Small and medium sized agencies have always represented an interesting alternative to the big brands. Now they have a refreshed value proposition. This study can help any agency build their brand.

1. hello

2. Big
Value:
A
Study
of
Small
&
Medium
Sized
Adver8sing
Agencies
Ins)tute
of
Communica)ons
Agencies
Forum
of
Independent
Agencies

3. Background
Private
equity
client
Mini
–
holding
companies
New
value
proposi)on
Interes)ng
)mes

4. "Our
thesis
is
that
pre-­‐
and
post-­‐
the
Omnicom-­‐Publicis
merger
and
lack
of
comple)on,
there's
a
real
opportunity
to
create
a
middle-­‐
market
player
in
the
space.”
Lake
Capital
co-­‐founder
Terry
Graunke
said
as
the
company
bought
Engine,
defining
mid-­‐market
as
an
opera)on
with
revenue
from
$500
million
to
$2
billion.
Project
Worldwide,
the
30th
largest
agency
holding
company
announces
its
latest
acquisi)on,
Pitch

5. We
surveyed
850
agencies
online
receiving
502
responses.
The
25
ques)on
survey
was
completed
by
agency
owners,
leaders
and
senior
execu)ves
in
the
United
States.
Responses
Employee
Size
109
1-­‐10
323
11-­‐75
70
76-­‐150
Telephone
interviews
were
carried
out
with
willing
par)cipants
post
survey.
The
report
referenced
secondary
research.
Adver)sing
Inspira)on
Board
2

6. 3
Contents
Sec)on
1:
Advantages
|
Disadvantages
Sec)on
2:
Challenges
|
Opportuni)es
Sec)on
3:
The
Big
Learning
Sec)on
4:
Insights
Sec)on
5:
In
Conclusion

7. Sec)on
1:
Advantages
|
Disadvantages

8. Top
5
Reasons
Clients
Choose
Small
to
Medium
Sized
Agencies
5

9. Top
5
Reasons
Clients
Choose
Small
to
Medium
Sized
Agencies
1. Responsiveness
2. Client
care
3. Agility
4. Content
over
crea)ve
5. Willingness
to
build
the
business
around
them
5

10. Associated
comments
from
survey
par)cipants
“Most
of
our
clients
and
prospects
claim
that
size
doesn’t
mafer
then
they
ask
us
about
how
many
offices
we
have,
total
number
of
staff
and
more.
But,
if
we
win,
we
win
based
on
the
quality
of
our
ideas
and
the
chemistry
we
create.
Not
dots
on
a
map.”
“We
become
defacto
employees
of
our
clients
without
losing
our
objec)vity.
It
may
sound
old
school
but
we
know
each
other’s
kids
birthdays,
support
each
other’s
chari)es.
We
invest
in
the
rela)onship
and
that
is
appreciated
and
valued.”
“In
my
twenty
year
career
I
have
never
worked
for
a
giant
agency
but
the
one
consistent
thing
I
have
heard
from
clients
who
have
worked
with
all
sizes
is
that
inevitably
the
big
guys
will
let
you
down
in
service.
Small
fries
cannot
let
that
happen
given
the
client
poriolio.”
6

11. Top
5
Reasons
Clients
Do
Not
Choose
Small
to
Medium
Sized
Agencies
7

12. Top
5
Reasons
Clients
Do
Not
Choose
Small
to
Medium
Sized
Agencies
1. Ability
to
stay
on
top
of
trends
2. Research
and
analy)cs
depth
3. Proving
return-­‐on-­‐investment
4. Geographic
reach
5. Resource
scalability
7

13. Associated
comments
from
survey
par)cipants
“There
is
no
way
we
can
claim
that
we
do
the
full
soup
to
nuts
when
there
are
nine
people
in
our
agency.
Anyone
who
tries
that
is
flir)ng
with
disaster.
Like
any
business,
smaller
agencies
have
to
ride
a
credible
point
of
difference.”
“Clients
are
way
more
sophis)cated
now
than
even
five
years
ago.
This
is
saving
everyone
)me
and
money
in
the
client
courtship
and
servicing.
Expecta)ons
set
at
the
beginning
make
for
a
happier,
longer
and
more
produc)ve
rela)onship.”
“We
love
to
compete
and
we
love
to
delight.
We
don’t
care
who
we
come
up
against.
We
will
put
our
ideas
up
against
anyone’s
and
we
will
be
clear
on
how
we
can
crea)vely
execute
through
partnerships
and
other
ways
to
be
big
without
charging
big.”
8

