5 Reasons Why Small Ad Agencies Are Outmaneuvering The Giants



At SMWNYC, HeyOrca’s Joe Teo explained how the client-agency relationship in advertising is changing rapidly, and how only agencies with similar speed and agility would be primed to capitalize.

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Advertising hasn’t traditionally been the arena where David slays Goliath, but things are changing. At the very least, David and Goliath are beginning to coexist peacefully.

According to Joe Teo, CEO and co-founder of social media planning tool HeyOrca, major changes in the ad industry are making it easier for smaller agencies to thrive — even in ways that seem counter-intuitive.

Teo spoke to the crowd during Social Media Week New York and outlined some major reasons why, and how, smaller ad agencies are finding a foothold. Here are the five biggest takeaways:

Agility is paramount

Ad giants often can’t keep up with today’s breakneck speed. “Content needs to be produced at the speed of social — which is near real-time pace,” said Teo. 

Gone are the days where advertising spots required a long, drawn-out process from the formation of the creative brief to execution. Now is the time for agility, which smaller firms are primed to provide.

Another area where smaller agencies are more agile than big ones is their ability to leverage specialized technology. Your smaller agency might not have the manpower to compete with the giants, but you can use technology to gain efficiencies and find areas where you can scale and make operations repeatable.

The big agency business model is breaking down

It used to be that ad agencies set the standards for how advertising was done. But two big shifts have made the big agency model untenable, and it’s slowly breaking down.

One is that brands are more frequently taking their marketing and advertising in-house. It used to be the advantage of a big agency to have all the means of production cornered, but now, “Technologies are enabling people to be creators in the own right,” Teo said. “Knowhow in the industry is democratized.”

Speeding up the level of in-house adoption is that brands are understanding the inefficiencies of a people-intense business model, which is what big agencies are built on (it can’t be a big agency if lots of people don’t work there, right?). It’s much less expensive to retain your own, smaller, in-house group.

Brands still need niche experts

Not only are smaller agencies more agile and nimble, but they are more likely to specialize in niche areas that brands need help with. The expansion and complexity of social media, for example, means that even the most seasoned in-house creative teams will need help figuring out new platforms and media.

The number of marketers looking for specialty agencies is on the rise, from 47 percent in 2013 to 71 percent in 2017. If you’re a smaller agency, figure out what you’re known for. “That’s the flag you need to plant,” Teo said. “Understand what makes you, as an agency.”

Teo took a minute to shout-out fellow SMWNYC panelist Rev. Run, who advocated that brands “Know your lane and stay in it.” It’s another way of saying know your strengths.

Clients want more control

There has been a demonstrated shift towards clients wanting more control and transparency over their creative. This benefits nimbler agencies, which can position themselves as partners rather than bosses of content.

“Be an extension of your clients’ team — know how they work, make sure their workflow is aligned with yours, and be transparent,” said Teo. Big agencies can’t offer that same level of control and transparency, because they are too complex.

Project-based work is on the rise

Firms are increasingly favoring project-based work, which might involve working with one agency for a few months, then switching to another for another project altogether. A larger agency might not stand for this, but smaller ones can carve out their niche and encourage firms to return for them for repeat projects.

“Thirty-five percent of 115 agencies said a majority of their assignments are now project-based work,” said Teo.

Advertising firms are seeing a window of opportunity that is being propped open by changes in the values of clients, advances in technology, and a fresh understanding of how work should flow. For the first time in a long time, we’re seeing an even playing field between the two kinds of agencies, and those who recognize their ability to capitalize will be rewarded.

HeyOrca makes social media planning for agencies easy! Seamlessly plan for multiple clients and get content approvals in the ultimate sandbox for marketing agencies.


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