Independent agencies strike out at Sorrell

By By David Blight | 12 September 2012
WPP chief executive Sir Martin Sorrell.

Indie agencies have come out swinging after WPP boss Sir Martin Sorrell said independents are finding it increasingly hard to thrive, calling his comments “misinformed”, “blatantly biased” and “ridiculous”.

In an interview with AdNews during his visit to Australia last week, Sorrell said it was becoming difficult for indie agencies to survive, arguing a trend to consolidation was becoming more prevalent.

Sorrell said: “Clients are looking for efficiencies rather than effectiveness so in tough economic conditions in slow growth markets it is very difficult and smaller sized agencies are finding it more difficult. There is a natural consolidation of share among the bigger agencies in tough economic conditions.”

However, numerous independent agencies have fired back at Sorrell's comments.

Jules Hall, founder of Sydney-based indie agency The Hallway told AdNews: “As the owner of an independent agency I am incredibly flattered by Sir Martin's comments. They are so blatantly biased, and ridiculous, that they could only come from a man feeling threatened by the very real challenge posed by the ambitious, motivated independents.

“A constant criticism we hear from clients that have chosen to leave networked agency groups to work with independents like us, is the frustration of being constantly sold into the other companies in the holding group. They don't see that as an 'efficiency', they see it as the agency group trying to line their pockets at the expense of the client.

“The fundamental problem with the networked agencies is that they are not led by their founders. It is the founders, the ambitious, hungry pioneers, that build businesses. The third, fourth, fifth generation managers of WPP agencies are in a totally different position. They have everything to lose, and a whole lot less to gain. That creates a totally different commercial attitude; defensiveness at the expense of entrepreneurialism. The losers in that situation are the shareholders like Sir Martin. No wonder he's trying to influence the industry away from his biggest threat – entrepreneurial independents.

“Independents only grow because they are more ambitious, more hungry, more visionary. They see opportunities and they make them happen. The first benefactors of that attitude are their clients. They get more ambitious thinking.  In tough times that's the attitude that delivers the best results. It is effective, and because the independents operate without the holding group overheads, it is more efficient.”

Loud chief executive Lorraine Jokovic argued that Sorrell's comments took a narrow view of client desire.

“I'm not surprised he said those things,” she said. “It supports his business model, he is touting bigger is better. But people select an agency for more reasons than procurement.”

Brent Jarvis, principal of Brisbane-based creative agency Engine argued that the benefits of indies can outweigh those of large networks, even in tough economic times.

“There is no inherent benefit in size but ask around and cumbersomeness, red tape and internal bureaucracy are generally hall marks of the large international agency networks. Independents are usually less hide bound, less bureaucratic, lighter on their feet, more responsive and because of fewer work flow impediments and barriers, probably less costly.”

Talking from a media agency perspective, Match Media founder and chief executive John Preston argued Sorrell must not be getting very good advice on the Australia market.

“My view is Mr Sorrell may not be getting the best advice on the Australian market or he’s just looking at the fortunes of WPP in this market,” Preston said.

“Firstly the clients we talk to are absolutely looking for effectiveness, while he implies all are just looking for efficiencies. And as for the health of independents all I can say is Match has nearly doubled in the last two years. I wonder how many WPP agencies can claim that growth in Australia?

“We may not all be driving Bentleys like Sorrell but we are still doing pretty well.”

Finally, Simon Rowell, the founder and managing director of indie branding agency Brand Intellect said: “Whilst Martin Sorrell says that clients are looking “efficiencies rather than effectiveness so in tough economic conditions” our experience couldn’t be more different. From where we stand, clients seek out value for money when times are tougher and effectiveness is a fundamental element in increasing value. Furthermore, I have never heard of a client using a multinational agency because they are cheaper, so I am not sure where the efficiencies he mentions come in to play.

“As an owner of an independent branding agency, we are busier than we have ever been.

“Our structure is flatter, our clients only work with senior people on our team and our overheads are lower. Our reputation is strong and most of our clients come through being referred to us.

“What tough economic times successfully do is to filter the pretenders out of the market, big or small.”

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