AdAge magazine just released its 2009 annual agency report today, ranking all the top agencies by revenue and grouping them according to what may be dying distinctions like advertising, direct, media, digital, search and PR. Overall agency revenues were down 7.5%, “the sharpest revenue decline in the 66 years Ad Age has produced the Agency Report.” Although digital agencies overall faired a bit better, statistically gaining 0.5% over the previous year.
But what I find more interesting than anything else is that digital agencies, once considered the mavericks, the outsiders are now about as mainstream as possible if for no other reason than almost all of the top twenty agencies are owned by much larger agency holding companies. The true independents are becoming rare indeed. It started a couple of years ago with Publicis gobbling up Digitas. They have since acquired Razorfish as well. Blast Radius is a part of WPP and the #3 digital agency is IBM Interactive and we know nothing speaks independent more than being a part of IBM.
In fact of the top 20 digital agencies, only 5 are not owned by a much larger company. And of those, Sapient has merged with Nitro, Rosetta bought Brulant and iCrossing appears to become a part of the Hearst empire.
What does all this mean for independent agencies, for marketers and for consumers? Well, sitting in one of the top five remaining independent agencies, Ascentium, makes me feel like I’ve got a bull’s-eye on my back and I’m waiting to hear the M&A types pounding at my door. And perhaps that might not be a bad thing from a financial point of view.
Although for many us who have done both the big agency and the startup, we know why we went for the small option. It’s more fun, we get to work the way we want to and it frees up our creative juices. Frankly we produce better work because we feel like it. That’s the reason a lot of corporate marketers are turning more and more to independent and specialty shops; that’s where the ideas, the new technologies and the partnership mentality come from.
And finally, what about the consumer, do they care where marketing campaigns and experiences come from? Maybe not, but according to the latest from Forrester, watching advertising ranks lowest among consumers as a measure of influence, purchase intent and loyalty. And it’s the big guys who still make most of their money from these forms of traditional push advertising. So go figure.
I’m proud that Ascentium has made it to the #5 position among independent digital agencies this year. And I hope that demonstrates both our preference for going it alone and for our clients’ preference to work with an agency who considers their clients their partners, not their holding company.