Agency Stockholm Syndrome: 5 reasons why network agencies aren't working for your global brand

David Ogilvy, Leo Burnett, Bill Bernbach… There’s no denying that the advertising industry was built by great minds. Visionaries. Small independent agencies that grew into the huge networks we know today. And although the Mad Men era clearly had a strong impact on the way we consume and market to consumers, it’s fair to say that the heyday of network agencies is over. In fact, in the past 4 years, $25 billion was wiped off the market cap of the big advertising companies – WPP, Omnicom, Publicis Groupe, Interpublic, and Dentsu (source: Forbes)

And yet, too many brands remain captive to the large advertising holding companies, suffering from what we call Agency Stockholm Syndrome. Of course, they would argue differently while brandishing a lion-shaped statue – but here’s why the big network dinosaurs are unfit for the new era of global advertising (and why it’s time for global brands to move on).

1 – Death of the big idea

Network agencies tend to base their campaigns on a “big idea”, i.e. an award-winning, mind-boggling, trumpet-blowing idea that will reach the heart of audiences. At least, that’s what you’re being sold. This big idea approach worked well when all you had was about 5 channels. But it’s a lot trickier in the digital era. News alert: people hardly watch live TV anymore. TV-first thinking is obsolete. And let’s not mention the decline of the press. Even social media is becoming more complex, with new players coming into the mix and each channel becoming increasingly specific in its use. If 2020 has taught us anything, it’s how fast our world is shifting to digital and how quickly we’ve learnt to adapt. More than ever brands need to be strong across all key platforms – especially in the digital world – with messaging and creative tailored to specific channels. An overarching idea is still important, of course, but the idea must be adapted for each channel to be as impactful as possible, with all channels strategically thought through as part of an end-to-end consumer experience.

2 – The bigger picture

Network agencies often sell a vision of borderless creativity through their global web of agencies. But let’s hone in on this claim. While they are composed of a large global network of agencies, most local agencies work separately with their own set of clients. Each agency needs to make as much profit as possible, so their priority isn’t to work collaboratively on global campaigns but to sell as much as possible individually. And so, what’s sold as a global campaign is often the result of poor collaboration between the network’s local agencies. A good domestic campaign at best.

Moreover, while many holding companies love to celebrate diversity in their campaigns, the reality is that internally they’re a rather homogenous bunch – mostly middle-class/white/male dominated. Time and time again they’ve pledged to become more inclusive. And time and time again they’ve done nothing. They can claim to be as woke as they want but the reality lies in facts. Diversity has become a crucial opportunity for brands, so it’s important that they partner with agencies that understand the importance of getting it right.

3 – Not cut out for the challenge

With scale comes operational complexity. Global brands often struggle with this issue. And so do advertising giants. They must manage more clients, more briefs, more assets, more stakeholders… and while you’d assume that their size allows them to manage complexity, bigger isn’t always better when it comes to delivering global advertising campaigns. Bigger means more internal stakeholders, blurred communication lines and a lack of leadership. Bigger means more rigid processes. The nimble, small agencies of Madison Avenue turned into corporate monsters with a frightening layer of bureaucracy.

Moreover, these holding companies were not built for the new era – their ways of working are a legacy of twentieth century advertising. They’re not set up to deliver scale. Nor do they fully grasp how digital our world has become and the importance of tech. In fact, they are being replaced by the big tech companies who effectively control modern-day advertising. Ad giants seem too caught up in a romanticized vision of advertising to make the necessary changes and adapt for the future.

4 – Lack of Independence

Creativity and financial imperatives don’t go hand in hand. Brand building, creative effectiveness and strategic insights all require long-term thinking and exceptional talent. But in the case of holding companies, they have to systematically balance their creative capital with the demands of shareholders. Clients’ needs vs the stock market. This leads to any creative drive or strategic thinking being overridden by short-term financial pressures. And this short-termism explains their obsolescence. Adapting to the new era requires long-term human and technological investments and a vision that goes beyond the next financial quarter.

5 – High price tag

Now onto the big question – are network agencies worth the high price tag? It depends how you measure their effectiveness. If what’s measured is the number of awards and accolades, then sure, they are effective enough. However, if you measure their capacity to deliver a global brand experience with a consistent impact across all key markets and channels, then chances are they won’t meet your expectations. If you’re looking to work with experts that understand the new era of global marketing, then they’re probably not the right fit.

And their costs are astronomical for a reason. Their heavy corporate structure comes with high overheads. Their financial ties lead them to increasing margins at all cost. Their “big idea” model is costly in terms of talent and time. Of course, the shiny awards and legendary past is sold as part of the package, and brands often feel like they’re working with the best. Creativity with a big C comes at a cost. And yet it’s time for brands to look past awards and into the future.

At Freedman, we do things differently. We’re an independent agency meaning we’re fast, flexible and affordable. Most importantly, we’re not tied down by bureaucracy. It’s not about the ‘big creative idea’, it’s about the ‘global creative idea’ that resonates with audiences at a local level. We’re digital first and data driven, using local insights to continually optimise our clients’ local content across every screen, everywhere. And when it comes to the complexity of modern global marketing – more formats, more channels, more markets – we’ve got it covered with our vast network of in-market talent, our scalable production services and our dedicated client teams. We know that the new era of global marketing has arrived, and we’re ready for it.