Damian Pincus, partner at independent agency The Works, has rebuked Telstra chief marketing officer Mark Buckman’s claims that there are too many agencies in Australia, saying most of the good talent is currently with independents.
Pincus told AdNews it was in the best interests of large multinational corporations to find a way to work with independent agencies.
“The challenge for larger clients is that they have to find a way to work with those smaller organisations,” he said. “Typically, those bigger clients struggle with that because of the way they operate and their procurement processes. Some of them just want a one-stop shop.
“Talented entrepreneurial people will always set up businesses and start them. They’ll chose the scale they want their business to be and that’s a very healthy position for the industry to be in. You want people challenging the norm, doing things differently and finding new ways to do things.”
The comments came off the back of statements made by Buckman printed in the last issue. “I think competition is a great thing, but I also think there are too many agencies in Australia,” Buckman said. He argued this oversupply could lead to fewer opportunities for individual shops to grow and prosper.
Pincus pointed to Unilever as an example of a large multinational that seemed keen on working with smaller independents in the market. “Unilever has started to approach agencies like Droga5 because it has space in its roster and it wants to find a way to work with those types of companies,” he said.
Independent media buyer John Preston, founder of Match Media, agreed. “It’s this very competition that leads to driving innovation, better creative ideas, better design, quality of service and more choice for customers,” he said. “The market dictates if there is enough business to keep the shops open. I’m not reading a lot of stories about agencies closing their doors through lack of business, so my assumption is there are enough agencies to meet the demand.”
Preston admitted Buckman had a point on profitability and that there was “significant margin squeeze” in some areas. He said it was a function of multinationals having to meet revenue growth targets, which reduced the investment back into the business – a problem that wouldn’t be going away any time soon.
This article first appeared in the 10 August 2012 print edition of AdNews.