As PublicAffairsAsia examines whether size matters in the agency world, Huntsworth’s Asia Pacific Chairman Bob Pickard talks about the latest industry trends across the region
What are the benefits to using a large network over a smaller more boutique style consultancy?
In theory (if not always in practice), larger networks offer scale and scope of services, access to what are often deeper intellectual capital assets, and the PR ‘firepower’ to deploy concurrently across multiple jurisdictions. Overall, I would say that large network benefits are dwindling, which helps explain the rise in market share of specialist and medium-sized agencies.
More and more multinationals are hiring the best boutique agencies on a per-market or per-segment basis, which has resulted in a steep reduction in the number of truly ‘regional’ client relationships. However, there are quite a few mighty ‘global’ ones where the spending power of large clients is used to whip multiple markets and disparate teams into line, which — while frequently unpopular on the front lines of local execution — tends to result in higher quality, more accountability, and the best people working the business.
How do large agencies avoid becoming less personal in their approach to clients?
All too often in larger agencies, even the top talent lack the direct connection between achievement and reward which comes with equity participation, and the mega-firms — especially the ones which are part of advertising-dominated conglomerates — fail to offer the same level of cash compensation and shareholding equity for the best people. In the larger publicly traded firms, there is constant short-term margin pressure that makes it more difficult to develop and deepen long-term client relationships.
There is often constant staff turnover turmoil in bigger firms, which makes keeping brand promises around service quality very difficult to keep. At the end of the day, the best way to overcome these obstacles and ensure the personal service and attention to detail which clients crave is to distribute more equity, train people better, perform more customised career planning, and modernise the account management structure for a social media era (which many firms have yet to do).
Can large agencies deliver boutique offering through specialist practices?
On a good day they can, if their practices have the right leaders. Finding and then tasking the ideal ones can be exceedingly difficult. There’s always a dynamic tension in the agency business between the three dimensions of geography, clients, and practice. The skills of a geographic boss are often necessarily quite different than those of a practice chief, but the agency business can be sloppy and owing to constantly changing situational expediencies, people in the largest agencies are routinely shoe-horned into roles for which they are ill-suited. The result? Quality problems and angry customers.
In the past few years there’s been a lot of action in the so-called ‘conflict agency’ space, where global giants spin-off entire client service sections anchored around the needs of usually a relatively small core group of very large clients. Their money is existential for these firms, who deliver the service fanaticism of boutiques but have access to the back-office support infrastructure of their corporate motherships, who have ‘bricks and mortar’ in cities where these much smaller brands might not otherwise have enough business to establish their own shops from scratch.
Does being part of a larger network of make it more difficult to be agile/respond to rapid market changes/client wishes?
I would say that some larger networks — especially the advertising-commanded ones which really don’t ‘get’ PR — often suffer from the ‘Brontosaurus’ problem, where they are excessively larded-up with process and therefore become agonisingly slow. The global commerce of public relations consulting probably amounts to no larger than a $15-20 billion industry, so compared to other forms of commercial endeavour it is relatively small.
How ironic therefore the over-engineering and approvals mania we see courtesy of the army of accountants who have run amok in many firms. Many formerly great names in PR — which used to be the agile and nimble firms where the star performers wanted to work — have been laid low and reduced to second-rate status by making themselves sclerotic and often hard to do business with. In some agencies, the top PRs have been reduced to figureheads and apologists for the mediocrity which inevitably results from such a dismal trend where the CFO rules the roost.
We’re seeing signs of large agencies working in tandem with smaller boutique affiliates when the need arises. When would Huntsworth and its firms look to do this?
What you’ve identified is most definitely a trend. In Asia, even the best international network offices cannot approach the connectivity and societal alignment capabilities of the best in-market independent firms. Clients have figured this out, but they often find it is a hassle to manage multiple client relationships across borders and they do find the local agencies lacking in world-class strategic savvy.
Their solution is often a hybrid approach wherein firms like ours are hired to coordinate a constellation of agencies against standards-based workscopes and KPIs. We have a lot of experience in this area and there is absolutely no doubt that cooperative inter-agency alliances focused on client needs is becoming a ‘new normal.’