Can a Collective of Top Boutique Agencies Create Business Value for Brands? CMOs Weigh In.

January 21st, 2017 by George Sanchez

There are three primary groups of people who have skin in the game when it comes to the 49co: agency collective. Of course, there are the Agency Partners, who lean on our business acumen, network of Biz Dev Pros and direct relationships with brands to generate new business. The Biz Dev Pros, in exchange, get to sell against a toolkit of specialized services. Finally, there are the brands (buyers) themselves. What do brands get out of working with a collective of boutique agencies instead of a full-service agency of record?

We interviewed eight CMOs and senior brand managers to validate our hypothesis that a collective of specialized Agency Partners can be of unique value to brands large and small. Their answers enlightened us and affirmed our assumptions. More than anything, CMOs and brand managers want to work with the best talent, and we know that the best talent is leaving big agencies in droves. Boutique agencies on the other hand, represent fresh, innovative, sector / audience specific thinking, without the overhead costs of a more corporate shop. Lastly, great insight or a breakthrough creative solution does not need or require scale!

But how do CMOs and brand managers navigate this increasingly fragmented landscape of independent agencies? In our research, marketing leaders admitted to relying on trade publications, pr-driven awards, word of mouth and, most shockingly, Google to source new boutique agency talent. The 49co: collective seemed attractive to them as a solution to what is a highly inefficient process. Brand managers could meet with one agency collective lead instead of dozens of individual principals, save massive amounts of time and match the right business problem to the right combination of specializations.

But enough from me. Read excerpts directly from the CMOs and brand managers below. Because these interviews were presented as private research, we’ve redacted any personally identifiable information.

On the recency of the boutique agency phenomenon:

I’d say 10 years ago, it was a bit of an uphill climb. In the past five years, we’ve seen more boutique-y agencies get on our radar and I’ve seen them in pitches.

On whether or not the size of the agency factors into deciding who to work with:

I would go with the agency that I thought had the best skill set and motivation to do the type and quality of work that I think needs to be done. I wouldn’t care, if I really saw tremendous talent, if it’s a three-person firm breaking away from a large agency or a really well-known group, I would go with them in a heartbeat. But I would have to have some confidence that they really have the skills and so forth.

Brands are also noticing a trend in where top talent is choosing to work:

A lot of agencies are going through major consolidation to the big players and there’s two variables. As the big players pick up some mid-sized and larger companies, some of the talent didn’t like working for the larger multi-billion dollar conglomerates and left, and two, the agency had this overhead structure that made you feel like “now I’m working with a corporation that is bigger than me.”

And so if you can bring the collective together where you can show that these are the guys who don’t want to work for the big agencies but they’re rock star talent, you can help make use of them from a business perspective and from a client mindset. Because typically you get the creative folks and the innovative folks who are into creative and innovation for creative and innovation’s sake and not necessarily for business, so someone has got to bridge that.

On navigating the increasingly fragmented market of boutique agencies:

It’s extremely fragmented and understanding who can do what and why [is difficult]. If someone can help bring clarity to that, that is a value add that is needed. And you’ve seen probably the one-pagers when you look at digital ecosystem and there’s 500 different logos of companies that are looking in the space that are potentially all reaching out to clients. It’d be a full-time job trying to figure that out, let alone run a business.

How a marketing lead would typically go about finding a high-caliber independent agency:

I wouldn’t know where to begin. I honestly wouldn’t. I guess, it’s sad to say, I would defer to Google. I would probably defer to Google and do some Google searching. I actually get a trade publication… I think it’s called Pack Design. I’ve got a couple trade publications. When I have time, I read through them and see what inspires me and try to follow up and see who is the agency behind that. To be honest with you, that would be completely inefficient. How would I know whether that is a true reflection of the right sample size? How do I know that that doesn’t happen to be the examples for that month? How do I know that? Just because one agency wasn’t featured doesn’t mean they didn’t have some great work. They just didn’t make the magazine that month. I end up being lost because I don’t know if I’m narrowing in too much or if I’m casting too wide of a net.

Why the agency collective model would be perfect for brand managers at small companies and large corporations alike:

My first inclination was to think this would be perfect smaller companies, startups, entrepreneurs, who have early stages infancy of their lifecycle, just starting to get off the ground and do some commercialization of their products and they don’t have a big staff so they need someone to help get this type of process. I think it’s perfect for them. I think it’s perfect for other companies that just don’t have the resources.

I also think you would be pleasantly surprised that even the larger companies might find it incredibly useful because increasingly large companies are realizing that in order for them to be able to compete in a hyper-competitive environment and be able to drive growth, they need to start to channel the soul of a startup and so in order to that, what does that look like? You need to act like a startup. Well how does a startup work? They think in a little bit more of a lean way and they draw upon a different set of resources, think differently, etc. The lead design strategists at some of these major companies may end up being your customers. Products that are in mature categories that are in desperate need to think differently or else face being extinct, you might actually be surprised at the reception you may see and how open people may be to thinking differently.

Why working with boutique agencies, who don’t have the same overhead costs of full-service firms, gives brands a pricing advantage:

I’m very open to working with the mid-sized or even the smaller agencies depending on the situation. So for example, when we were working on [this millennial-oriented food brand], we wanted to do some PR work, so we brought in the global marketing group and they brought in [big-name PR agency]. They came in and generated a $500,000 proposal for what we thought was $75,000. In our mind, what they were teeing up was $75,000 and they came with a $500,000 proposal. It was unbelievable. They came to one meeting and they charged us twenty, thirty, forty grand and we said, “No, we’re not going to pay that. We never agreed to pay that when you came. You need to get our authorization if you’re going to charge us twenty grand.”

The agency of collaboration model and why large holding companies aren’t sexy anymore:

I like the idea of the collective. It’s almost the anti-agency. Instead of working with the large conglomerates, it’s like, “OK, these are guys we can truly bring on.” They’re not just buying boutiques and they’re losing their flair. They’re a collective a boutiques that still has the quality of the boutiques and the creative and innovation that you can’t get otherwise.

How meeting with the head of an agency collective can save time for brand managers:

Something unique is… obviously [brand managers] get hundreds of requests. The collective can say, “We only want one hour but we’ve got access to 50 kind of high quality boutique agencies,” so instead of doing 50 meetings, the [agency collective business development representative] can do one meeting, do a better assessment of what your needs are, get to know whether we will provide the benefits to you that will make your life easier. And so to me, that’s intriguing. You can create a wedge where it can help them get in the door with folks.

Finally, the ultimate co-sign:

I start a new job tomorrow and I would like to get the name of your collective and whoever this curator is because I might be ready to tap into it very quickly.