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