Are we losing creativity and innovation because of the big all-conquering marketing networks?
As marketing giant WPP swallows up yet another independent agency, are the independents' days numbered? Steve Antoniewicz, managing director of the Recommended Agency Register, ponders the question.
As today is the 4th of July, it seemed an appropriate time to write about independence. But not about the land of the free or even about Scottish independence - but about agency independence.
With agencies such as AKQA being swallowed up by WPP for the eye-watering sum of £340m, just what is the role of the independent agency these days?
Creative, media, PR, digital and BTL services are all dominated by the big network agencies. There are fewer and fewer independents of any scale in any of the main marketing services and it doesn't look like it will change any time soon. Consolidation, merger and acquisition means a constant reduction of the pool.
When I wrote recently about delivery vs creativity, I made comparisons between agencies and grocery brands. Now bear with me as I make some more.
In the eighties the big supermarkets began their very aggressive growth, building scale by consolidating, expanding and acquiring. Soon afterwards, the impact on small independent traders became clear. The green grocer, the butcher, the milk man and the baker would all have to get used to the competition.
But course, as we now know they could not compete.
Customers lured by the master merchants with their easy commodities, their promises of new brands at cheaper prices, late night shopping (and of course free parking), deserted in droves. Inevitablably many of these long established, small, specialist businesses had to close.
Over time this led to a lack of new independent shops opening up to stimulate the consumer and provide choice. Who could argue that today most high streets are poorer? Or that we've lost a sense of localness and community in our retail sector? Or that the craft skills, individuality and diversity that came from our smaller retail traders are disappearing?
So is this same supermarket dynamic at play in the world of advertising and marketing agencies? Are independent, specialist agencies really in decline? Well certainly there are a few big players who dominate.
Interpublic, WPP and Havas compete for their share of their customers marketing wallets in the same way that Tesco, Sainsburys or Morrisons compete for a share of ours.
The networks behave like the big retailers in many other ways too: providing a range of (agency) brands across multiple categories; offering volume discount deals; promoting and competing aggressively; acquiring and redeploying independent competitors in new locations or categories.
So are the consequences the same? Is there now a real lack of choice in the agency market? Are the services becoming commoditised? Are we losing creativity and innovation because of the big all-conquering networks? Maybe. What is for sure that growing and sustaining a successful independent agency is a whole lot harder than it used to be.
That's why I was so encouraged by our recent report on independent agencies based in London. Though they may be smaller in number many are running hugely successful businesses, achieving, growth and scale, winning customers and importantly making profit. All this despite a fiercely competitive environment, dominated by bigger, more powerful opponents and in an economy in recession.
Now I'm off to think more about networks but for today at least, independents’ day is well worth celebrating.
A full copy of the Report on the top 50 independent agencies in London is available on the Recommended Agency Register website.