2021: The Year Of The Independent Agency

By Jonathan Leech, Commercial Director, The Kite Factory

Agencies of all shapes and sizes were disrupted as the pandemic plunged our industry into the unpredicted territory. And while the experience has been humbling for us all, I’d argue it has gone a long way to showcase the strengths of the independent agency model and how they work with their partners.

Independent agencies can react at speed – free from the constraints of group networks or shareholders – as the masters and mistresses of their own future they can adapt more quickly than most, making decisions without red tape and putting measures in place to not only safeguard the agency as a business but also the team within it. A starkly different picture is apparent when looking into how the networks have handled such situations, with group-wide decisions that have directly impacted all member agencies.

On top of the furloughs and redundancies that swept through the industry at the start of the pandemic, networks are also consolidating within their own groups, leaving clients with new teams they haven’t necessarily chosen and without the key specialism that attracted them to the network agency in the first place. Just this year Havas Media retired its Arena Media brand and absorbed it into the wider company; Dentsu Aegis consolidated the Vizeum brand and merged it into I-Prospect. These follow the post-Brexit wave of consolidations when Rocket and M2M were dissolved by Omnicom back in 2018, replaced instead by Hearts and Science. As well as MEC and Maxus forming Wavemaker back in 2017.

Free from network bureaucracy, independent agencies could ensure that any actions taken in response to the pandemic, such as furloughs or redundancies, were appropriately constrained and didn’t impact the day-to-day operations of the business. Which makes them better able to maintain their specialism and key skillsets and less likely to become homogenised as resources are squeezed.

Independents are far better placed than many to react to the impact of the pandemic, supporting partners and clients alike with bespoke strategies to both weathers the storm and navigate out of it – while successfully maintaining sufficient levels of service that clients have become accustomed to.

Our investment team worked relentlessly to put measures in place, ensuring any campaign cancellations or deferrals were managed penalty-free and significant over-deliveries were written off across the board between March and June – which effectively drove an additional 20-30% of free added media value on behalf of our clients.

With suppliers desperate to stabilise revenue as the ad market disintegrated, pricing has been squeezed to record levels – and in most cases, there is now effectively a zero gap between networks and indies.

With the push to generate revenue, we have seen network agencies follow our lead and start to offer many of the trading benefits that clients receive as standard when partnered with an independent. These might include tailored station delivery, late and flexible booking deadlines, additional creative support and increased in-month optimisation capacity.

This is important and clients must remain conscious of not becoming accustomed to having such benefits in the foreseeable future. Suppliers are not set up logistically to service networks in this manner long-term, and as the world returns to some sense of normality, many of these benefits and flexible booking conditions will be stripped away from the networks once again.

At that point, clients will have to ask themselves a simple question. With weakened teams, market average pricing and limited flexibility, what are the benefits of partnering with a network, over an independent?