Independent networks can be the right choice for clients that appreciate the value of a global network of firms, but don't want to be confined to a single brand agency.
When Lisa Arthur became CMO of productivity software provider Mindjet last September, an agency contract was up, and the company was re-evaluating options. It ultimately selected GlobalFluency (GF) as AOR for its flexibility, efficiency, and speed.
"A big global agency was a blanket, and we [wouldn't] be able to reward relationships with other agencies that were doing a good job," Arthur says. "We can plug and play GF when and where [we] need, and it partners with firms that worked well for Mindjet."
GF, a network of 34 agencies in 40 countries, began only four years ago. On network projects, members drop individual brand identity and operate as GF. "We can engage resources within a day or two," says GF SVP Derek Kober. "We don't necessarily engage entire agencies. That helps keep it very cost-effective."
Using GF, Mindjet reduced global PR spend by 40% without reducing reach.
"Our pockets aren't deep, but we need PR in global markets," notes Arthur. "[GF] organizes all [resources] and shuts it down when the program is over. I don't have to rely on my head of PR to navigate all those agencies."
Centralized infrastructure helps GF manage projects and increases efficiency. "Larger agencies have infrastructures that support a lot of different disciplines," says Brian Regan, GF SVP. "We focus on tech, telecoms, and related disciplines. We can be more competitive because our offices aren't shackled to global cost structures that are... forced on them."
In other networks, one agency is commonly hired, and it pulls in partners as client needs demand.
"Every network goes through the same evolution," says Matt Kucharski, a Padilla Speer Beardsley (PSB) SVP and Worldcom board member. "The question is what you do with it - band together and pitch as the network, or make the network a key feature of each agency?"
Worldcom branding is part of individual agency branding, but doesn't usurp it. A lead office is critical in determining strategy, and Kucharski says most search consultants report that agencies are hired based on local office strength. Such was the case with Worldcom client Valspar, a Minneapolis-based paint and coatings manufacturer with more than 50 worldwide locations.
"We wanted PSB because it's a Minnesota company," says Tim Dowse, Valspar corporate security director. "As Valspar grew and became [more] international, [the network] was a definite benefit."
Ronald Hanser, president of Hanser & Associates and chairman of Pinnacle Worldwide, says network benefits include sharing global best practices and knowing that clients get quality service from network partners.
Roche Pharmaceuticals hired Hanser & Associates as an AOR in 1999 when it began assembling its own agency system, Roche Agency Network (RAN). RAN comprises six firms, including two other Pinnacle members: Houston-based de La Garza PR and Chicago-based HLB Communications. Alfred Wasilewski, Roche executive director of corporate communications, says he chose the agencies based on local market expertise, rather than the Pinnacle affiliation.
Skanska, a leading global construction group, works with nine agencies - three of which are PROI (Public Relations Organisation International) partners (Frause Group in Seattle; Tucker/Hall in Tampa, FL; and Jackson Spalding in Atlanta). Stockholm, Sweden-based Skanska has grown through acquisition, thus inheriting many agencies in US markets.
While Jessica Murray, Skanska's director of field communications, says she, too, hires based on local expertise, the network is an "added bonus." "I manage that communication less, and the connection can help speed the grand [global] unification," she notes.
New models take shape
Lumin is one example of a newer breed of network, formed in 2003 by CRT/Tanaka, Peppercom, PSB, Davies PR, and Conexion. Essentially, it operates as a think tank of like-minded companies, committed to training, research, and best practices. "It's about pooling resources, minds, and monies to explore what's next in PR, communications, and marketing," says Lumin cofounder Patrice Tanaka, co-chair and chief creative officer at CRT/Tanaka.
CRT/Tanaka also belongs to Pinnacle, and PSB is part of Worldcom. Tanaka and Kucharski report benefits from membership in both types of networks.
"I've always seen Pinnacle as dots on the map," Tanaka says. "The idea with Lumin is to make ourselves smarter counselors. We also look at creating greater efficiencies. Recruitment is one of the biggest common challenges, [so] we met with potential vendors we could all tap together under Lumin. We [also] look at volume discounts if it makes sense."
Converge, formed by eight firms late last year, is a hybrid - a national network of similar agencies that share knowledge, resources, and clients. There is no formal leader.
"It's a blend of both models," says Doug Spong, president of Carmichael Lynch Spong (CLS) and a founding member of Converge. "It's designed to benefit individual clients without worrying about who's making money off what. [There are no] dues [or] bylaws. We're not feed[ing] the beast, and we're not bound. For example, [because CLS is] owned by Interpublic, we may want to tap Weber Shandwick or GolinHarris, but there's no pressure to exclusively use Interpublic or Converge."
Independent networks by the numbers
Leader: Jean Leopold Schuybroek, president worldwide
Revenue: $205 million
Leader: Kathryn Blanchard, president/worldwide
Revenue: $93 million
Leader: Ronald Hanser, global chairman
Revenue: $185 million
Leader: Donovan Neale-May, managing partner
Revenue: $45 million
Leader: Thomas Van Blarcom, group chair
Revenue: $189.2 million
Leader: Mads Christensen, network director
Revenue: $148 million
Leader: Mark Raper, chairman; Darryl Salerno, part-time executive director
Revenue: $32 million
Age: 5 months
Revenue: $55 million