a growth in smaller design businesses that keep ideas coming and overheads low. Growth is patchy and fragmented.
Paul Handford, executive director, redtag:We specialise in the Financial Services sector and have found that a combination of new regulation; consumer economic challenges; changes in how products are purchased and reduced consumer trust in financial brands has meant that marketing is now playing a more important part in business growth than ever before. As a result of this we are seeing growth in this sector.
David Flavell, managing Director, Pangaea TV Production:The interesting thing about this moment in time is the huge breadth of opportunities that are available to clients as they look to find new and innovative ways to support their sales and marketing activities. However, because the way we consume media is changing so quickly, the need to think creatively has never been so great. I don’t see any one section of the creative marketing industry suffering from an inevitable, terminal decline. However, within every sector of the industry, decline is a possibility if we are not quick to recognise the diversity of requirements in today’s climate and adapt our services and products accordingly. It’s no longer viable to sit back and go along with the status quo. Whatever the sector, I think that those companies that are prepared to think outside the box, provide innovative services and deliver excellent value for money will flourish.
Gellan Watt, managing director, Thinking Juice:PR agencies seem to be finding it tough. They are moving more and more into social media to find new budget. Mobile of course is growing at a rate of knots.