By Geoff Livingston, Capitol Communicator Media Strategist
More and more indicators show that small agencies are making headway in the battle for Fortune 1000 business. The main driver is their ability to rapidly adapt to new media technologies and offer specialized services.
Just last week, Boston-based SHIFT Communications picked off a piece of T-Mobile’s PR business, joining agency mainstays Porter Novelli and incumbent Waggener Edstrom in a rare three-agency approach to national communications. SHIFT was named agency of record for social media.
T-Mobile’s VP of communications Janice Kapner said in a statement, “We were looking for smart and talented agency partners and wanted to find the right mix of the best of the best, with diverse expertise in social media, creative and unexpected PR work, and of course — agility.”
I read a fantastic Holmes Report interview with Sir Martin Sorrell, chair of WPP. WPP owns scores of agencies, including Hill & Knowlton, Ogilvy & Mather, and Young & Rubican. Sorrell complained about continued single-digit growth for large-agency businesses, blaming small, specialist firms for undercutting growth. The challenge comes from small agencies ability to adapt to new media technologies and provide innovative niche services.
“The specialist businesses, because they are more focused, are strong,” said Sorrell. “The global businesses find it more of a challenge, because there are more moving parts.”
The big agency’s inability to adapt to rapidly evolving media is not a unique one. The defense industry is experiencing a similar issue. The world’s largest buyer, the U.S. Department of Defense, is signaling that it will adapt its procurement procedures to work with firms that are better able to adapt to new technologies. The Defense Department does not want to lose competitiveness because its large, traditional monolithic defense partners are unable to adapt to technological change.
In the end, scaling will always be an issue for boutiques. As such, large agencies (and defense contractors) have their place. Perhaps T-Mobile’s approach of small and large together is the right method.
But if big companies want to procure innovative communications techniques, the age of the small agency may very well be upon us. In that sense, we may be dealing with a wide-open competitive market for the next decade.