CLOSE-UP: LIVE ISSUE/AGENCY START-UPS; How to make a start-up work right from the start

Richard Cook looks at the problems facing start-ups in an overcrowded market

Richard Cook looks at the problems facing start-ups in an overcrowded

market



In the same way that owners come to resemble their pets, advertising

agencies can come to ape the client companies they serve.



Examples of this arrived in a mild flurry last week (Campaign, 10 May).

First, two of the founders of Bean MC, itself a creative independent

start-up with a difference, relaunched as a new brand development and

communications agency, Bean Andrews Norways Cramphorn. Its point of

difference was design.



The second example came with the reverse takeover of the specialist

agency, the Bastable Hazlitt Partnership, by a City-backed trio of

advertising talent led by the former McCann-Erickson chief executive,

Malcolm Summerfield, and supported by the creative, Paul Wilmot, and the

direct marketing specialist, Jane Keene. Summerfield Wilmot Keene will

have a considerable advantage over most start-ups - pounds 25 million to

be precise, once the BHP billings are added. But it too is stressing a

point of difference from conventional agencies. Its proposition is

access to an all-round communications group, complete with a fully-

fledged media arm, and an international network, courtesy of an alliance

with Grey and two wholly owned PR consultancies.



In addition, the former BSkyB marketing director, Philip Ley, is putting

the finishing touches to his own agency start-up, which will service the

Sky account and, although Ley is not yet saying, he is expected to offer

some sort of new, integrated structure.



But how much of this is hype and how much heterodoxy? Certainly the

first task of any start-up is to get itself noticed.



‘There’s little doubt that most agencies start out by telling everyone

how different they are,’ agrees Ian McAteer, a partner is the Scottish

start-up agency, the Union, ‘and I would agree that certain agencies,

the successful ones, do develop unique selling propositions over time,

but claiming to be different at the beginning is just a gimmick.

Remember when the Saatchis first launched and they took out full-page

newspaper ads saying that the time was right for a new kind of agency,

that there would be no account men in the business? They quickly hired

Bill Muirhead and soon had the best account men in the business. All too

often the launch positioning is just a way of getting noticed.’



What is increasingly clear, though, both to the banks lending the money

and to the advertising and client community, is that new agencies need a

more compelling logic than ever to launch. That doesn’t necessarily mean

they have to be saying something new, just that they are confident that

the end results will be better. Unfortunately, the best way of

demonstrating to the client that this will be the case is by pointing to

the one thing a new agency doesn’t have, a track record. Hence the need

for a little creative market positioning.



‘I don’t think credentials on their own are enough anymore,’ Robert

Bean, a co-founder of BANC, says. ‘You might have a good team on paper,

but not be able to play together as a team. And then you have to look at

it from the client’s point of view - they may very well not be as

familiar with the personalities as the advertising community is.’



Richard Hytner, the chief executive at the Henley Centre, looked closely

at starting an agency before accepting his current job. ‘It’s an

excellent time to start an agency,’ he says, ‘and I must say, I was

personally surprised by the availability of funds. But the real reason

it is such a good time is because the whole industry is going through a

massive change and clients are looking to different companies to advise

on communications.’



Hytner thinks the days of the agency start-up along traditional lines

are probably now over. ‘It’s tempting to see Rainey Kelly Campbell

Roalfe as the last of the start-ups along classic lines,’ he says. ‘It’s

done very well because it got in on the communications centre

positioning before anyone else. What we will increasingly see now, I

think, are start-ups looking to fill niches within the total

communications package - agencies just servicing retail clients, for

example, and trading off their specialised industry knowledge.’



And there’s the rub. Just like the clients they advise, publicly

everyone likes a new agency to have a point of difference, but, of

course, privately, only if it’s more than just a marketing position.



‘We started from the proposition that the market was over-saturated and

that there were no clients out there saying, ‘Christ, what we need is a

new agency’,’ remembers Rainey Kelly’s joint creative director, Robert

Campbell. ‘And I do think a new agency has to position itself carefully.

For us it was ideas and the admission that we couldn’t execute across

all media in-house.’



No-one is doubting that the sheer practicalities of an agency start-up

make it difficult for the partners to plan logically and structure their

launch with a clear proposition. It’s unquestionably a traumatic time,

often involving considerable financial sacrifice and risk, and a

minefield of legal questions. Certainly it’s unrealistic then to expect

every start-up to offer something genuinely different in the history of

advertising from day one.



Sometimes, though, it is necessary to help the client cut through agency

clutter. For a start-up - without a track record of its own and

dependent on the varied talents of its founders - its positioning can

offer a short cut to success.



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