INDEPENDENT SPIRITS: Independent agencies might be able to offer original thinking and creativity, but how long can they hold out against the lure of the conglomerates, especially those from the US? By Matthew Cowen

For Robert Campbell, it all comes down to puppies. ’We’d like them to stay young and cute forever but in the end they have to grow up and become dogs,’ the joint creative director of Rainey Kelly Campbell Roalfe/Y&R says. ’It’s all part of the lifecycle.’

For Robert Campbell, it all comes down to puppies. ’We’d like them

to stay young and cute forever but in the end they have to grow up and

become dogs,’ the joint creative director of Rainey Kelly Campbell

Roalfe/Y&R says. ’It’s all part of the lifecycle.’



Campbell is referring to his and his partners’ decision last year, while

still Rainey Kelly, to sell to Young & Rubicam for pounds 25 million

after only six years as an independent agency. And the indications are

that he’s not the only member of the ad industry feeling like a

puppy.



The last year has seen a growing trend towards global centralisation,

with the sale of Rainey Kelly proving just how attractive young,

independent agencies are becoming to international networks - and just

how tempting such deals can be in terms of global resources for the

agency and lucrative payouts for its founders.



Recent moves across the pond seem to indicate little change in the

current flow of mergers and acquisitions, mostly by US conglomerates.

The merging of Chicago-based True North’s FCB and Bozell networks seems

to indicate that more independents may be joining Banks Hoggins O’Shea.

The marriage of Leo Burnett and D’Arcy could be a precursor to further

acquisitions by their holding company, the B COM3 Group.



But should agencies be so keen to throw away their independence for the

charms of the global networks? According to St Luke’s chief operating

officer, David Abraham, the current fashion for selling out is

threatening the very basis of the ad industry. ’Within the last decade

we’ve gone from diversity to homogeneity,’ he says. ’Can that be good

for an industry whose purpose is to breed innovation, variety and new

ideas?



These mergers and acquisitions are driven by profit motives on Wall

Street and in the City. We have to be wary of forming an oligopoly and

ensure that clients get choice in the marketplace.’



Y&R’s European chief, Bruno Widmer, one of the emperors in Abraham’s

vision of sprawling monopolies, agrees. ’There’s a clear trend towards

global networks and there will inevitably be a smaller number of

agencies dominating the world,’ he says. However Widmer also believes

that retaining the creative integrity of a purchase is crucial for a

large network to remain competitive. ’A big organisation has a tendency

to be more process-based,’ he says. ’But it’s a fast and flexible world

and we need unconventional solutions. There will always be new agencies

starting up and they provide a crucial talent pool.’



But will new agencies always be so keen to merge their creative chutzpah

with the global resources of a Y&R or Omnicom? According to John Banks,

the chairman of the recent FCB acquisition, Banks Hoggins O’Shea, they

may not have a choice. He believes that it’s the brave new world of the

internet that will finally put paid to the idea of long-term

independence. ’It’s hard to develop data management, direct marketing

and e-commerce on your own,’ he says. ’There’s a lot of smoke and

mirrors to many independents’ claims of being fully integrated, but you

can’t possibly build up the right group of companies unless you have the

money.’





DEUTSCH



There are several reasons why Deutsch is not your typical independent

agency. For a start, it’s the largest independent in the US. Secondly,

it pulls in the kind of clients usually reserved for the big global

networks, having grabbed Mitsubishi’s dollars 300 million US account in

November 1998 to scoop Advertising Age’s award for US agency of the

year.



But, perhaps most significantly, competitors don’t tend to refer to

Deutsch in the same friendly terms that they do other, less-threatening

independents. St Luke’s is ’principled’, Mother is ’edgy’, Deutsch is

’rabble-rousing, cocky and self-promoting’.



It certainly seems to have worked. The agency founded as a print

boutique by David Deutsch has had an incredible past two years under his

son, Donny Deutsch and saw its billings break the dollars 1 billion mark

last year.



Not content with proving that an independent can thrive in its own

country, Deutsch has set its sights on competing worldwide.



Its chief claims the agency can punch the same weight as members of

Omnicom and WPP without the need for a traditional global network.

’We’re looking to establish six to eight agencies around the world, in

London, Europe, Asia and the Pacific Rim,’ Donny Deutsch says.



’We figure that’s all you need to cover 90 per cent of the globe. If you

look at the major networks, only a handful of the agencies in them are

operating as proper full-service offices.’



Deutsch claims to be planning a move to London in the next few

months.



He believes expansion will give the agency an extra competitive

edge.



’Independence means we can have critical mass in terms of our depth but

still remain light-footed,’ he says.



’The global expansion will make us an even more unusual entity. It shows

we’re in a field of one and we’ll always do what’s best for growing the

business.’



Though splendid isolation seems to have worked better for Deutsch than

many others, he freely admits it may not always be the best option.



’You shouldn’t put your stakes in the ground and say you’ll always be

independent,’ he says. ’Up to this point it’s worked for us, but I don’t

agree that independence necessarily equals better or more creative. In

the end, we’ll always do what’s best for our client.’





MOTHER



’They want to cash in,’ Mark Waites, a partner at Mother, says. ’I can’t

see any other reason why people sell out. Agencies do well and then they

just want to be bought. They say that it allows them to expand but

that’s just not something that floats my boat.’



