An independent state of mind: What does going it alone in a sea of networks mean for indies?
Following a week in which Publicis acquired Sapient and Dentsu Aegis snapped up Fetch, The Drum’s Cameron Clarke broaches the ever so sensitive subject that is the independent/network debate, hearing voices from both sides while pondering whether either status ever actually matters to a client.
For these formerly independent agencies, the appeal of joining the networks is obvious – from the almighty financial boon to the possibility of greater growth to come under the parentage of such global powerhouses. But for all they stand to gain, how significant a loss is the sacrificing of their independence?
When Engine Group chief executive Debbie Klein presided over the agency group’s £100m buyout by the private equity firm Lake Capital this summer, she said she had “never thought” about the idea of selling it to a network. So why was she so sure that would have been a bad idea? “We wanted a partner, not a network," she says now. "Someone we could continue to build with, not for. We’re very conscious that we are still growing and adapting all the time, we’re not yet – and wouldn’t ever want to be – the finished article.”
Three months since that deal was announced, Klein insists Engine remains an independent business by virtue of not being part of one of the networks. “In the UK, nothing has changed in terms of culture or approach. Our businesses are still doing work that excites them, they’re still hiring people who share our values. Their business plans if anything are just more ambitious, and we're actively looking at which brands we will export elsewhere to round out our offer.”
Fetch founder James Connelly, who negotiated his five-year-old agency’s estimated £30m sale to Dentsu Aegis, saw things differently. To realise the mobile marketing agency’s ambitious expansion targets in Asia and the US, it needed more than organic growth. Connelly weighed up the options. “You can raise a load of money from a bank – be owned therefore by a bank or VC or private equity company – and then you have to go on a warpath and make some acquisitions yourself,” he says. “Or you can find a really good parent who shares the same ambition and vision and do it that way. We opted for the second.”
Connelly, an impressively entrepreneurial 28-year-old, admits the move from being his own boss to becoming a cog in a huge corporate wheel will take some adjustment. “The only time I’ve worked in the corporate world was at IPC Media when I was 18. I was probably the most junior person you could get in the building. Now I’m going into a business with a CEO that has 25,000 employees worldwide. It would be silly for anyone to do a transaction like this and expect it all to be plain sailing and straightforward. Ultimately there are going to be a few challenges but they are very worthwhile taking on. I like new challenges.”
One man for whom this corporate world did not appeal was Matthew Charlton, chief executive of independent ad agency Brothers and Sisters. When he moved there in April, he went so far as to pen a post for The Drum titled ‘Why I chose an independent agency over a network’. He wrote then: “There are right now hardly any decent-sized, over 30 people, established independent agencies still left in London. Mother, Wieden+Kennedy, Brothers and Sisters, 101 and Albion.”
With two more independents now in the clutches of networks, what sort of industry does that leave us with? “The short answer to that question is an industry full of agencies who have to put the bottom line above creative product,” Charlton says. “Once you become owned by a publicly quoted company you have to understand that reality.”
Asked whether he sees any advantages to being part of a network, Charlton answers: “The advantage of being in a network depends on where you start. For brands like Wieden+Kennedy or BBH it's not very clear what they would gain apart from cash because they already have things pretty much locked down. There are times in agencies’ lives where it is possibly the right time. [SapientNitro’s European managing director] Nigel Vaz seemed pretty sure Sapient was not selling anytime soon but clearly circumstances, and the shape of the deal offered which suits their business need, have changed that.”
It is no surprise that Charlton references Wieden+Kennedy, which has been the poster child for agency independence ever since founder Dan Wieden uttered the immortal words: “We are never gonna sell this fucker.” The agency’s London managing director, Neil Christie, is ever so slightly more circumspect, but it’s evident whose side he’s on when he sums up the networks’ latest haul: “It's just another example of the consolidation that is leading to increasing homogeneity amongst the holding company-owned agencies. That can only be a good thing for those independents who are able to offer something individual and different.”
But here’s another view. What if independence doesn’t really matter at all? What if clients don't care? Perhaps surprisingly, that’s the opinion of independent agency boss James Freedman of Zone, who says: “I think independent agencies are obsessed with the notion of being independent but I don’t think any client goes ‘I’ve found this amazing agency, they’re independent’. They say ‘I’ve found an agency that has ambition, that has true expertise’. I don’t think independence in itself means anything. There are some great agencies that are part of networks and there are some crap agencies that are part of networks: the same goes for independence.”
Whatever your view on independence, most would agree that the big six holding groups’ land grab shows no sign of abating – but that isn’t to say the days of independent agencies are numbered. As Iris chief executive Ian Millner says: "With every bigger independent looking for more synergy and development to stay competitive – as with the Sapient deal – there’s a hundred small start-ups just getting going."
Just as we can be sure that more acquisitions are forthcoming, so too can we expect a new era of independent agencies to spin off as a result. As intriguing as watching what happens to Sapient and Fetch will be seeing who emerges in their shadow.
This feature is taken from the 12 November edition of The Drum magazine, which is available to buy from The Drum Store.
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SapientNitro, part of Sapient, is an integrated marketing and technology services firm. We create and engineer highly relevant experiences that accelerate business growth and fuel brand advocacy for our clients. By combining multi-channel marketing, multi-channel commerce and the technology that binds them, we influence customer behaviour across the spectrum of content, communication and commerce channels resulting in deeper, more meaningful relationships between customers and brands. SapientNitro services global leaders such as Chrysler, Citi, The Coca- Cola Company, Singapore Airlines, Target and Vodafone through our operations in North America, Europe and Asia-Pacific. For more information, visit our website or follow us on Twitter.Find out more
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Zone is the customer experience agency inside Cognizant. We generate value for businesses by creating transformative customer experiences.Find out more
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Publicis Groupe is a French multinational advertising and public relations company, and is the oldest and one of the largest marketing and communications companies in the world, by revenue, headquartered in Paris.Find out more