From Publicis buying LBi to WPP acquiring AKQA and Fortune Cookie, almost every significant independent in the digital space has been snapped up by a major network. As part of The Drum's focus on agency independence, Nigel Vaz, MD of the determinedly independent SapientNitro, tells The Drum why joining a network isn’t always the best approach.Nigel Vaz shared the following views in an interview with Cameron Clarke
I almost feel like, to some extent, acquiring digital agencies was a defensive play. It was almost about preserving the status quo, because ‘now those guys are owned by us they can’t compete against us’. If I look at the market or the industry there have been some terrible consequences of that behaviour.I’ve yet to see a really good example of where that’s worked. And there are reasons for that. The first, and this is a concern I have more broadly about the industry: why did the individual sell in the first place? Was it because they weren’t able to be competitive? Was it because the scale and size of everybody around them made it very hard for them to be relevant to clients? Was it because the financial incentives were so great? You have to understand the ‘why’ there.Ultimately what you’re buying in our industry is people, because there’s no products, there’s no software, there’s no systems. There’s no ‘thing’ there; it’s the people. So you have to ask yourself, why would a group of entrepreneurs who run their own business and are reasonably successful sell? If the reason is monetarily they want to be in a different financial situation, that’s great. That’s one reason why this doesn’t typically work. Those people are now in a fundamentally different monetary situation than they were in earlier, and life has bigger priorities than running an agency.The second reason is because the worlds are fundamentally different. They didn’t start an agency because they wanted to be part of a stable of companies that were made to work together, where the brands, and the culture, and the management style of each of those agencies is different. Agencies are all about culture; making us as individuals give that up to meld with someone else with a fundamentally different ethos and culture is a very hard thing to do. Most of these people are not assimilated. They are kept in the same conditions they were in, just probably with far greater financial controls. They’re in the same old offices, in the same location for the most part but they probably now have less financial and directional freedom and are often told what they can and can’t pitch for and if they are going to pitch, who or whom they’re going to pitch with. Fundamentally you’re taking people from agencies that have competed against each other all their lives, that have different cultures and different value systems, and you’re forcing them to collaborate. If you can stay independent, why wouldn’t you? We’re fiercely independent. Unless for some terribly unfortunate reason we were forced to sell, I would never imagine that we would get through a management conversation and choose that as an option. The way I think about our ethos is it’s all about the sort of impact we’re able to make for our clients. We don’t see how getting acquired and having a new owner and being told what we can and can’t do, but still having the same offices and the same people, helps us in and way shape or form. Where’s the value to our clients or to us? Even in the advertising space, what’s the one agency everybody talks about all the time? It’s Wieden + Kennedy. Why? Because Wieden + Kennedy is independent. Why don’t people stick it out? Why aren’t there more Wieden + Kennedys and more SapientNitros? Frankly, I don’t know. But I do worry that it’s a cultural thing that if you’re starting an agency now, the idea is to sell it. You’re not raising wild salmon, you’re raising farmed salmon because you know it needs to end up on a holding company’s dinner plate. People always talk about the taste of salmon and how different it is between farmed and wild. There’s a reason for that, because one was farmed and one was not built to be served. That orientation makes a difference. If you build something to last and then you have to sell that’s one thing. But if you build something to sell I think there’s a fair amount of risk on the part of the acquirer. I think people need more role models; our industry has made too many heroes of people for buying or selling their agencies. What about the people who have stood the test of time and are willing to fight the fight every morning, not just when it’s easy but when it’s hard, when you’ve lost a big pitch, or when there’s a downturn and you might have to lay off people? That’s the joys of running an independent business: all of those challenges are yours to solve.Read more: Independent agencies - built to last or built to sell?