A Good Time to Start A Small Advertising Agency?
New Ad Shops Are Tempting, But More Risky to Launch in a Recession
Jun 11, 2009
A recession is probably not the best time to launch a new ad agency although there may be a great temptation to do so because of layoffs, job insecurity and personal dissatisfaction at big agencies. But what is the best type of agency to start in the midst of a technology revolution that is forcing current ad shops to change the way they do business?
The 21st Century communications revolution is prompting some newagencies to specialize in digital and social media.
Avi Dan of New York, on the other hand, recently started a new agency focusing on ideas and creativity rather than process and media. In an article for Advertising Age, Dan wrote, "I believe in great ideas and I believe that there aren't enough of them. " He wants to go back to the days when ideas dominated the advertising business.
Execution and Technique
"The advertising business today is more about execution and technique than about ideas," he said.
Dan, a 30-year veteran of Berlin-Cameron, Euro RSCG and other large agencies, named his new agency "Darling." He said he and his partners "hope to attract clients who believe that ideas have the power to transform their business." He acknowledged that his approach is "a bit old-fashioned."
"P&L statements replaced the passion for great ideas," Dan said. "I believe that this industry's salvation will be small shops like Darling, willing to experiment with new approaches, new ways to be compensated, hiring different kinds of people, rewarding them more attractively. Willing to take risks."
Dan's business approach stimulated a long list of colleague comments in Advertising Age, some supportive, some disagreeing with his strategy.
Ideas Still Coin of the Realm
"Caprityme" of San Francisco agreed that "ideas are still the coin of the realm in marketing," but added that current marketing realities "are not friendly to small agencies focusing on the power of ideas and the passion for the old way of advertising." He said ideas can get lost in today's "relentless drive for efficiency and impact."
Jeff at SwiftMediaA in San Clemente, Californian cautioned against comparing a new agency to a new baseball stadium, as Dan did. "'If you build it they will come' doesn't work for my clients or for yours," he wrote.
Larson at Energy Garden in New York said great ideas "don't need to be pigeonholed by a particular delivery vehicle, nor should they be defined by that vehicle."
Data Mining Analytics
A Maryland writer named Rozzie said a new agency will "face many a marketing department that has been burned once and again by "idea" centered agencies." He added that "hang wringing CMOs (chief marketing officers) are being harangued every day about instant testing, data mining,analytics and, yes, execution."
A Costa Mesa, California reader agreed that "ideas are king, but bean-counters remain the heavy-handed queen."
A New Yorker using the online name "bchiger" favored digital advertising and social media "because they force advertisers and clients to reevaluate the relationship they develop with consumers."
Barry Lowenthal of the Media Kitchen in New York recommended what may be the safest approach. "The most compelling brand experiences are the product of media and creative working together," he wrote. "When that happens the results are exponentially more powerful than any one discipline working along."
Future Ad Agency Business Models
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