Why selling out to a big marcoms company can be death for bright young agencies

As we move into a new decade it’s a good time to think about that important new advertising agency that’s been waiting to emerge for some time. The reason is based on history; each decade we see a new set of ad agencies emerge.

Going back a few decades we saw the emergence in London of the so called ’2nd wave’ in the early 80s. Some great agencies started then – BBH, GGT, WCRS, AMV, Lowe Howard-Spink amongst others. The timing was perfect as the baby boomers had all cut their teeth working in adland and decided it was time for them to do their thing. We saw a massive trend towards these agencies with a huge refreshment of creative work, thinking and liberation.

A similar wave began towards the end of the 90s, the ’3rd Wave’. The reason was the cyclical nature of the business. Whereas agencies such as GGT were the bad boys, the mavericks, taking chances and courting controversy they became more middle ground, safer, as their client base changed to a majority of mainstream clients. Also for many corporate life swung in to view following floatations, acquisitions, mergers plus the important cashing in by the founders leaving the businesses to be run by managers rather than entrepreneurs.

So we saw HHCL, Simons Palmer, DFGW and others emerge around the change from the 80s to the 90s. Certainly for the first half of the 90s HHCL and Simons Palmer battled for leadership in creative terms and both were in the headlines for most of the decade. However the cycle took over again and by the end of the 90s both HHCL and Simons Palmer had gone down the same road, absorbed by bigger fish.

As we entered the new millennium we saw Fallon start in London, CHI opened their doors and both are now part of bigger groups – Publicis and WPP.

So you get the history.

Adam & Eve have already made a big impression, Agency of the Year in 2010, 18 Feet & Rising have broken through but my contention is timing is again right for new agencies. The industry needs freshing up on a continuous basis and now would be a good time to be doing something interesting and progressive. The natural life cycle of good agencies is inevitable as they attract a growing number of clients for the right reasons however the bigger the client base becomes the harder it is for the management team to retain the original beliefs that made the agency attractive in the first place.

Rather than theorise I have had two experiences where this cycle has repeated itself almost on the same time frame. The first was GGT, a fantastic ad agency with some outstanding people and tremendous creative output. GGT floated on the stock market in 1986 and things immediately changed. The business had a bigger constituency of interested parties such as shareholders; the highly cohesive management team began to break up and the priorities changed from producing great work to making money.

Simons Palmer was independent for 9 years prior to the merger with TBWA; from day 1 up to the merger the agency was run along very clear lines which was all to do with the creative output – it was our calling card, the reason clients came in the first place. Account management and planning were strong and supportive of the end product.

Once we were part of TBWA other considerations were brought in to play such as handling international business on behalf of another office. Politics began to creep in to the work place which quickly led to the original team being separated. Now this doesn’t mean it became a worse place to be, just different and the difference then affects many things that in turn changes the culture of the business.

For 9 years the trio of myself, Carl Johnson and Simon Clemmow remained consistent, since we all left there have been numerous CEO’s.

Repeating a previous point I’m not implying or suggesting all of this is bad, it is simply the cycle most, not all, agencies go through over time which in turn opens up gaps in the market for replacements.

In my opinion the UK market and specifically London has gone too far towards large groups and the balance could do with correcting for a bit of fun, refreshment and colour.

So for those out there thinking about a start-up, it could be a very good time despite the economic climate. I would add this point applies to all sectors of the ad industry, I’ve just used advertising agencies as the example.

(P.S. Simons Palmer started in a recession.)

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adam & eve amv bbh Carl Johnson ggt hhcl Lowe Howard-Spink Paul Simons Simon Clemmow simons palmer tbwa wcrs

About Paul Simons

Paul joined Cadbury-Schweppes in brand management and then moved to United Biscuits. He switched to advertising in his late 20s, at Cogent Elliott and then Gold Greenlees Trott. He founded Simons Palmer Denton Clemmow & Johnson in the late 80s, one of the leading creative agencies of the 90s. Simons Palmer then merged with TBWA to create a top ten agency. Paul then joined O&M as chairman & CEO of the UK group. After three years he left to create a new AIM-quoted advertising group Cagney Plc. He is now a consultant to a number of client companies. Paul also shares his thoughts on his blog. Visit Paul Simons Blog.
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