Grow your own: the rise of the start-up

campaignlive.co.uk, Thursday, 06 September 2012 08:00AM

The past few years have brought an array of start-ups. But how are they performing and what's their potential? We hear the experts' views.

Grow your own: the rise of the start-up

In the beginning (almost), there was Adam & Eve. The most talked-about start-up of the past five years has come full circle and, after selling to Omnicom for around £60 million, is independent no more.

But what of the agencies that have also braved independence in that time? After the headlines and the mission statements in Campaign, are they flourishing or floundering? And have they proved that well-worn business-studies dictum about the best time to launch a business being in the teeth of recession? After all, the theory goes that agencies launching in a downturn get into good habits from the outset.

It's not easy to see from the outside how well these tender agencies are really performing beneath the bluster; many have yet to register in the rankings of the top 100 agencies and filed accounts at Companies House are sparse. But we know how well they're doing on the new-business front and are starting to have a view on whether they are true to their launch promises. And nothing makes or breaks a new agency's reputation quicker than its early creative output, and we can all have a view on how they rate on that score. But we also canvassed a clutch of the leading influential pitch consultants and intermediaries who have seen these agencies in action - which of the new agencies will they be encouraging reviewing clients to consider?

The truth is we can already get a pretty good picture of which agencies will survive and thrive. The best and brightest of the new agency batch might not yet have the income or profits to rival Adam & Eve in its pre-sale year, but they are already showing a verve and determination that are marking them out. However, some start-ups are already stunted; it might be early days, but it seems unlikely they will take off sufficiently to give the established players much trouble. It's obvious from our illustration where we think the real growth potential lies.

So, given that a start-up really has so brief a period in which to make its mark and capture a regular place on the industry's most interesting pitchlists, why do so many advertising players want to try their hand at running their own business?

Bob Willott, the editor of Marketing Services Financial Intelligence, says: "In a recession, the brightest stars in agencies may be feeling frustrated because the companies they are working on are suffering. They may feel like they don't have a lot to lose, and that they can offer something new to clients."

The prospect of doing your own thing, being your own boss and making a ton of cash is tantalising, whatever the economic weather - as is giving in to those ubiquitous, if unnamed, founding partners Ego and Vanity.

But whatever the motivation behind them, and regardless (almost) of how exciting and successful they ultimately turn out to be, start-ups are to be applauded. It's a ballsy act, which, if a success, can make the entire industry sit up and take notice. Established agencies need a kick in the billings occasionally, and bigger shops should always be alert to what the new shops in town are up to so they can gauge whether they are still in tune with the market. "The creative industry is going to die on its feet if it doesn't have that entrepreneurial spirit," Willott states.

So, if you are sitting in a tiny, unfurnished office with the seeds of regret over the overtly abstract agency name you've chosen already setting in, remember - it's all for the greater good.

Could there be a budding Bartle Bogle Hegarty or Mother among the new agencies we're profiling here? There's always hope. One thing we do know is that 2012, the unofficial year of the start-up, isn't over yet.

ADAM & EVE
Founded: January 2008
Key personnel: James Murphy, David Golding, Ben Priest
Key clients: John Lewis, Phones 4u, Halifax
Turnover/gross income/post-tax profit:
£23.2m/£8.4m/£2.2m
(Companies House figures year to 31 December 2011)

Growth potential

The most impressive new agency so far this century, it seems strange to even refer to A&E as a start-up now that it has merged with DDB UK and returned to the network fold. But if ever there was a way to do a start-up, this was it: A&E sold for around £60 million. As the pitch consultants say, the challenge now is to bring all the values that made A&E so successful to bear on a bigger stage: "If Adam & Eve were a successful antidote to what the large established network offering had become, now they must bring fresh thinking back to a network agency."

Creative highlights

John Lewis "always a woman", John Lewis "the long wait", Foster's "girlfriend's mum"

101
Founded: September 2010
Key personnel: Laurence Green, Phil Rumbol, Richard Flintham
Key clients: Avios, French Connection, Art Fund

Growth potential

This is a tricky one. 101's a secretive agency that doesn't play in the mainstream much. But it boasts some fabulous talent and a quiet sense of purpose; being the next Saatchi & Saatchi doesn't seem to be on its list of ambitions. As the pitch consultants say: "101 is under the radar, but it is a cerebral agency and they've done interesting stuff."

Creative highlight

Avios "anything can fly"

WORK CLUB
Founded: August 2007
Key personnel: Martin Brooks, Paddy Griffith, Andy Sandoz, Ben Mooge,
Jon Claydon
Key clients: Sharp, Ballantine's, General Mills
Turnover/gross income/post-tax profit:
£5.8m/£2.8m/£298
(Companies House figures year to 31 December 2010)

Growth potential

Work Club has a real depth of experienced talent that has quietly built a strong reputation for sophisticated solutions. It doesn't dazzle like some start-ups do, but its pedigree speaks for itself. The intermediaries say: "They have a really good integrated offering. They have integrated digital and creative really well."

Creative highlights

Sharp "FanLabs", Ballantine's "human API"

ATOMIC LONDON
Founded: May 2012
Key personnel: Nick Fox, Jon Goulding, Guy Bradbury, Richard Hill
Key client: Star Alliance

Growth potential

Atomic seems more born out of necessity than the discovery of an interesting proposition. That said, the pitch consultants say: "They are getting on pitchlists and should be attractive to a section of the marketplace."

