Larry A. Meltzer, Agency Principal
It’s the time of year when the agency holding companies officially put the previous financial year to bed, and the industry media compile their annual agency rankings. As a long-time veteran of the agency business, what strikes me every year is the way the descriptions of agencies have changed over the years – and this is true for both large and small agencies.
A scroll through the rankings – or indeed, an agency’s website – reveals prominent mentions of size (in terms of billings) and awards, as if size and awards are the best indicator of quality or fit for a client. What happened to pride of work? I suspect much of this is driven by the holding company model – holding companies, after all, are about maximizing the value of their portfolio of companies.
My own career has taken me through the doorways and hallways of agencies of all sizes, from largest-in-the-world and on down to the boutique agency that I now lead. If I had to distill down what I’ve learned about the pros and cons of big and small, I’d point to these five truths:
There’s a place for big, and there’s a sweet spot for small. Big agencies do a great job with big clients. They’re structured to serve the broad needs of the multinationals that aren’t particularly price sensitive. But as the big agencies have grown bigger, and their cost structures size them out of certain assignments, there has been a clearer bifurcation of the market, delineating a real sweet spot for small agencies – not just in terms of company size or budget, but in terms of the type of senior-level talent and attention that really lives the client’s business in a way that a big agency can’t match.
To get to the soul of an agency, ask them to describe it. Big agencies are proud of their size, and that tends to be the fallback description, along with awards. But most clients with whom I’ve worked over the years are more interested in what we’ve done for them, rather than the accolades we’ve received or the billings we’ve racked up. Small agencies, however, because they can’t fall back on size, tend to describe the work they do, and the results they’ve delivered for clients.
Big agencies are like accounting firms; small agencies are like investment firms. Every business need to generate a certain return to exist, but the big agencies for which I’ve worked have been like accounting firms, driven by the numbers rather than by delivering good work. Small agencies, on the other hand, are like investment firms, with the investment in this case being the clients and the people. Since there’s more at stake in a client relationship for a small agency, they tend to over-index on client service and the focus on results.
Big agencies give you access to talent; small agencies give you a talented team. True, big agencies have a deeper bench of talent across the network, which, of course, comes with a cost. Clients can tap into and out of this talent based on need. Small agencies, on the other hand, provide access to a talented team on a full-time basis. There can be a greater personal and professional integration between agency and client teams, with both focused on delivering great results.
Big agencies will sell you what they have; small agencies will sell you what you need. It stands to reason: If you have a lemonade stand, you’ll sell lemonade. In the same way, big agency employees are trained to sell what the agency offers, sometimes trying to fit the proverbial square peg in the round hole. They want to keep the revenue within their four walls. Small agencies, however, typically take a best-of-breed approach, and assemble the resources appropriate to the client need, agnostic of the source.
It’s a big world filled with big and small agencies and big and small clients. At the end of the day, an agency is best judged not by its size, but by the size of its ideas and the size of the results it can deliver for clients.