Half of all independent agencies will close in the next seven years warns Chris Savage
Around half of all independent agencies will disappear in the next seven years unless the industry changes quickly, a former STW Communications executive has warned.
Chris Savage speaking at SAGE conference on October 12.
Speaking at the Secrets of Agency Excellence conference (SAGE) yesterday, Chris Savage echoed the prediction he made regarding the PR industry at CommsCon earlier this year.
“I don’t know what you do as well as I know the PR industry, but I know it pretty well. I ran many businesses in STW over many years,” the business growth specialist said.
“In every part of the business, independent agencies have to work harder to evolve and change and stay ahead than anyone else.
“I reckon my 50% will close within the next five to seven years would apply to most of you, and what you do.”
Savage said he was concerned for particular areas like sales, promotion and activations, that are undergoing change, and suggested the need for independent agencies to seize opportunities.
“This is a brilliant time for us in what we do, to thrive. There is a real opportunity for us as independent agencies to differentiate, to stand out and thrive as the confusion, uncertainty, lack of ROI, brands under-performing and lack of confidence in providers prevails,” the Savage Company founder said.
Savage said that change intelligence (CQ) was key in ensuring survival among big players.
“You’re going to be up for it if you have a strong CQ, or change intelligence, the ability to adapt and change is the most important thing that’s going to underpin whether you thrive or survive over the next ten years. We have to constantly re-invent to stay on top,” he said.
Savage suggested that the power of ‘niching’, focusing yourself on one particular skill, can assist when large ad agencies are pitching.
“Today you will see a brief from a client and then you will see pitching for it, One Green Bean, The With Collective, The Hallway, M&C Saatchi, Quantium, Isentia and Fairfax,” he said.
“The concept is this: be absolutely single minded about the one thing that will underpin your success. Get very very focused on building that niche.”
Also in the keynote, Savage disagreed with previous keynote speaker Michael Farmer on the notion of selling.
“Have a look at what With collective has done whether you like them or not. They’ve done a good job over the last five years, exploding their model and expanding what they do and then flipping it for a large amount of money,” he said.
“I know there’s a view that you shouldn’t sell, it’s not quite my view. I think that some should sell, some shouldn’t, and some should sell very quickly.”
Perspective: how many closed in the last seven years?
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This is true, especially in the experiential/event marketing space. The old style agencies from the early and mid 20th century in particular, have refused to evolve. They lumber on thinking their ‘brand’ and hiring some young faces is enough, while smarter more nimble players outfox them at every turn. Stand by for some long established agency names to fall in the coming year.
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