When it comes to creative industries, big isn’t necessarily best. Sure, large Auckland agencies win a lot of awards, but as Jonathan Cotton discovers, there’s more to the business of marketing than trophies and glitzy gatherings.
What about those smaller Kiwi creative agencies, who may not have the headcount of a multinational, but
who clearly have the skills (and the business nous) to compete alongside the big guns regardless? Does ‘independence’ change the work? What’s so good about being small? And is the clearer air in the regions really better for creativity? NZ Marketing decided to take a trip beyond Auckland’s big-player marketing milieu to discover just what makes New Zealand’s indies tick.
A short survey of the country’s small-to-medium creative and specialist agencies proved what we already knew: New Zealand has a thriving community of independent agencies producing outstanding work. And outside of the larger Auckland marketing factories, it turns out there are as many reasons to set up shop as there are shop founders – it’s not only about the mythical work-life balance.
“It just got to that point where I was working every hour God gave me and thinking to myself, ‘What am I going to do next?’” says Chris Williams, CEO of Hamilton- and Tauranga-based KingSt Advertising. It was 1999, and Williams had spent 15 years living the agency life, primarily at Colenso, DDB and Saatchis, plus a few others along the way. So when an opportunity to buy a small Hamilton agency came up for sale, he jumped at the chance.
“I was born in Hamilton and grew up in Te Awamutu, so, being a Waikato boy, I thought, ‘This is an excellent opportunity. I’ll bring the family back down here and we’ll see how we go.”
The rest, as they say, is history. Now with 20-plus staff and offices in Hamilton and Tauranga, the company has a solid footprint in the area, serving both regional clients (such as University of Waikato and Fieldays) and key Auckland contracts (with brands such as Wendy’s, Lion breweries and University of Auckland).
So does every creative start-up’s story begin with a burnt-out marketing exec? Put it this way – it’s not uncommon.
An accountant by trade – “A tragic mistake,” he says – Managing Director of YoungShand Duncan Shand took an accounting job in Air New Zealand’s accounting department before transitioning to the marketing department. But after a decade with the airline, he needed something new.
“I was sick of what I was doing,” he says. “I loved Air New Zealand, it’s a great company, but I was definitely ready for a change. I wanted to test myself, so I moved to a small biotech company and then on to become General Manager Sales and Marketing at Ihug.”
When Ihug was bought by an Australian internet company and the marketing department moved to Perth, Shand found himself at a crossroads. “I didn’t really want to move to Perth, so I stayed here. I took the money rather than the bag.”
As a freelancer, Shand quickly developed a taste for independence. “I loved the freedom of working for myself and working on multiple clients at different times.” Then as the GFC started to bite and traditional marketing spends began to shrink, he saw the shift to digital as an opportunity to be seized.
“Marketing planning and branding were drying up, but the online stuff was just starting to build,” he says. “It was really at that point that I thought, ‘Shit, this is actually really interesting. There’s so much work here and I can’t do it all by myself.
“I’d used a guy, Ben Young, to do some work before, and over a coffee one day I said, ‘Hey, why don’t we start something here?’ – and he was into it, so we did. I’d never worked in an agency before in my life, but that transition from corporate marketing to freelance and consulting paved the way to starting out with a different kind of advertising agency.”
Now, with offices in Auckland, Australia and the US, YoungShand is focusing its digital and creative chops on high-growth Kiwi companies, with recent campaigns including Oceania Healthcare and digi-health app start-up Tend.
Big isn’t necessarily better
There’s no arguing that larger agencies have an important place in the industry. Big brands are attracted to the surety big agencies seem to provide, and small agencies can lack the varied skill sets and capacity to run multi-channel multinational campaigns. For better or worse, big agencies also set the standard by which others are measured.
“Big agencies have professional HR departments that do help improve the standards and expectations of both employers and employees across our industry,” says Managing Partner at Rainger & Rolfe Jen Rolfe. “They’re also really good at the international awards game.”
She should know. With 20 years of experience in digital, brand and loyalty, and having done time with several large multinational agencies, she’s seen first-hand how important local leadership can be in delivering results to clients. “Don’t get me wrong, big agencies have their place, but I think smaller agencies have an ability to make decisions quicker, better and without prejudice,” she says. “We can take into account local conditions both in running the business and in how we do the business.”
So far, that’s working for Rainger & Rolfe. Specialising in brand, loyalty and activation, the award-winning creative agency’s recent clients have included the Commerce Commission, Texas Chicken and University of Otago.
“Neither are we affected by global head counts, or performance metrics made up by some random person in some lovely overseas office with fabulously expensive artwork, four years ago,” continues Rolfe. “There’s no myopia to a specific marketing tech or media platform – instead, we can make decisions based on what our clients need. We can resource appropriately. We can invest in the relationship. In fact, we care about relationships.”
So, the indie advantage is…independence?
“It’s more to do with the stuff we don’t have to do,” says Managing Director and Partner at Wellington-
based EightyOne Matt West. “We don’t have to report to someone a long way away. We don’t adhere to global policy that gets in the way. All we’re doing is focusing on the work and the relationships.”
EightyOne is part of a vibrant Wellington scene that includes independent start-ups and agencies such as Aro Digital, MBM, Uprise and Wrestler. EightyOne’s recent work includes campaigns for Women’s Refuge, Powershop and the Building Construction Industry Training Organisation.
It’s rare to find an unmotivated small agency owner, says West. “We have to find a way to make things work – our survival depends on it. So we strip out the rubbish and focus on the stuff that matters. I’d always worked at agencies that were chasing their proverbial tails – always a day late and a dollar short. With EightyOne, we thought we could fix that and develop partnerships where our clients genuinely liked us and respected us, as we achieved goals together.”
