Small Is The New Big: How Small, Specialized Agencies Are Winning Big Business by Forbes – Entrepreneurs

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While “small is the new big” isn’t a novel idea, it’s relatively new to the agency world — at least when it comes to winning business from banner brands and Fortune 500s. Ah, but the winds of change are blowing about, shaking up the traditional agency consideration process for better or worse (depending on whether you’re small or big, of course).

As an agency matchmaker, I am constantly connecting brands with agencies of all shapes, sizes and specialties, and after nearly two decades in the industry, I have become quite familiar with how brands small and large approach their agency decision making process. Let’s take a look at the top four reasons brands are considering smaller agencies in their mix instead of gravitating to the shops with more pedigree.

Location isn’t as important.

Not too long ago, location was an integral part of the criteria for choosing an agency partner. With most bigger companies headquartered in bigger markets, this gave the largest agencies the highest chance of success. Smaller agencies can also be located in big cities, but for every agency located in a big market like New York City, there are at least a dozen in less-glamorous locations across the United States. These agencies are landing local and regional brands, but they’re also reeling in national brands who understand the value of working outside of major markets (it’s less expensive) as well as the ease at which you can efficiently and effectively collaborate with your agency thanks to modern technology. Agencies aren’t focusing primarily on location and capability anymore; they’re focused on capability and category experience. 

Key takeaway: If you’re a brand, stop limiting your agency searches by location. You could be missing out. It’s 2019, and times have changed. If you’re a small agency, it’s easier than ever to compete without big city digs, so think about saving that money and investing it in your marketing. And if you’re a big agency, get ready for a slew of competition from outside your market.

Projects are more popular than ever.

The agency of record (AOR) relationship isn’t dead, but it’s certainly been limping along for some time now. More and more brands are deploying more and more agencies. They prefer projects over retainers and are often using a divide-and-conquer style approach to section off a project into smaller projects and bring on specialist agencies to handle the different facets involved. Brands are not only favoring projects over retainers, they’re breaking up projects. This benefits small agencies, who can work on these smaller project budgets and offer the degree of specialization the brand is after. For larger agencies, it’s much more challenging, as they’re losing a big project and having to go after smaller opportunities where, as a naturally more full-service offering, they don’t stand out from a positioning perspective.

Key takeaway: If you’re a brand, look into reducing your risk and improving your results by breaking up behemoth visions into manageable projects. Consider working with a variety of specialized partners instead of always relying on a full-service agency. For small agencies, you’re already used to project-based work. For large agencies, get used to a shifting landscape where nothing can be taken for granted.

Specialization trumps size.

Specialist agencies aren’t typically behemoths. They’re smaller and more nimble. They’re focused, and their positioning is tight. They’re all-in around one, maybe two capabilities for just a few categories, if that. Their deep specialization reduces risk in the eyes of the big brand. Big brands used to go for size to reduce risk. Now they look to specialty. There may be strength in numbers, but there is arguably even more strength in mastering just one or two things to the point where there’s no doubt in your capability. Nowadays, big brands are much pickier about their agency relationships and would rather work with a specialist than a generalist, any day. 

Key takeaway: For brands, I always recommend going with a specialist, especially when it comes to capability and category experience. For small agencies, resist the urge to do it all, however tempting it may be. You must place your flag in the sand. For large agencies, beware of the smaller shops encroaching on your territory. Be careful about getting so big and broad that you become boring.

Small typically means senior.

Big brands are realizing that the bigger the shop, the more junior the team may end up being. Small agencies are oftentimes made up of more senior talent and fewer layers and account people to make it all function. Many big brands are realizing they’d rather interface with a senior-level team and the leadership of the agency instead of being just another account for a large agency. Big brands can have small projects — it’s not all Super Bowl commercials. These projects are the perfect fit for small agencies with senior talent that can give the brand direct access to veterans who’ve been there, done that instead of an account executive with just a few years in the game. To a small agency, the big brand is worth more. The relationship is a source of pride. For a large agency, it might be just another logo.

Key takeaway: For brands, be upfront about asking who you’ll be working with at the agency. You may think it will be the creative director or owner, when in fact you’ll be assigned to an account executive and that’s that. For small agencies, don’t lean so much into your senior staff that you avoid an appropriate layer of support for them. Finally, for large agencies, consider providing more direct access to senior leadership so your clients feel like they’re getting top treatment instead of an account team 24/7.

I think I’ve made my case that small is the new big when it comes to agencies. With tens of thousands of agencies in the United States, the biggest agencies are being threatened by the growing ranks of specialized agencies that have finally mastered the art of positioning and given themselves a narrow focus. Through specialization, these small agencies have a leg up against bigger shops with more name recognition.

March 12, 2019 at 09:50AM
https://www.forbes.com/sites/theyec/2019/03/12/small-is-the-new-big-how-small-specialized-agencies-are-winning-big-business/
Forbes – Entrepreneurs
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