To kick off the New Year, I wanted to post a few interesting charts from our strategic partner, Second Wind Online. Their last Newsletter of 2009 (see link at bottom) had a great piece called The Small + Smart Agency Model. The author, Second Wind’s Tony Mikes, quotes Jim Hughes, of The Brand Establishment, throughout the piece and discusses "the old agency model." I encourage you to download the article, but wanted to focus on the two charts I mentioned earlier.
That’s the “tail-end in every seat” model where agencies worked hard to build their internal resources so they could be viewed as “full service” by their clients and prospects.
“The days of small agencies trying to operate like large shops are over,” says Jim. “But, the days of larger agencies operating as they have in the past areover as well.”
Today, marketers want capable marketing partners, BUT they don’t
want the fat agency overhead.” So… what IS the new agency structure that offers
clients all the capability without the overhead?
This is the key to the future of your smaller agency. You are structured
just as competently as any larger agency, but don’t have the overhead.
There’s obviously some room for argument here in regards to larger agencies and the changes ahead, but in regards to smaller agencies, of which we work with quite a few, we’ve already seen this smart + small structure put into place. 2010 will be interesting indeed.
UPDATE: Just goes to show that you've always got to do your detective work. Second Wind's newsletter was initially available to members only, so they've been kind enough to post Tony's original piece in its entirety here and will also be holding a one-day seminar on how to move your agency to the Small + Smart Agency Model on February 9 in Las Vegas. Click here for more info on the seminar, should be some great information as always.
Thanks to the folks at Second Wind for the piece.
15 Responses to “The Future, Where Small Agencies Compete with Any Agency (Updated)”
Lee, as a Second Wind member, I agree with Tony's approach and your assessment. In the past year our company purchased a Web design and Internet marketing company and have started outsourcing some aspects of our traditional work. That helped us maintain our financial position in 2009 and looks to help improve it in 2010. I'm a fan of Second Wind and RSW/US.
Jim Thebeau
CEO Henry Russell Bruce
Thanks for the link love, Lee. Since the newsletter is available only to members, we've made the article available to the public. Click here to read Tony's original comments: http://www.secondwindonline.com/knowledge_display.asp?id=14032
Also, we'll be holding a one-day seminar on how to move your agency to the Small + Smart Agency Model on February 9 in Las Vegas. Learn more here: http://www.secondwindonline.com/seminar_details.asp?semid=13986
Thanks for the link love, Lee. Since the newsletter is available only to members, we've made the article available to the public. Click here to read Tony's original comments: The Small + Smart Agency Model
Also, we'll be holding a one-day seminar on how to move your agency to the Small + Smart Agency Model on February 9 in Las Vegas. Learn more.
Thanks so much Deborah, this is great. Sorry for any confusion, but glad the article is available on the site now; it looks to be the way things are headed for smaller agencies certainly. The upheaval for certain agencies has undoubtedly been incredibly difficult, but we're also seeing a lot of positivity come out on the other end.
Thanks so much for your comment Jim. What will be interesting to see is the permanence of the trend. Will we ever see the staffing up agencies once had or will it be the lean and mean route for the foreseeable future? And if so, is that necessarily a bad thing?
We made the move from traditional agency structure to a 5-partner creative consultancy on September 1st. It was a big step, but one we are happy we made. Interesting to read Tony's article.
You are right on the money with your "agency of the future" structure. Literally. While consulting in business development with a 20-person agency in Atlanta two years ago, your diagram is exactly - and I mean exactly, kinda eerie - what I drew up for 3 new business presentations, all including at least one significantly larger agency. We won all 3 pitches. When prospects are enlightened about the evolution of large agencies - through acquisition of specialty agencies, which remain separate profit centers with their executives compensated on revenue - and how this structure makes objectivity impossible when allocating resources as part of an integrated marketing effort - then it's like a light bulb goes off. If the large agency makes the mistake of not centralizing account management so the client needs to make more than one phone call to coordinate activities, it's all over. This new model isn't quite as effective for enormous accounts, where the client is accustomed to hiring a variety of specialty agencies. But it easily works for more than 90% of accounts, particularly in secondary - but still large - markets for one-office, local agencies competing against the branch office of a multi-national shop. It's truly a giant killer. The catch is that the smaller agency must have a single point of client contact (i.e. an account director) who is savvy in all marketing disciplines, a true integrated marketer - these people aren't so easy to come by, particularly younger AE's with both online and offline experience (I've found them most often to have background in design firms, fyi.) I believe the next step after widespread adoption of this model will be "custom agencies", built from scratch around an account after the fact and established as a separate profit center. But that's fodder for another post!
Thanks for the comment Cathy and sorry for the late reply. It's a huge step to take and impressive. Would love to hear more about the transition, perhaps a guest post in the future?
Marketing Psychic (love that name) thanks for the great comment, wow. Some key perspective and if you're amenable, would love to incorporate some of it into a future post. Appreciate you checking out the blog.
Lee, in another move toward turning our agency into a consulting firm, we this week started offering true strategic planning to address client business/marketing issues. We hired a person who established and sold a very profitable strategic planning firm and we've already made two presentations. A bit of a different approach, but clients see immediate value, even during the pitch.
Thanks again Jim, we're really liking your comments on the agency progression. Please keep them coming.
Lee--just saw your request via Mark's post today. I'd be happy to guest blog. Teresa and I presented at Tony's Small + Smart seminar in Vegas (Second Wind, of course) to quite a receptive audience. We've learned a lot since launching in August and I am happy to share.
Hi Cathy,
Thanks for the comment. That would be fantastic, we'd love to read/see it!
Hi again - Just to update everyone, Jim Hughes of The Brand Establishment actually says that the Small+Smart Agency can consist of just a few core people (owners and perhaps a few account managers) and EVERYTHING ELSE can be outsourced. This is a truly radical structural shift for most agencies, but we have seen a few move to this kind of model and succeed. Whether all clients will be happy working with a group that consists of just owners and AEs remains to be seen. It is all in how you sell it... and probably in how much they can save in billings.
Good to hear from you again Deborah and appreciate the insight, as ever. We're looking forward to hearing more about Small + Smart seminar as well.
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