Toughing it out in a local market has its advantages. While lucrative opportunities (such as government contracts) can be difficult for outsiders to crack into, West says playing a long game in the regions works. “My sense is that businesses move around [between different Auckland agencies] a bit more than they do in Wellington. Clemenger BBDO has had Road Safety since before the millennium. Relationships seem to last in Wellington, but you need to be Wellington through and through.”
Regional opportunities – plus freedom from the interference from offshore whip-crackers – are just a few of the benefits enjoyed by independent agencies, and so is the opportunity to truly focus on relationship building. But do indies actually produce better work?
“I think that’s a bit of a long bow to draw,” says Shand. “If you look at some of the work the big multinationals put out, some of it’s really great work. If anything, I think the indies probably just work a bit harder. If I were a New Zealand brand, I’d be wanting to work with a New Zealand agency, because that’s what we get out of bed in the morning to do. I don’t want to get out of bed in the morning to sell sugary multinational drinks to New Zealanders so that they can pull that money back to Atlanta. I want to feel good about the brands I work for because we’re helping them grow and make New Zealand a better place to live.”
For Rolfe, it’s not so much the size of the agency that affects creative output, but the actual people within the business and how they work together that makes the difference. “Personally, I think it’s all in the culture of the agency,” she says. “It gets really, really hard to have meaningful relationships with the team when there are 120 of them. It’s quality versus quantity, and I think I’m on the quality side. There’s definitely an opportunity for everyone to learn more, do more and take massive steps in their industry knowledge and their career in a smaller agency.”
Indeed, a big part of the indie experience seems to be the challenge and opportunity of building the team. But with a smaller labour market in the regions, nurturing talent is a matter of necessity.
“If you’ve got a client that’s worked with a big agency in Auckland or Wellington and whatnot, they know the measure of a really high-calibre person, so we have to equal that here, and with fewer people to go around, you need to stay really true to that commitment,” says Williams.“We go out and sharp-shoot graduates from the local polytechnic and university and bring them through our way. That’s a strategy that’s working really, really well for us and we’ve managed to get a really, really top-flight team in place at the moment.”
Smaller agencies may be able to take a hands-on approach to nurturing talent, mentoring and developing employees in a way bigger agencies can’t, but it’s not just about securing talent, it’s also about holding onto it once you’ve got it. That means competitive pay, pathways to professional development and creating a great work environment that employees are attracted to.
“You need to build a really strong culture,” says Shand. “You need to get the best people you can afford – and that means hiring the best specialists in every role – and really looking after them. That’s how you get people to go the extra mile to do an unreasonable job, to do extraordinary work. The multinationals are always going to attract talent, and especially younger talent who might be attracted to a bigger brand, but over time, those multinationals have a higher staff turnover. If the call comes in from New York or Paris or London to drop 10 people, then those agencies have to drop 10 people. They’re not in control of their own destiny all the time, so we can make calls they can’t, in terms of not letting anyone go during the pandemic or not cutting down pay. They’re dictated to a lot of the time. I’d just rather provide a great place to work for my team, and pay them a great salary so that they can stay here longer and do great work.”
The New Zealand creative industry is surely a dynamic one, and nothing stays still for long. So what does that mean for independent outfits trying to find their niche? Is there room to specialise? Or are Kiwi independents generalists by necessity?
There is value in specialising where you can, says Shand, but what works for bigger offshore agencies doesn’t necessarily work Down Under. “If you read any textbook on what agencies should do, they all say niche, niche, niche, especially the ones focused on the US,” he says. “America is a very big place and New Zealand is a really little place, so it’s certainly more difficult to niche down in a market like New Zealand. For us, we’ve increasingly decided to focus on ambitious, mid-size New Zealand growth brands, rather than SMEs or bigger international brands, so there are reasons for us to narrow things down. You can tell a better story and you can ensure your services are aligned.”
But as budgets continue to contract, and the importance of running lean increases, what will the landscape of New Zealand’s creative industry look like? Does the future belong to the multinationals, or is fragmentation inevitable? It all depends on who you ask.
“Honestly, I think there will be fragmentation for a while yet,” says Rolfe. “I’d give it a couple of years before we see consolidation – but when it comes, I can imagine it being quite an exciting time. The industry is riding the wave of Covid and the internationals are not so much in a buying mood at present. As they lick their revenue wounds, the locals are just getting on with getting on.”
Williams concurs. “In terms of the industry, I think the big are going to get bigger and stronger. People like us are going to get bigger and stronger, but in a more measured way; however, I think the in-between parts will struggle for growth and relevance in the future.”
EightyOne’s West says that he expects increasing consolidation, “but only because we seemed to hit ‘peak fragmentation’ a year or two ago. Will the big networks survive? Of course they will. Their death was predicted a good while ago. They’ll keep morphing and changing, but I suggest they won’t dominate like they have in the past. More companies will think locally and indies are all set up to help.”
Ultimately, however, survival might be less about industry trends and more about what creative agencies – big or small – actually bring to the table.
“Honestly, I think there are going to be phases of consolidation and phases of fragmentation, some phases of clients moving in-house and phases where they realise it’s all too hard and they want experts to come in and help,” says Shand. “But there will always be room for strong, strategic, creative agencies that can really develop a strong point of view, understand the client’s point of view, and create powerful, emotional ideas that connect with people and help Kiwi brands grow.”
This article was originally published in the March/April 2021 issue of NZ Marketing. Click here to subscribe.