As the national holiday approaches, it’s a fitting time to consider the importance of independence in the world of PR agencies. For years, advertising and PR firms have touted their “independent” status. But what does that really mean?
One thing might be faster growth. In our industry independent agencies have grown at a brisk clip when compared to publicly-held PR firms for the past few years, although the larger agencies had a nice rally in 2019. But according to The Holmes Report, “the divide between independent and public PR agencies is seen more clearly seen when analysing the performance of the Big 4 holding groups, whose PR operations grew by just 3.3% to $4.8bn.”
In other words, for larger agency networks and holding companies, growth is far more sluggish than within substantial midsize firms.
For PR agency clients, “independent” can be a code word for small or affordable. It can mean a smaller minimum fee as well as greater speed to market. Or, it can signal flexibility, given that indie firms are less hierarchical than mega-firms, and thus free to partner with a multitude of marketing agencies. They’re likely to be open to working with early-stage companies as well.
There’s also a cultural impact, at least in theory. For agency staff, independence can mean greater mobility and responsibility. Yet most of the time independent status doesn’t translate into a tangible benefit or differentiator inside the agency. You can argue that it’s only in rare cases that it becomes a meaningful selling proposition or internal cultural statement.
But maybe it should. Here’s what “independent “means to me in the PR or creative services world, with bias acknowledged.
Objective counsel isn’t guaranteed in a politicized corporate environment. Any recommendation that leverages client dollars from one sector to another is likely to be influenced by international considerations, and it’s subject to multiple approvals. Sometimes a large agency’s infrastructure dictates its advice to clients — there’s always a need to feed the beast. But undiluted and objective feedback is, above all, what clients ask of their agencies, and it shouldn’t be compromised by internal politics or bureaucracy.
In an “integrated marketing” environment, the highest-margin service can dominate the client relationship or even the creative product. That happens far less often at an independent agency, where they are more likely to take creative risks. There may be no bigger risk than starting your own company, after all; it’s in the DNA of most independent firms.
Good value shouldn’t mean cheap, but it’s true that the trappings of global status and marketing integration, like multiple brick-and-mortar offices, can undermine client service. You can’t ignore the differences in profit margins among different types of PR agencies. Whereas a 15% profit may be fine for an independent firm, a holding company will demand a 25% margin. That translates to a far higher toll on the team, leading to greater turnover and often a fractured culture.
No matter what they say, it’s unavoidable. Agency networks are by nature large and bureaucratic, and bureaucracy means layers of approval and slower execution. If speed to market is a priority, your best bet is an independent agency, where the levels of approval are lean and the bias is toward action.
The most client-friendly agency culture will reward staff behavior that shows accountability and a bias in favor of action.
Having worked at a midsize owner-operated agency, the largest independent firm, and an integrated ad and marketing agency, I favor simplicity, a minimum of bureaucracy, and fewer deciders. An owner-operated organization is better positioned to create a truly entrepreneurial environment that rewards proactivity, accountability, and, even risk.