Last week, after a grueling (albeit incredibly fun) evaluation process, we published our latest Magic Quadrant for Global Digital Marketing Agencies. While the research focuses on 21 of the largest global agencies, it became apparent that independent and boutique agencies are playing an increasingly important role in supporting marketers of all sizes.
The innovation and agility smaller agencies deliver is something the big holding companies should look to – not to feed their appetites for acquisition, but from which to draw inspiration.
Indeed, although many of our clients use the Magic Quadrant as a starting point in their agency searches, we know that not every marketer can, or wants to play with the big boys. Enter independent and boutique agencies, agencies that focus on specific industry verticals, like healthcare, or those that work exclusively in the BtoB space.
These agencies are well positioned to capitalize on marketers’ needs for agility. In our Magic Quadrant research, we speak to dozens of big agency clients, and where they lauded their agencies, words like “flexible”, “collaborative” and “responsive” were common superlatives. Conversely, where issues were reported, they often centered on lumbering, inflexible process and a lack of collaboration.
Smaller agencies can operate outside of holding company and global network constraints. As Kristin Lovelady, Director of Client Services at Garrigan Lyman Group, an independent agency based in Seattle and New York, says “independent agencies possess the ability to make or change processes to benefit their clients’ business. They answer to no one but themselves and their clients.”
Doesn’t this empowerment come at the cost of capability? Certainly, for an enterprise global marketer, a large global agency partner makes a lot of sense. With increasing investment in technology and business consulting capabilities, many of our Magic Quadrant Leaders, Challengers, Visionaries, and Niche Players can offer a wide range of services. As the CMO organization is increasingly tasked with digital commerce and customer experience initiatives, that big agency heft is appealing. The work we saw from the agencies we profiled was impressive, delivering transformative business strategy combined with innovative and compelling creative work delivered on a solid foundation of technology.
But independents can offer surprising depth of services too, without the risk of silos. Matt Goddard, CEO of independent R2integrated, notes that at large agencies “demand to hit certain margins and cross-office politics over revenue ownership causes confusion and frustration for the client. As an independent agency, we are able to go the extra mile in providing holistic integrated solutions rather than take shortcuts to hit our numbers.”
As marketing technologies change rapidly, as CMO priorities shift, as the customer experience takes center stage, agency partners, regardless of size, need to be agile enough to adapt on the fly. This can be challenging for all but the best of the large agency networks. Indeed, as Group M’s Rob Norman said last week, agency networks have focused on “plumbing over poetry” – and while plumbing is certainly critical in keeping a large agency network running efficiently, and connecting those silos, cracks in those pipes are starting to show. PepsiCo’s Brad Jakeman sounded the alarm last fall when he said that the existing agency model wasn’t just going to bend, it could break.
For some less agile global agency networks, the model will break. And the agency landscape continues to shift, as marketers move away from AOR models to rosters of agencies, consultants, and tech firms to meet their needs, independent agencies will see their appeal increase in coming years.
This week’s analyst picks and headlines for Gartner clients focus on the amorphous agency market, and I invite all of you to join Jennifer Polk and me for a free webinar on the new Magic Quadrant next Wednesday, April 6th.