On mushrooming of independent agencies over the last decade, let’s encapsulate the highs and lows, the learnings and the way forward for them.
The start-up trend of independent agencies began in the year 2009 and the one agency that really got everyone’s attention was Taproot. It created waves for its work on Airtel, Pepsi, BCCL; and in my opinion, it was the first independent agency that sowed the entrepreneurial seeds in many creative minds. The entire advertising fraternity stood up and started to take notice, and the question on everyone’s lips was — “If these guys can start and do so well, win big brands and bring home recognition and awards, then why can’t we?” The idea went into an acceleration mode from there and over the last five-six years, many senior advertising fraternity folks, bitten by the start-up bug, have joined the growing club of communication entrepreneurs.
The birth of the independents
Thus were born the independents, who started their own creative hotshops, film production companies and of course, digital agencies. The biggest high of an independent agency is starting off on Day One with that unfettered feeling of being accountable only to oneself. The feeling of being unchained with far more creative freedom and the flexibility to work with any partner of your choice is intoxicating in the beginning. The most important feeling undoubtedly is that ‘your agency is your band of brothers and sisters’.
With great power, comes great responsibility
With more creative freedom, comes the responsibility of doing great work and preferably on big brands. Clients on the other hand are increasingly opening up to the idea of working with multiple creative houses and more often than not, believe that the 100% attention that independent agencies provide is usually a better bet. Companies that have started up normally do have an emotional disposition to someone of their own tribe, who understand the pain, trials and tribulations of the ‘start- up syndrome’.
You must genuinely love what you are doing because starting on your own hardly results in overnight success. It is easy to start, but how do you sustain the business and how do you make it profitable?
Not just a salesman’s job
Never start something with the intent to sell! Have a clear definitive USP that differentiates you from the ‘also ran’ or your competitors. I know I might sound strange but never start something for the love of it or that clichéd statement about ‘chasing dreams’; it hardly ever works! Be familiar with the business of numbers. Revenues, profit margins, cash flows and PBT/EBITA numbers are lifelines of a business and you have to deal effectively with that. If you can’t do that yourself, get a strategic finance head/small team who does and use them to steer the ship well.
Usually, reality bites after the third year. Some business relationships evaporate for strange reasons. Clients businesses may not fructify as you might have projected. How do you stand up when you are up against big global agencies? Business may not come by as easily. The feeling of being on an uneven turf begins to hurt. But then again, this is what you knowingly got into in the first place.
The way forward depends on the overall differentiated vision of the agency and its success in living up to that differentiated offering. Steady growth numbers coupled with year-on-year revenues at a good operating profit margin always make the company a happy place. Only and only when you have reached most of your business and financial goals, can you even begin to have thoughts of an acquisition. That’s the biggest mistake most start-up agencies make — sell off eventually, dreaming of the pot of gold that lies at the end of the rainbow.
Remember: there will never be a rainbow if you do not have a singularly strategic market offer that has an extended growth plan into the future coupled with consistent great work acknowledged by your peers, and most importantly, a business that delivers great profits.
Author is Chairman and Co-Founder, The Social Street