Dramatic change is in the air. We are about to embark on a new relationship with Europe with a new prime minster and, possibly, a new leader of the opposition.
Change, albeit less dramatic, has been blowing through the media agency sector, even before the Brexit referendum result.
Media agencies, especially those in the big holding groups, have been facing a lot of questions about scale, transparency and disintermediation by technology.
But I want to focus on positive progress – the continued rise of the media independent and, importantly, the opportunities this presents clients and future agency leaders.
Independent agencies
With American Independence Day around the corner on 4 July, I took a look at the billings of the top 25 UK media agencies over the past 12 months to see how the independent sector has fared – and it’s good news.
Independent agencies have grown ten times faster than our network counterparts (by 35% compared with 3%), according to Nielsen billings from May 2015 to April 2016.
Independents account for four out of five of the fastest-growing agencies – Generation Media (38% growth); the7stars (32%); our agency, Goodstuff Communications (25%); and John Ayling & Associates (18%).
The independents listed in the top 25 agencies – that’s the four above plus The Specialist Works, RP2 and MNC – notch up combined billings of £500m. And when you consider the top 100 UK media agencies, independents now handle £1bn of billings.
Add to this the news that the7stars and Henry Daglish, formerly of Arena Media, are planning to launch an agency later this year and the future looks exciting for those wanting to own and manage their own shop.
However, the independent media sector is still the poor relation of creative agencies when it comes to our relative impact.
Independent creative agencies account for 18% of billings in the top 25. Compare that with just 7% for media in ours. And, over the past five years, there have been about 13 independent creative agency launches of note – but not one in media.
So, will we see more entrepreneurs launching media agencies? Will we catch up with our creative agency counterparts?
I’m optimistic because technology is not only transforming the media agency business but also the client base.
Ecommerce brand boom
There has been a huge growth in the number of ecommerce brands. They tend to favour smaller, more flexible agencies that can closely mirror their optimisation culture.
Meanwhile, larger, more traditional clients are showing signs of increased confidence in us to deliver both service and value amid continued questions about the equality and suitability of the group agency deal.
But let’s not pretend that launching a media agency is easy. It’s not. It’s hard.
However, it’s getting easier within an environment of positive change as technology has lowered some barriers.
With the likes of the7stars and ourselves here and ready to help, mentor, support and finance inquisitive entrepreneurs, I’m sure we’ll see many more agency launches.
Brexit is the big unknown and it will bring short-term uncertainty. No-one wants economic turmoil to follow but history shows it can create opportunities for nimble players.
It would be nice to look back in five years and see the number of media agency launches starting to challenge those in the creative agency sector.
It would be even better to know that some of us who have already made the leap into the independent sector have helped them happen.
Andrew Stephens is a founding partner at Goodstuff Communications
