A Declaration of Independence
Whatever happened to “life, liberty, and the pursuit of happiness?” Feeling unfairly subjected to taxation without representation, our founding fathers sacrificed everything for the opportunity to determine their own destiny.
Which sounds like the opposite of what happens when independent agencies decide to consolidate—either via private equity, holding companies, or alternative forms of ownership.
The impending merger between Omnicom and IPG might seem like an extreme example of surrendering freedom, as both organizations are already massive holding companies made up of hundreds of former independent agencies. At what point is bigger NOT better? Is access to more technology, increased buying power, and cost savings in infrastructure and back-office support really worth the loss of what was once their greatest differentiator— their individuality?
Is scale worth it?
If you’re an existing or potential client of one of these agencies, will this merger provide smarter thinking and better service? How will conflicts be avoided, secrets be kept safe, and advice remain objective? Will KPIs encourage cross agency collaboration or increase competition for clients and revenue? And for current and potential employees, how many people really want to work for a 160,000-person behemoth? How will they navigate the bureaucracy to access the breadth of services and capabilities promised across the globe, for their clients and their careers?
For those of us in the communications business, we know the importance of having a unique value prop. And “bigger” doesn’t feel like the most sustainable one to me. Or one that provides a lot of benefit to clients, employees, or vendors.
The value of independence
Being independent, on the other hand, has real advantages. Advertisers can cherry pick best-in-class agencies for specific capabilities and experience and put together their own A-team roster, rather than choosing from a limited subset of agencies based on their ownership. And the lack of profit pressure and “taxation” on independent agencies can contribute to better work and better client service. Clients get seasoned employees, who understand the ins and outs of their business and take responsibility for the results. There are fewer layers, and fewer silos.
Employees also benefit from working at independent agencies. It’s far more personal. We know each other by name. We celebrate birthdays, work anniversaries, and new additions to the family. We are all in it together and everyone has a voice at the table. We’ve left more than a few new business pitches only to hear a prospect say, “we can tell you like working together and we want to be part of that.” Employees are given the flexibility and autonomy to carve out their own paths and take great satisfaction in seeing their ideas come into the world. Everyone, regardless of tenure or seniority, is encouraged to bring new ideas and ways of working to the firm.
How we measure success
Financial metrics are certainly an important way to evaluate performance. As a small, (woman-owned) independent agency, we need to ensure we remain a healthy, vital enterprise and invest in the people and the technology to remain at the forefront. That’s no different than our larger brethren.
But there are other measures that are just as important. One of the things I’m most proud of is the long-standing relationships we’ve had with some of the world’s most prestigious brands. Our first client 34 years ago, American Express is still one of our top clients today. Of course we celebrate new business wins, but what drives us and what we consider the ultimate KPI is client retention – proof we’re delivering great work.
And it’s not just clients, our people stay too. Our average employee tenure is almost 3X the industry average. A full one-third of our employees have worked at Sullivan 10+ years and over half have been with us 5+ years. That’s remarkable in an industry where average turnover is less than 3 years. They like working closely with clients, getting to know their colleagues, and feeling like they’re making a real contribution.
The bottom line
Independence has helped us build a special company with strong financial results and long-tenured clients and employees. Which in today’s environment is pretty revolutionary.