Those who predict the inevitable folding of the ad industry into a few

continent-spanning networks might have reckoned without Mother’s

particular attitude to future growth. After all, it’s hard to persuade

someone of the appeal of massive global networks when they tell you

they’re just not interested in getting any bigger.



’We don’t want to do bigger and bigger accounts,’ Waites says. ’I’ve

worked for agencies before where you’re focused on the bank statement

and you’re forced to take on certain work and we don’t want to lose the

freedom to say no. For us, looking for a client is like looking for a

new member of staff. You want to take on likeminded people.’



Mother has alternative expansion plans that make retaining the agency’s

independence all the more crucial. ’There’s a reason why we didn’t name

this agency after ourselves,’ Waites says. ’We want to make Mother into

a brand that we can use outside advertising. We’re still considering

what we can attach it to but it could give us an interesting way to grow

without selling out.’ Besides, you can’t imagine TBWA Simons Palmer

Mother would be anything like as catchy.



Mother’s high-impact entry into the industry three years ago owed much

to the agency’s unconventional creative work, and that’s an edge that

Waites believes could easily be lost were the agency to sacrifice its

independence. ’You think of the Mother hooligan kit we sent out as a

mailer ahead of the last World Cup and you realise that a lot of what

we’ve done would have been turned down by our bosses if we’d had any,’

he says.



Mother seems more fatalistic than St Luke’s when it comes to the growth

of global networks. ’There’s a long-term pattern of agencies growing,

getting swallowed up and people leaving to set up by themselves,’ Waites

says. ’But we’ve made a point of not doing the same as the rest, so why

start following the herd now?’





ST LUKE’s



Asking whether St Luke’s might someday give up its independence is a bit

like suggesting that Arsenal should merge with Tottenham Hotspur.



’It’s essential to our DNA,’ David Abraham, the chief operating officer,

says. Besides, as he happily points out, selling up might not be

technically legal. ’Our articles of association would prevent it,’ he

says. ’We’re always having amusing conversations with people who don’t

understand our setup and think we can be acquired in the usual way.’



St Luke’s’ unique structure of employee ownership helps explain the

agency’s particularly zealous attitude to independence. ’You can either

look at agencies as structures that just employ freelancers or as

communities of creative people dedicated to an organisation,’ Abraham

says. ’Our community approach supports our effectiveness.’



But there’s more to St Luke’s’ philosophy than backs-to-the-wall

defiance.



Abraham is quick to point out that the agency’s organic growth is the

strongest in the UK, enough to prove you don’t need a global network to

prosper. ’The argument for selling to a large network is the global

resources and infrastructure that they offer,’ Abraham says. ’But people

should make a distinction between international and multinational

businesses.



Most international brands are actually managed on a local basis which

means they need regional agencies. The logic for international networks

isn’t really so strong.’



Nor is Abraham tempted by the takeover experiences of Rainey Kelly

Campbell Roalfe or Banks Hoggins O’Shea, which saw the independents’

management retaining full creative control and actually swallowing up

their acquirers’ existing London outposts. ’You still have to account

for your holding company’s financial considerations,’ he says. ’When a

new client comes to St Luke’s we work out whether it’s the right

business for us or not. We would lose that if we weren’t

independent.’



St Luke’s’ creative integrity plays as great a part in its thinking as

do financial considerations. ’Independents are breeding grounds for

experimentation,’ Abraham says. ’Young employees respond to them because

they’re original and stimulating.’





WIEDEN & KENNEDY



Not many independent agencies would have looked to last year’s Seattle

riots for encouragement, but, according to Dan Wieden, they should have

done. ’It’s a funny thing because the world is coming together and

falling apart at the same time,’ the founder of Wieden & Kennedy

says.



’There are moves towards globalisation and centralisation but, at the

same time, there are groups of people asserting the value of their

independence. That’s what happened in Seattle.’



In Seattle’s neighbouring state of Oregon, W&K has been busy asserting

the value of its own independence since 1982. ’I hated my boss,’ Wieden

says when asked to explain the philosophy behind his start-up. ’I had

reached that point in life where people couldn’t understand what I

wanted to do. I had this arrogant and independent streak and there’s a

bit of that in W&K now.’



It’s the agency’s creativity, rather than the arrogance, that Wieden

seems most keen on preserving. ’People who ask if I’ll ever sell out

just don’t know me very well,’ he says. ’There’s a freedom and diversity

at the agency which comes from the fact that Kennedy and I were both

creatives. The work is the focus and that’s what we’re trying to

protect.’



Like many independents, Wieden claims to have a less-than- driven

approach to new business but it would be foolish to believe his West

Coast cool shows a lack of ambition. As W&K’s outposts in Amsterdam and

London show, his ambitions for the agency are more large-scale than most

independents.



’The interesting thing is that we never wanted to be a boutique,’ he

says.



’We wanted to shake things up on a larger scale and be seen in the rest

of the world.’ It’s an aim that seems to have taken a blow with the

obvious failure of Wieden & Kennedy London to shake things up over the

past few years.



For Wieden, though, such setbacks are yet more evidence of the value of

going it alone. At least there’s no holding company to pull the plug on

the operation.



’If we weren’t independent we wouldn’t have the chance to fall on our

face and learn from it,’ he says. ’Hopefully we’ll be able to do that in

the UK.’



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