Why Small Agencies Have a Big Role to Play

In the cut-throat world of advertising, David is taking on Goliath. Small advertising agencies are defying the odds, gaining traction in the industry and challenging the dominance of their larger peers.

With a nimble and often more innovative approach, these small shops are disrupting the traditional advertising landscape through agility, creativity and mostly a more personalised touch.

Dean Oelschig, MD of the boutique Halo agency, believes the work-from-home regimen caused by Covid was the catalyst.

“Pre-Covid there was a need for offices and boardrooms and big client service teams. Now even the biggest brands do not mind a team sitting at home in their dressing gown. They are more worried about the calibre of the people and the quality of the work.”

Writing in the trade publication Drum, Roland Gurney, founder of agency-positioning specialist shop Treacle, says: “Large brands are having their heads turned by smaller shops without the bulk and bureaucracy. Rather than relying on the same five faces in every pitch, some brands are actively seeking out leaner agencies: wild cards, weird little outfits, creative collectives, and remote-working crews who offer something different.”

Shelley-Ann Atkinson, CEO of independent brand specialist agency Murmur, tells the FM: “When it comes to personalised attention, an advantage of being small means that clients get to work with experienced senior specialists, not just at pitch time but throughout the lifespan of an account. This direct line of communication gives small agencies the agility to … adapt quickly. Problems or issues can be diagnosed and addressed in the most effective and efficient ways possible. It also means that the entire agency, not just those dedicated to a specific project, are incentivised to develop a deep understanding of the client and their business.”

Oelschig agrees, saying the way small agencies operate is key. “Every client who works with our agency works with the most senior people without silos. Our team structure is flat, so every project receives the best fit-for-purpose team on that job, which leads to better team integration, better subject matter comprehension, better service, better work and better results.”

He takes a little umbrage, though, at the descriptor “small”. “Small agency does not mean smaller ideas or smaller solutions. In the restaurant world, smaller, independent, and niche fine-dining establishments would outperform a big diner every day. I believe this to be true at creative shops too.”

Atkinson says larger agencies often face obstacles in being agile and adaptable because of the many layers of hierarchy, processes and established systems they have in place. She says they must navigate complex approval processes, gain buy-in from multiple stakeholders and allocate resources across various departments, which can slow down decision-making and implementation. Additionally, the fear of failure at an employee level and the pressure to maintain their reputation and brand image at a management level can sometimes discourage experimentation and innovation.

She adds, however, that large agencies understand these dynamics, and it does not mean they do not innovate. To mitigate risk, they often look for innovative solutions that they can first test and then insource through acquisition. This, she says, comes at a cost.

Conversely, with smaller budgets and fewer staff, small agencies have no choice, she says, but to be strategic and innovative to compete with larger, more established firms.

“This means that we can experiment with new ideas, methods and technologies with much less bureaucratic red tape.”

Gurney says many micro-agencies offer just one single specialism from the array of services a full-service agency offers. “Positioning by niche helps brands see you as an expert in the specific thing they need.”

He also says with smaller agencies there is a sense of “real-world collaboration that’s hard to replicate at scale”.

Atkinson agrees with this assessment. “Smaller agencies are inherently more agile, as they must quickly react to changes in the industry and sudden socioeconomic shifts that could lead to the agency’s demise.

“Additionally, smaller agencies have the opportunity to grow with their clients. As clients evolve and expand, so do the small [agencies] collaborating with them to achieve their needs.”

So should bigger agencies fear micro-agencies as the landscape shifts? No, says Gurney. “Many micro-agencies partner with bigger agencies, plugging in when needed in either a white-label or partnership model. While they are well positioned to win tactical and executional pieces of work, they are unlikely to be in huge pitches for huge global oversight projects. If anything, their role is to keep pushing the envelope and to challenge the agencies above them, keeping them sharp, responsive and agile.”

This piece originally appeared in the Financial Mail.