14. Sec)on
2:
Challenges
|
Opportuni)es

15. Top
Challenges
Facing
Small
to
Medium
Sized
Agencies
10

16. Top
Challenges
Facing
Small
to
Medium
Sized
Agencies
1. Staying
on
the
cukng
edge
of
technology
2. Inves)ng
for
growth
3. Balancing
new
business
with
service
4. Afrac)ng
the
afen)on
of
agency
search
consultants
5. Overcoming
the
“generalist”
s)gma
6. Compe)ng
with
larger
agencies
7. Client
success
(they
get
big
–
they
go
to
a
bigger
agency)
10

17. Associated
comments
from
survey
par)cipants
“I
onen
think
we
are
our
own
worst
enemies.
We
allow
ourselves
to
be
measured
and
compared
against
bigger
players.
The
reality
is
our
work
is
first-­‐rate,
our
clients
happy
and
profitable,
and
our
margins
are
awesome.
We
should
be
the
benchmark.”
“We
are
s)ll
having
to
tell
prospec)ve
clients
that
we
do
a
lot
more
than
tradi)onal
stuff
for
the
local
car
dealership
or
chain
of
drycleaners.
We
are
forty
people
in
one
office
and
have
been
working
with
a
European
retailer
based
in
Paris
and
a
South
American
liquor
company.
It
is
frustra)ng.”
“Big
or
small,
whatever.
We
are
both
in
a
vola)le
and
fickle
industry.
It
is
a
jaded
category.
We
all
take
risks
but
the
one
difference
I
have
noted
is
my
bets
are
huge.
Dumb,
poor
bets
by
the
big
boys
can
be
distributed
or
absorbed.”
11

18. Top
Opportuni)es
Facing
Small
to
Medium
Sized
Agencies
12

19. Top
Opportuni)es
Facing
Small
to
Medium
Sized
Agencies
1. Leveraging
agility
and
flexibility
2. Culture
suppor)ve
of
risk
taking
3. Select
consolida)on
that
actually
benefits
clients
4. Afrac)ng
talent
craving
a
collegial
culture
5. Finding
an
afrac)ve
niche
6. Transla)ng
passion
into
profit
7. Featuring
senior
level
afen)on
to
clients
12

20. Associated
comments
from
survey
par)cipants
“We
are
new
idea
incubators.
We
just
need
to
find
a
way
to
mone)ze
it
more.
I
see
bold
collabora)ons
with
clients
in
the
future
where
we
build
businesses
together.”
“Do
you
want
to
bust
your
ass
in
NYC
or
San
Fran
for
long
hours,
a
compe))ve
paycheque
and
the
promise
that
one
day
you
will
be
unceremoniously
dumped
by
people
less
talented
than
you?
Or
do
you
want
a
forty
hour
work
week,
challenging
work
on
cool
clients,
and
more
say
in
your
des)ny?”
“We
will
buy,
we
will
combine,
we
will
grow
but
I
am
scared
that
we
will
sacrifice
a
bunch
of
our
special
sauce
along
the
way.
At
some
point
in
business
we
confused
bigger
with
befer
and
that
ends
up
leading
to
the
same
bowl
of
slop.”
13

21. Sec)on
3:
The
Big
Learning

22. The
debate
has
become
boring…..
Historically,
the
small
versus
large
debate
has
had
two
primary
threads.
Small
to
medium
sized
agencies
have
been
characterized
as
faster,
more
nimble
and
lower
in
cost.
Larger
agencies
were
seen
to
be
safe,
possessing
broader
services
and
geographic
advantage
but
were
slow
and
expensive.
How
uBerly
boring.
The
debate
should
focus
on
smarts,
crea)vity,
ingenuity
and
the
ability
to
conceptualize
and
deliver
big
ideas.
Not
to
men)on
the
intangibles
of
rela)onship
chemistry
and
tangibles
of
claimable
results.
15

23. The
value
proposi)on
has
changed…..
This
research
reveals
a
three
altera)ons
in
the
debate.
First,
crea8ve
quality
has
greatly
improved
in
percep)on
and
reality
in
small
to
medium
agencies.
Next
is
a
shiG
in
focus
to
content
crea8on
versus
crea)ve
for
crea)ve
sake.
This
is
afributed
to
the
in)macy
small
and
medium
agencies
enjoy
with
their
clients.
These
two
developments
coupled
with
the
longstanding
advantage
held
by
smaller
agencies
when
it
comes
to
client
service
and
the
whole
value
proposi)on
has
changed.
This
is
substan)ated
because
price
is
talked
about
less.
Clients
prize
quality
and
are
willing
to
pay
whoever
provides
differen)ated
value.
16

