Hot shops hold their own

The slowdown has not dented independent creative agencies' confidence. A look at what is making them tick in a market that some say has room for all

During a downturn when advertisers are looking to rationalise spends to make up for muted volumes, advertising agencies are one of the worst hit. One would imagine that the creative hot shops, not affiliated to a large network with scale at hand, would draw the short straw. But they inisist that it is not so.

Data from Spatial Access, which tracks account movements as part of its work in improving effectiveness of media use of clients, show that around 30-35 per cent of accounts that have moved from January, 2013 till July, 2014, has been won by independent creative agencies. From 2008 onwards, a lot of senior creative hands left their network agencies to forge out on their own. We take a look at how the independent creative agencies are working around the challenges of scale and positioning themselves.

Sajan Raj Kurup, founder and creative chairman, Creativeland Asia, which has Mercedes, Godrej Consumer and Parle Agro as clients, says, "During a slowdown, clients prefer to go with people that can give them attention. It is rare to find it in a large agency."

Raj Kamble who took over independent agency Strawberry Frog's India operations, and renamed it as Famous Innovations, says, "A creative agency is not scalable. The head of the agency has to be involved with the client, unlike in network agencies where such meetings don't happen. Clients look for interactions with the senior-most creative hand who has years of experience. They are now more comfortable with the intuition that the heads of boutique creative agencies bring than depend on the scale that network agencies promise, as ideas are central."

Scale vs intuition
Kamble says that some of the next generation of business-owners are even reviewing the previous one's agency choices. His agency has won Raymond in January, which had the same tagline for nearly 15 years. It also has Mahindra and Titan Xylys.

Subhash Kamath, managing partner, BBH India (standalone BBH was acquired by Publicis), says, "Some clients require the people, geographical presence and the different services that network agencies offer. When they come to an independent agency, however, they are clear about their objective. It could often be because they don't need a lot of time to be devoted to the work at hand so it would be a project or are looking at a fresh start, away from partners who have become very close to the problem and hence, can't give a new perspective."

Built with partners
Kamble says, "For specialised services such as digital and activation, clients realise it is time to work with partners rather than go with a default option. This way they can choose the best-in-class."

Santosh Padhi, co-founder & CCO,Taproot, which made its transition from a hot shop to being part of a network (in 2012), says, "Being part of Dentsu has given us access to research, software, a legal team. But earlier, we could still go to an independent research outfit. Some clients would want an all-rounder while some would want specialists."

A newbie independent agency, Underdog (founded in January, 2014), too will bank on working with partners. Vistasp Hodiwala or Vispy, who was earlier VP and senior creative director at JWT, and recently formed Underdog with Vikram Gaikwad (earlier executive creative partner, Creativeland Asia) says, "Right from the start we have said that we would work on a collaborative model that will draw on our good relations with contacts in account planning, digital etc. With a big network agency, the language of the clients is different. They want to dictate the terms. But when it comes to independent agencies, the same turn collaborative as they know they have come for specialised work and volunteer their own research or even commission it."

Projects galore
Advertisers willing to work with agencies based on projects have been the wind beneath the hot shops' wings. Taproot moved from working on a project-basis for Airtel and Pepsi to having them on board as commissioned clients.

Kamath says, "Last year or two there has been pressure on the whole industry where everyone has turned cost conscious. During downturn, clients naturally turn to business result-oriented work so they gun for sharper work that will deliver sales. So, project-based work helps at time."

Taproot, which Padhi says retains its independence ("Why would Dentsu remove the very reason they bought us for?"), has around 33 per cent of commissioned business (where clients pay for media buying and agencies earn commission on that), 33 per cent of retainer clients (who pay a retainer fee for all creative work; model considered to be more progressive and more immune to undercutting) and 33 per cent of project-based work.

USPs help

A clear positioning also helps. Alok Nanda, MD, Alok Nanda & Company, the independent design and advertising agency, says, "We have been squarely focussed on lifestyle and luxury space that has led to our rapid growth. With new clients constantly emerging from smaller towns and cities, growth is guaranteed.

But network agencies have also been pulling up their socks, acquiring some of the hot shops to get a ringside view of what works for them (Dentsu)or populating their top management with young talent (Leo Burnett).