Carving out a space for independent agencies

Carving out a space for independent agencies

Scarecrow Communications founder director Raghu Bhat

(4 February 2012)

Mark Zuckerberg started his company when he was 20 years of age and Steve Jobs when he was 22. However, most of the independent agencies in India have been started by guys above the age of 35. Also, a lot of them had already attained professional success in their jobs at network agencies. This means, an independent agency is largely born out of a network agency’s inability to retain its senior creative people. Dissatisfaction in their current working environment has forced them to turn entrepreneurs and start their agencies, rather than the Silicon Valley mindset - the fierce desire to create a multi-million dollar valuation firm in the minimum possible time.

This brings us to the next question? Why are senior creative people unhappy in a network agency? In our viewpoint, there are two big reasons. One is lack of creative freedom or independence. In many cases, the final creative call is taken by a suit. This can stifle creativity and individualism. The other is, lack of compensation proportional to their contribution to the agency. The latter is still negotiable but the former is indispensable for a genuinely talented creative guy to survive.

In an independent agency, the potential of the creative person gets unshackled. His ideas don’t die before they reach the client. For this reason, many independent agencies are doing sparkling work.

We believe that there is loads of creativity in the big network agencies. What they don’t have is a mechanism to ensure that the best ones reach the client. They do good work but the hit rate percentage is lot lesser than the smaller agencies. Independent agencies offer quality creative thinking, flatter structures, quicker response times, personalised attention and lots of passion.

The other big advantage is that in an independent agency, the creative people get to hear the business problem itself, from the horse’s mouth as they get to deal directly with the big decision makers. We believe the brilliance of the creative solution is proportional to the clarity with the business problem is articulated. This puts them in a vantage position to solve it with maximum efficacy.

Creative people get the liberty to present ideas they truly believe in. There are no unnecessary rules, no baggage, no hierarchy. Both agency and the client have only one objective - to solve the problem at hand in the given budget and timeline. This single-mindedness of agenda and purity of purpose is hugely liberating, from a creative standpoint.

The other big differentiator for an independent agency can be the ‘creative culture’. At one level, this is intangible but at another level, it is very real as it is something employees experience on an everyday basis. Culture is the aggregate of the agency’s actions, internally and externally. Most network agencies behave in a similar fashion. They do the same things while dealing with employees and clients. Also a culture is created when most of the people in the organisation believe in the same things. Therefore, it’s easier for an independent agency to carve out its own distinct culture. Doing so will help it become a talent magnet and lead to a happy productive workplace.

Admittedly, there are many challenges too. Some of the them are not very different from those faced by a network agency. For example, the ability of an independent agency to grow depends on their ability to attract top talent, at the senior and junior levels. They have to manage finances well. A weakened economic sentiment, the prospect of Europe being in recession for 5-10 years and a bearish stock market might mean lower marketing spends by Indian companies. This could hit the agency’s capacity to invest in people as they aren’t sitting on huge cash reserves.

The independent agency also has to ensure it doesn’t become a victim of stereotyping. Based on a hi-profile campaign, an independent agency can quickly acquire a reputation for specialisation, without even realising it. In India too, there are independents who are known as ‘lifestyle’ agencies or ‘mass FMCG type’ agencies. While the agency may have the capability to handle different products across diverse audiences, they can still lose out, as the perception might overpower reality. The best way to counter this is to aggressively showcase work across categories and acquire a varied portfolio as fast as possible.

One of the accusations against independent agencies is that they are creative boutiques, dependent solely on a pair of creative people. They may not be seen as ‘organisations’. Their capacity to deliver integrated solutions or handle big businesses is sometimes questioned. Bandwidth can become an issue. Some of them may not have the ability to hire great account planners. This is a reality that the agency heads have to face.

To deal with this, they should craft out a short term and long term strategy. It’s important to have one eye on the present without losing sight of the future. A conscious attempt should be made to expand the bouquet of communication offerings. The independent agency should be on the lookout to develop expertise in related areas like design, digital, strategy, retail, rural marketing and healthcare. This will make the agency less vulnerable to recessionary trends.

Moreover, it will accelerate the learning curve and ensure that the agency heads aren’t caught up in attending to just the short-term contingencies. In case the agency head plans to sell off his agency after a few years, this will also help in the valuation. It’s also important to plough back some money into making a decent office as that’s where people spend 10-12 hours every day.

Ultimately, the independent agencies will co-exist with the large network agencies. There will be ample opportunities for both. The Indian economy is a domestic consumption story and we expect that growth will happen at a steady if not spectacular rate. The creative people who will enjoy embrace the added responsibilities (Cash flow, staffing, client management, accounting) of running the independent agency, along with the creative tasks, are the ones who will stick it out. The creative guys who want to concentrate only on doing creative work will be tempted to sell out.

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