There's been quite a bit of industry coverage lately heaping
praise on the benefits of large, multinational networks. We read
that the Fortune 500 powerhouses are increasingly
consolidating their accounts with these behemoths, believing that
"bigger is better." But is it? Will all the top global corporations
eventually couple with the WPPs, Omnicoms and Interpublics of the
world, leaving the scraps only for mid-sized agencies and startups
? Should mid-sized PR agencies simply pack up their tents and go
home? Hardly.
Headlines and "agencies to watch" lists notwithstanding, the
best mid-sized firms are thriving in today's uncertain economic
environment. Multinational corporations are choosing the mid-size
agency model for a variety of business reasons, including:
- Innovation: Many of the smartest, most innovative
service offerings in recent years have come from the ranks of
mid-sized agencies. Whether it's a measurement system tying PR to
business outcomes, a methodology for trend-spotting or pioneering
approaches to serve such emerging market spaces as corporate social
responsibility, the mid- sized milieu tends to be first to
market. - Responsiveness: While there certainly are exceptions to
the rule, the "aircraft carriers" of the agency world simply can't
match the turn-on-a-dime responsiveness of their mid-sized
brethren. There is a variety of reasons why this is the case. For
starters, mid-sized firms don't have layers of bureaucracy. Their
leaner structure also enables them to staff accounts with more
senior individuals who have a better grasp on the "business" of a
client's business. - Culture: Mid-sized firms have a true "family" feel and a
genuine "all for one and one for all" philosophy (with no worries
that a call from the holding company might necessitate an immediate
salary and bonus freeze or, worse, a downsizing). Mid-sized firms
can create pure meritocracies in which the best and brightest not
only thrive but, indeed, become partners in the agency. - Return On Investment: For the most part, mid-sized firms
maintain one profit-and-loss center. The Atlanta office isn't
competing with New York City, Chicago and Seattle for the client's
dollar. Having come from a large multinational agency, I can speak
first-hand to the destructive nature of separate P&Ls. And the
battles for the client dollar can become even more intense when
various "integrated" agencies within a holding company are
"sharing" an account. Furthermore, operating expenses at mid-sized
firms are exponentially lower. As a result, clients are billed for
the agency's time, not the fixed costs of its massive headquarters
building. - Staffing: Independence is a beautiful thing. It enables
us to staff a client's account team with the best people for the
job. Mid-sized agencies can decide if they want to invest extra
time at the beginning of a relationship without approval from a
holding-company CFO. Further, you simply don't hear clients
complain about a mid-sized competitor's "bait-and-switch" tactics,
when top managers win the business and newbies execute. - Global capabilities: Yes, you say, but suppose a client
needs global capabilities? Isn't that the Achilles' heel of
mid-sized firms? Perhaps. Some of the big guys do have well-run,
fully integrated offices across the world. Others, though, are
spotty, with a limited range of core competencies. So if a major
financial services firm wants representation in 20 countries, is it
best to select one global partner and hope that each of its offices
has a financial sector expert or partner with a mid-sized agency
that can create a "best-in-class" network of industry specialists
across borders?
There is no definitive winner in the large vs. small debate but
-- industry trade press notwithstanding -- there is no land rush
toward one size vs. the other, either. In fact, we love competing
against a large agency.
Contact: Steven Cody is co-founder and managing partner
of Peppercom, a strategic communications firm with offices in New
York City, San Francisco and London. He can be reached at
212.931.6132, [email protected].