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Startups San Francisco

Agency culture on the West Coast: How 'tinkering and developing' influences agency business models in San Francisco

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By Katie McQuater, Magazine Editor

February 3, 2016 | 3 min read

Just a few miles up the road from Silicon Valley, San Francisco's agencies face unique challenges in the hyper-competitive Bay Area.

The proximity to a culture of iteration and development normalised by startups and the large tech players has forced agencies in the area to adapt faster to keep pace.

We caught up with three agency MDs in the city to discuss the trends affecting agencies there, how technical innovation and the startup culture is affecting agency models in the Bay Area, and the role that agencies can play in culture (see video).

For Razorfish, for example, technical innovation and prototyping is a key part of the business model. "We have a culture of tinkering and developing. Prototyping and technical innovation is at the core of everything we do," explains Michael Chamberlin, managing director. "We try to find the right kind of employees that have that in their DNA – that want to solve problems and build."

Mike Barrett, managing director of advertising agency Heat, says startup culture influences agency culture in the West Coast as a result of the shared talent pool. "We share an employee base with startups. We've had people leave here and go and work for places like Lyft and Apple, and we've hired people from those places. As a result, when they get here they work the same way as they would at a startup. It's more iterative, it's faster paced and it resonates really well with the types of clients that we find ourselves working with."

The Silicon Valley question poses other unique challenges for West Coast agencies. Working with tech clients, who often have their own internal creative or media capabilities, means that a lot of the agency business is on a project by project basis rather than retainer based, challenging the fundamentals of client-agency relationships for many of these shops.

Many are also experiencing a war for talent as they struggle to compete with Valley giants Google, Twitter, and increasingly, companies like Uber and Lyft.

Dave Marsey, managing director at DigitasLBi San Francisco, describes this as an ongoing challenge for San Francisco shops. "You don't have the talent market pressures or competition in markets like New York or Chicago like you do on the West Coast when you have the likes of Twitter, Google, Facebook and Uber just down the block. So when we lose people, we typically lose them to startups, not to other agencies."

These topics and more will be explored further in a report on San Francisco's creative sector, published in The Drum over the next month.

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