BETA
Founded: May 2009
Key personnel: Robert Campbell, Garry Lace
Key clients: Royal Mail, English National Opera, Iceland
Billings/revenue: £24.8m*/£4m+** (* figure supplied by
Nielsen ** figure supplied by Beta)

Growth potential

Hmm ... when adland talks about Beta, survival rather than growth is usually the topic. The agency's unashamedly populist work is no reason to criticise. Yet, as the pitch consultants say: "Beta takes two steps forward and one step back. With all the potential talent in there, it's surprising they haven't done better."

DHM
Founded: January 2007
Key personnel: Dave Dye, Justin Holloway, Kim Lansdown
Key clients: Adnams Southwold, Penhaligon's, Rowse

Growth potential

Momentum is all and DHM never quite found it. It does lovely work, but looks unlikely to trouble the established players. The pitch consultants agree: "Dave Dye is a good craftsman and the work is nice but, in terms of business development, the momentum has not been fully realised."

Creative highlight

Elle "wear it your way"

NOW
Founded: March 2011
Key personnel: John Townshend, Kate Waters, Mark Lund, Melissa Robertson
Key clients: Butlins, BT Business, Florette
Billings: £35m (figure supplied by Now)

Growth potential

Now's had a modest but respectable start, which is pretty much how you might describe the agency's DNA. Experience seems to outweigh showiness, but does it also preclude hunger? The intermediaries say: "Now has gelled really well as a team and clients comment on this. The work is a bit 55-miles-per-hour-in-the-middle-lane - ie. not going to offend anyone, but not going to grab attention."

Creative highlight

Florette "bags of feel-good"

FABULA
Founded: June 2012
Key personnel: Yan Elliott, Luke Williamson, Sam Brookes
Key clients: ITV, Wellcome Trust, Body Studio

Growth potential

There's no doubting the creative talents of Yan and Luke, but is that enough of a basis for a new agency? We need to know a lot more about why Fabula exists and what it's for. And so, clearly, do the intermediaries: "Interesting proposition, but they need to prove themselves."

HOMETOWN
Founded: April 2012
Key personnel: Simon Labbett, David Gamble, Chris Jefford, Helen Kimber
Key clients: n/a

Growth potential

Well, they're a nice bunch, with good intentions and a sound digital foundation, so while we're not expecting to be blown away by the thrust of Hometown's take-off, we think it will do some interesting but perhaps small-scale work. The intermediaries are also keen to see what it is made of: "It's too early to say but nice people, worth watching."

JOHNNY FEARLESS
Founded: February 2011
Key personnel: Neil Hughston, Paul Domenet
Key client: Diageo

Growth potential

Not much to say about this agency so far, which is not a good sign 18 months into its existence. We're already starting to forget it's out there. The pitch consultants reckon: "They had a bit of a stutter on the people front. They've got Diageo, but need to win breakthrough business and are struggling to get to the next stage."

THE CORNER
Founded: January 2012
Key personnel: Neil Simpson, Neil Hourston, Tom Ewart, Marc Giusti
Key clients: Orbis Mutual Funds, Coca-Cola, Winning Moves

Growth potential

This should be an interesting agency to watch once it gets motoring (which it needs to do visibly and quickly). The line-up is impressive enough and it certainly represents an interesting but relatively safe choice for clients. We wait eagerly to see more. The intermediaries reckon: "They had a good start and they are good people on paper. Doing a lot of under-the-radar stuff - ones to watch."

JOINT
Founded: May 2012
Key personnel: Damon Collins, Richard Exon, Lori Meakin, Nik Upton
Key client: Project Verde

Growth potential

Joint's off to a fabulous start with one of the most interesting briefs around in the form of The Co-operative's new high-street bank, dubbed Project Verde. It's exactly what you would expect from some of the hottest talents in the business and, hopefully, a sign of exciting things to come. The pitch consultants are watching eagerly: "Because of the shared heritage, everyone, perhaps unfairly, is pointing to them as the next Adam & Eve. The work they do for Project Verde will be their calling card. Expectations are high."

GREEN CAVE PEOPLE
Founded: September 2011
Key personnel: Malcolm Green, Marc Cave
Key clients: Telenor Group, Tetra Pak, B&Q, Jewish Care
Billings: £15m (figure supplied by Green Cave People)

Growth potential

Well, you can't argue with the experience of the founders, but there's not much sense (yet) of what the agency offers that's new and different (or even complementary) to the rest of the market. It's hard to feel excited about it so far. The pitch consultants don't have much of a view either, which is concerning: "Has not been on the radar, so difficult to assess."

18 FEET & RISING
Founded: December 2009
Key personnel: Matt Keon, Jonathan Trimble, Tim Millar Key clients
Virgin Media, Nationwide, National Trust
Billings: £43.2m (figure supplied by 18 Feet & Rising)

Growth potential

The agency got off to a great start as a young pretender, though momentum has slowed a little since winning the mammoth Nationwide business in 2011. This is still far from a mature agency and we're waiting for more fireworks. The intermediaries say: "18 Feet & Rising's tipping point was Nationwide. They have gained enough traction in the marketplace to be taken seriously. Some nice work, but the jury's out on how effective it is."

Creative highlights

Freeview "corgi", LoveFilm "gangsta grannies", Nationwide "carousel".

This article was first published on campaignlive.co.uk

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