Agency identity crisis represents danger and opportunity

The success of a full-service Brooklyn-based agency that put digital and business transformation at its heart from the start is a beacon for rivals looking to help their clients navigate the new world of marcomms.

Agencies are having an identity crisis as they try to come to terms with what clients want in this massively changing world.

This evolution – or revolution – partially explains the stasis in growth across the marketing services holding companies in 2017.

When you are a 150-year-old agency like J. Walter Thompson for example, which bills itself as the "world’s best-known marketing communications brand," it is much harder to turn around the tanker in the face of different trading conditions than it is for a nimble start-up that has only been around for a decade and has innovation infused in its DNA.

This home truth struck me again during this week’s 'The PR Week' podcast interview with Huge CEO Aaron Shapiro.

Huge is a classic start-up story, launched in 2005 by three partners in a small room in Dumbo, Brooklyn, which at the time was a cheap place to launch a business.

Their world was pre-smartphone and pre mass social media. It revolved around small web design projects but soon moved into the broader strategy of transforming companies to succeed in the digital economy. Thinking about users and customers and business transformation is at the core of what Huge is about.

In the intervening years, Huge has grown into a full-service agency with 1,500 people – 800 in Dumbo. It has grown organically into cities including London, Singapore, Colombia, and Toronto.

It never needed to raise money but it became a full part of Interpublic Group in 2012 in order to scale up and tap into the financial support of a large holding company, and to access clients and other capabilities and group expertise.

Huge launched a PR arm last year, led by former Kwittken executive Jason Schlossberg, but it is still anchored in the world of users and business transformation. Shapiro never thought he would have a PR practice 10 years ago, "but when you do social that’s a key part of that campaign - it’s logical to force those two things together."

As Shapiro explains, people have to market in a very different way today and there will be more big change in the next few years, driven by machine learning and AI. He sees Huge’s role as helping companies navigate this new world and market successfully.

As the worlds of marketing and communications converge, driven by digital, he says more and more clients want to hire a single agency. "They’re confused by all the different capabilities and disciplines and who does what – they just want an agency that can get their marketing done," he adds.

He sees this as the future of the agency landscape, a reshuffling where there will just be full-service firms, "maybe with different DNAs because they come from a different heritage, but all providing similar services, at least on paper." What will make them unique is their philosophical approach to the work.

That’s not to say Huge doesn’t partner with its siblings within IPG when it’s appropriate, especially on the media side. It works with IPG MediaBrands because it has the media buying scale, and Huge will handle the media planning. Then there are co-location models, such as partnering with IPG media firm Universal McCann on Fiat Chrysler, where Huge is the digital agency and UM does the buying.

But on the whole Shapiro tries to go in with an integrated Huge offer under one roof, all with a digital perspective, interrelated and connected.

"We have comms pros sitting next to developers and analytics people – the magic is what happens when all those diverse disciplines are together in one room in the same culture and ethos, all trying to build something great for clients," he says. "That’s the magic you can’t get when you partner with agencies and bring them together. You don’t have that close collaboration."

The challenge now for Shapiro, and anyone else who starts a creative new agency, is to retain an innovation culture, keep the firm’s edge, and stay entrepreneurial.

PRWeek has regularly profiled Praytell, another Brooklyn-based agency that formed with creativity and innovation in its DNA and has already achieved success in growing quickly from a start-up to an 80-person shop, winning PRWeek Awards, and being named among PRWeek’s Best Places to Work.

It is now expanding to Chicago having won some work with Anheuser-Busch’s Goose Island brand from one of Huge’s sibling agencies, Golin. It is at an earlier stage in its journey than Huge, but has also chosen to become part of a holding company – Project - to help it scale up.

But it’s a tricky process to master and there is still a long way to go for Praytell. For every firm like Huge there is another creative hot-shop such as Naked that shone incredibly brightly for a few years before self-combusting and burning out.

The secret to surviving and evolving is to be good at embracing continuous change and launching new capabilities and services, recognizing that what you do in five to 10 years will be completely different because of the pace at which the world is moving – this has to be in the DNA of a modern marcomms agency.

As Shapiro concludes, there is a lot to still be excited about in the agency world, albeit in light of the macroeconomic challenges of the holding company networks.

Creativity, communications, and marketing have never been more relevant and important - and agencies have the ability to make positive changes to the world.

Identity crisis or not, that focus and message is as relevant to a 150-year-old shop such as JWT or a five-year start-up like Praytell, and is worth remembering as we forge onto the shifting sands of 2018 and beyond.

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