24. Sec)on
4:
Insights

25. Insight
One
No
Longer
Generalists
The
percep)on
that
small
to
medium
sized
agencies
will
do
whatever
work
comes
in
the
door,
that
they
only
do
tradi)onal
adver)sing
and
that
they
play
it
safe
is
fading.
These
agencies
are
specializing
more
and
more.
They
are
focusing
on
depth
in
industry,
in
service
and
in
medium.
This
is
nuanced
as
becoming
too
specific
s)ll
can
result
in
missed
opportuni)es
but
they
realize
pretending
to
be
something
to
everyone
is
inauthen)c
and
unsustainable.
VS.
18

26. Insight
Two
Too
Much
Me
Too
Swystun
Communica)ons
works
extensively
with
professional
services
including
adver)sing
agencies.
If
there
ever
was
an
irony
in
the
business
world
it
is
how
poorly
these
agencies
are
at
differen)a)ng
themselves.
Mike
Fromowitz,
President
and
Chief
Brand
Officer,
Mantra
Partners
contends,
“Commodi)za)on
may
be
the
biggest
threat
facing
ad
agencies
today,
and
yet
we
hear
precious
lifle
about
it,
and
few
are
taking
strategic
ac)on
to
combat
it.”
Small
to
medium
sized
agencies
need
to
get
befer
at
their
own
branding.
The
vast
majority
seem
to
encapsulate
their
difference
in
the
same
vague
claim,
“Big
agency
exper)se
with
bou)que
service
quality.”
19

27. Insight
Three
Loyalty
Rules
20
Big,
medium
or
small
agencies
all
want
to
hold
onto
a
client.
The
same
goes
for
acquiring
new
clients.
Yet,
there
is
a
nuance
claimed
by
small
and
medium
agencies.
They
believe
that
a
sale
is
something
that
happens
when
your
are
already
deeply
immersed
in
serving
the
client
and
that
new
business
is
not
a
one
)me
event.
This
focus
on
service
has
been
a
longstanding
differen)ator
for
smaller
agencies
and
it
has
manifested
itself
in
a
culture
of
nurturing
client
rela)onships
for
the
long
term.

28. Insight
Four
Not
Credited
with
Innova)on
Long
accused
of
being
followers
and
emulators
of
larger
agencies,
increasingly
small
and
medium
agencies
are
proving
to
be
hotbeds
of
innova)on.
These
agencies
are
adept
at
turning
client
requests
into
new
lines
of
business,
and
trends
into
revenue,
yet
s)ll
suffer
from
a
percep)on
of
only
offering
tradi)onal
services.
21

29. Insight
Five
Where
We
Are
Heading
22
Survey
respondents
and
interview
par)cipants
were
largely
in
agreement
that
the
status
quo
was
not
an
op)on.
Small
and
medium
agency
leaders
iden)fied
two
growing
op)ons
for
survival
and
growth.
The
first
is
to
assume
the
role
of
valued
“General
Contractor”
whereby
they
act
at
the
center
of
a
hub
of
different
agencies
that
delivers
on
a
range
of
services
to
clients.
The
other
development
is
not
new
but
is
taking
new
forms
and
that
is
consolida)on.
This
presents
an
irony
as
combining
for
size
takes
away
from
what
made
these
agencies
successful
in
the
first
place.
S)ll,
new
models
of
any
shape
and
size
may
be
just
what
are
needed.
As
John
Winsor,
Chief
Innova)on
Officer
at
Havas,
points
out,
“Agencies
are
typically
closed
systems
that
are
being
challenged
by
open
systems
and
an
open
way
of
doing
things”.

30. Sec)on
5:
In
Conclusion

31. Owners
and
leaders
of
smaller
agencies
are
bullish
on
their
future.
They
are
recognizing
the
change
in
the
value
proposi)on
but
need
to
crea)vely
rebrand
to
take
advantage.
Size
of
agencies
will
always
be
a
considera)on
but
new
models
that
deliver
scale
without
comprising
quality
and
cost
present
the
greatest
opportuni)es
to
compete.
23

32. Get
In
Touch

33. We
invite
you
to
get
in
touch
to
discuss
your
strategy
and
branding
&
marke)ng.
We
also
assist
startups
and
ambi)ous
businesses
to
get
to
the
next
level.
This
involves
venture
capital,
private
equity,
joint-­‐ventures,
acquisi)ons
&
dives)tures.
Needless
to
say
businesses
with
strong
brands
have
much
more
leverage
in
any
transac)on.
Lets
have
a
chat.
416.471.4655.
25