Live Issue: Can adland sustain current indie surge?

The number of seasoned adlanders from creative and other functions moving out to set up shop has only increased in recent times. This has led to discussions, both in industry circles and media, about the reason for the exits – especially that of the creatives.

 

The urge to turn entrepreneur is an obvious answer. But the reasons for going independent can vary. Nagesh Alai, chairman, FCB Ulka Group, pegs it as ‘breaking away from too many rules’. He says, “Many of the start-ups and or breakaway groups of agency people are driven by the urge to make a mark on their own unfettered by multi-national agencies’ stymying rules and regulations. Many others are driven by the need to strike it rich by playing the valuation game. But, one thing is common – they all sense and see opportunities to provide specific brand-related services and advertising solutions to the clients.” 

 

Raghu Bhat, founder, Scarecrow Communications, credits the surge of independent agencies to the e-commerce driven market and the new working crop. “The new wave of entrepreneurship unleashed by million dollar valuations and the explosion of digital media combined with current dissatisfaction in existing workplaces will lead to more indie agencies. After taking that leap, each agency has to sustain itself. Most will survive, a few will thrive. But the trend would be – people starting agencies will be much younger. They might have less experience but they will also be more impatient.”

 

Lloyd Mathias, chief marketing officer, HP, looks towards the current economic scenario for providing a conducive environment to independent agencies. He says, “With a growing economy and increasing consumer choice, marketers will look at partnerships outside of mainstream agencies.  Therefore, new set ups and creative hot shops focusing on specific industry verticals or specialised media (like digital or social) will continue to be in demand.”

 

The addition of independent agencies will have certain kinds of effects, if not immediate, on the bigger networks. Santosh Padhi, co-founder and chief creative officer, Taproot India, warns that we will see the independent theme going strong in the future. He proclaims, “This is just the 10 per cent of it all, 90 per cent is yet to be seen by us. There are many more courageous and brilliant people who will try to gather the entrepreneurial spirit in the coming years in a big way.” This, he says, is the result of certain issues bigger networks need to resolve if they intend to retain the big ticket talent.

 

Padhi says, “If a person in a particular network has been handed 12 different brands then you can’t do full justice to any of them. In which case, the creative can think ‘I might as well start something of my own with say, two brands’. Networks have to realise that they need to give enough space to the people in command. Because of the Apac pressure, because of the global pressure, people keep on taking businesses and churning out ads.”

 

The problem for the networks in this case is not just about talent of a particular stature leaving the group. It also has a long term effect that networks need to address if they wish to control the kind of competition they face. Naresh Gupta, managing partner and CSO, Bang in the Middle, spells out how he sees the networks being affected. He says, “The bigger networks are feeling a pinch. Most brands also looking to see if their spends can be optimised.  These are the people that the networks have made; they’re moving out and there is a talent drain that they will start to feel a pinch on. Eventually in India, biggest of brands are with the networks and as any independent starts to take those brands away from them, that’s when they will feel the pinch. Bigger networks have to find a solution for why people are leaving. The main reason seems to be that they are not getting the kind of growth they want. They have to find a way to give people the personal growth they want.”

 

Lloyd Mathais, chief marketing officer, HP

“Networks will feel the pinch, of course.  Some of this will impact mainstream networks – both in terms of business movement and loss of creative talent.”

 

 

 

 

 

Santosh Padhi, co-founder and chief creative officer, Taproot India

“This competitiveness between independent agency and networks existed before but now it has boiled down to ‘I’m giving you half a per cent less’, ‘I’m ready to go on retainer’. The quality of work should be at the center of the business and we haven’t been doing that. Ultimately, this leads to a blame game. ”

 

 

 

Nagesh Alai, chairman, FCB Ulka Group

“The sheer size and resources of these networks will ensure that they are better placed to handle competition. Yes, network could face a long term threat or pressure on their revenues and margins. But then if a start-up or a fledgling agency does pose a threat now or later, someone will end up buying it and killing that agency brand.”

 

Raghu Bhat, founder, Scarecrow Communications

“Networks have nothing to offer to the good creative guys. Plus they are being increasingly seen as ‘un-cool’, especially by the new-age companies and a lot of young talent. It’s difficult to plug the creative brain drain.”

 

 

 

 

Naresh Gupta, managing partner and CSO, Bang in the Middle

“I don’t think there is space for enough independents unless they have a differentiated offering. One of the biggest reasons why brands hire an independent agency is because you get a slightly speedier response and the scope of getting the brief right and cracked is quite large. Everybody is quitting big jobs, to start something of their own, I don’t think they would want to stay small. ”