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Tuesday, August 29, 2017

Small Ad Agencies vs. Big Ad Agencies: Which Are Better?


I am often asked about small vs larger agencies.  There is no good answer because I can argue out of both sides of my mouth.  However, a couple of things need to be pointed out.

Once upon a time, I used to recommend big agency training and resources.  Today not so much.  There are virtually no training programs and all the senior people are doing all the work, leaving the juniors at the big agencies mostly doing menial and clerical work.  On the opposite side, the huge brands, particularly those that are worldwide remain with the big shops.  But there are other issues.

In terms of people, training and advancement, the reality of today’s advertising world is that if one wants to work at one of the top 15 worldwide ad agencies, movement among them is somewhat limited.  A person working at an IPG agency cannot go directly to another Interpublic agency, which means, for instance, one cannot move from McCann to Deutsch.  Same is true for all the network owned ad agencies; they each preclude employees from moving directly from one of their agencies to another. (Most have a mechanism for moving among - but that assumes that an employee is willing to get permission from their supervisor(s) and has stellar performance reviews.  And even then, this rarely happens for obvious reasons.) This whole policy is nonsense and designed to save money, but  since these agencies often compete with each other for accounts, why not compete for people as well?

However, if you work for a smaller shop, you can go anywhere – if they will have you.  The issue is that ad agencies tend to hire résumés, not people.  If you are lucky enough to work on a major name-brand account at an independent, smaller shop, you may be able to move easily to one of the big agencies.  But even if you work on a highly strategic account, or at a well known smaller creative agency on a regional or little known brand, it is harder to move to a big agency.  (To put it the opposite way, hiring a person who works at  DDB or Y&R is, in the mind of the big shops, a safer hire than hiring someone from an agency that employs sixty people.) The people doing the hiring or screening at bigger agencies may be unfamiliar with these smaller agencies as well as their work. I often meet people who are at the smaller shops or are from out of town who can run circles around their big agency counterparts, but they have trouble being hired. It becomes even more difficult if that smaller agency is in New Jersey, Toledo or San Jose, despite their ability to do great work.

In fact, the irony is that at smaller shops, the people who work there often tend to actually be better trained of necessity.  The big agencies gave up on real training programs years ago.  At some of those agencies, for instance, an account person by policy may not attend a television production shoot until they are at least an account supervisor, which means four or five years in the business.  At smaller agencies, such constraints rarely exist.  

People who come out of the independent shops get exposed to more, do more and get involved in the nitty-gritty of the business much faster.  To tell a quick story, when I went from a smaller agency to a large multi-national as an account executive, one of the first things I was asked to do was to try to resolve a billing issue for a client. Apparently, it had been going on for weeks with no resolution. This is a common task for an account person.  I knew enough to simply go to the billing department;  I the the biller and resolved the issue after a short discussion. My supervisor was amazed.  He actually did not know that there was such a person as a biller. I knew who to go to from working at a small agency.

Not that billing is the be all and end all.  But it is a vital aspect of the business, which I had learned at smaller shops.   At smaller shops, people are more apt to learn the business of the business.

In terms of the work, the principals at smaller agencies tend to be more available to solve problems and issues and to be sure good work gets done.  They are apt to know their people better and can identify and nurture the star performers.
The biggest difference in size is resources.  Big companies have far more of them, which comes from their larger spending brands. At smaller shops, employees often have to figure out how solve problems on their own. Despite this significant advantage, many big companies are reluctant to hire out of smaller agencies, falsely believing that big agency people know more.
The irony is that if you come out of a big, name agency, you are more attractive to smaller, creative shops. The perception is that people who are from big agencies are better trained and more strategic.  Perception is reality. 

Big agencies have advantages in terms of size and resources.  Small agencies can often do better work because they are less bureaucratic.  Neither is right for everyone. 

5 comments:

  1. Your comment about smaller shops providing more of an opportunity "to learn the business of the business" is spot-on.

    Earlier this year, I counseled a recent college graduate who was eager to get into the agency business, and she posed the same "big or small" question to me at the outset of our discussions. While I got my start many moons ago at a division of a big international agency and have no regrets whatsoever about the decision, I honestly could not advise this young woman to take that same path today. The industry has changed dramatically, account volatility is higher than ever, and formalized training programs have essentially vanished. She is now in her third month of an entry-level account management position at a 30-person agency in a second-tier city, and very much "...enjoying the experience of learning the 'nuts and bolts' of agency operations."

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  2. And then there's the spate of smaller shops continuously started up by people from bigger places who are extremely fond of making what you could call the Peter Dinklage case—big brains in a small body. No harm, no foul: It’s a legit argument although the fact that so many of us trot it out hardly makes for the proverbial unique selling proposition. What is? That’s a damned good question—but, for clients, I've always thought it all comes down to being clear about what will work for you, your brand, your organizational structure, and your ability to find and engage talented experts you can and will trust. Hiring an agency is, ultimately, a strategic decision (even if you’re really doing it for tactical reasons). And that argues for a high degree of clarity, going in.

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    1. Thanks for your smart comments. For me, if I were a domestic only brand, I would hire a smart, small agency.

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  3. Although it doesn't apply to most I started my career at a Big Agency ... but overseas, where it was a small shop. This way I got the best of both worlds. But, on a different note: would love to see your thoughts on in-house agencies. As tech wiped out the 'scale' benefit of size you can legitimately build an in-house operation around media (mostly programmatic) studio ops, content creation and similar. Is this the dawn of a new era?

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    1. Peter: I have mixed feelings about in-house agencies. Some work well, others not so well. Depends on how they are set up. In terms of media, the whole concept behind the media agencies is that size matters; don't know how this might apply to an in-house agency unless it has huge billings. If most of the buying is programmatic, that seems to be self-defeating for an in-house shop.

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