#AdForumSummit Day 4 & 5: Europe’s biggest indie agency is in 16 countries
by Johanna McDowell (@jomcdowell) NEW YORK CITY: Last week, on Day 4 of the AdForum Worldwide Summit, 23–27 April 2018, we pitch consultants met with Fly, Serviceplan, the 4A’s, The Escape Pod and The Media Kitchen, and then on Day 5, the last day, with MDC and R/GA.
This is an independent agency in New York with a good track record. The name originates from the idea that it had at the beginning, which was to fly under the radar until it was ready to expose its work. The agency is very proud that it was intimately involved in the highly successful launch of the Amazon Kindle some nine years ago. There’s a very experienced team with great chemistry between members— always good to observe in an agency. Happy consultants walked away with a gift bottle of Prosecco, one of the brands that Fly looks after and with some specially designed bottles.
This is a very impressive, German-owned, independent agency — the largest in Europe, with 4 100 employees in 16 countries — and probably one of the first advertising agencies to be fully integrated, including media planning and public relations. It is the only global independent agency group among the top 20.
Where does the name come from? Serviceplan was named by the founder, the father of the current CEO, when he went to his first clients with a service plan comprising all the resources that the client would need in order to have successful advertising and marketing campaigns.
The agency demonstrated its four Is — innovation, independence, integration and internationalism — through its various case studies for clients such as BMW, Adoptify ( adoption of dogs) and ABB. Its offering is the House of Communication, which incorporates all aspects of its business in most of the countries in which it operates.
With revenues of US$477m per annum and offices in Germany, France, Belgium, Netherlands, Spain, Switzerland, Austria, Italy, India, Middle East, Korea, China, Russia, Poland and Ukraine, it is now opening in the US with offices in Austin, Atlanta and New York. It offers a fully integrated service but, equally, can work on a project-to-project basis, depending on client needs.
A dynamic team which seems able to overcome the typical cultural issues that beset agencies which operate in many countries.
4A’s (American Association of Advertising Agencies)
Following a good session last year at the summit, AdForum revisited issues raised previously, such as the agency review process (simplifying it to make it faster and more efficient), and relationship management practices between clients and agencies. The group discussed the growth in project reviews as opposed to whole client reviews, a practice which has seen an increase in recent times.
Client conflict (ie similar categories and brands within the same agency) is becoming less and less of an issue; it’s more important for clients to be able to access the right expertise and they will put up with their competitors being in the same agency, provided this is well-managed. We heard the same from Wunderman in 2017 in New York.
The 4A’s recommends that a relationship audit take place after the first 100 days of a new relationship — and I agree that this is very advisable — in order to tackle any early issues that happen during the first three months after agency appointment.
The Escape Pod
More refugees from the networks, this is an agency that has been in business for 10 years with 92 people in Chicago. Advertising, digital, experiential and post-production, this agency can do everything, including build. It’s strong at new product launches and demonstrates diversity in its top team of partners, who all own the business — this is a purpose-built agency for speed and efficiency, removing unnecessary cost layers that are often associated with the bigger holding company agencies.
The Media Kitchen
A high-energy media agency with very strong programmatic, social and mobile media skills, this group of 120 people is spread across five offices within the various creative agency offices of KBS. With offices in New York, Minneapolis, Montreal, Toronto and London, The Media Kitchen works with many of the creative agencies within MDC.
Trends that it is observing:
- By 2020, 50% of all searches on the internet will be voice-led
- We touch our mobile phones an average of 2617 times a day
- Google and Facebook account for 99% of all advertising growth
We heard about an app called AppAnnie, which checks what apps people are using, and solving segmentation with signals.
Despite a very long day for us consultants, The Media Kitchen was a serious highlight of the week.
This group of agencies sees itself as a federation of agencies with 52 agencies and 30 reporting units. The principle of the network is that the agencies remain owner-managed, although MDC takes a 51% stake, and this means that the owners retain their interest and do even better than they would have done on their own.
Some of the world’s leading creative agencies are here such as Anomaly, 72andSunny, Forsman Bodenfors, CP+B, Doner, KBS, and they rate the network as being one where “[t]he best agencies want fuel, not control, from a holding company. MDC gets this,” as Carl Johnson, founder of Anomaly, says.
We would like to have seem more work from the agencies but, as there are 52 of them, we settled for an excellent film which captured highlights of commercials and work that these agencies have produced.
MDC told us that its top 10 clients in the federation work with at least four of the individual agencies in the group.
MDC has also invested in an impressive array of PR agencies, including Alison and Partners, Exponent, Hunter PR, Veritas, Sloane & co, to a name only some. All of these investments are for long-term yield and purpose, with very few failing as a result of the careful way in which the MDC group manages at a distance, yet effectively brings and creates opportunities within and among the various agencies.
MDC is active in 95 international markets using implementation partners where it doesn’t have agencies eg South Africa and other African countries. It also has MDC Ventures, investments in adtech companies which will help and support the needs of the agencies within the group.
We saw this agency 12 months ago and, as always, it has been extremely busy with a lot of new work, continued innovations and clients. An AdForum favourite, R/GA made some observations that intrigued us:
- The ad industry is in decline
- Clients are building more and more capabilities in-house
- Audiences are declining in the media that has traditionally been supported by advertising
- There are two economies — legacy brands which compete with disruptive innovators
- Companies that predate the digital revolution
- Companies that now have asymmetrical competitors eg Amazon competes with Walmart, Uber competes with owned automobiles
R/GA sees opportunity in all of this (as we would expect) and it helps companies and brands grow by enabling them to change. R/GA itself has reinvented itself five times every nine years; it knows how to disrupt itself.
With transformation at speed being key, R/GA showed us case studies for Next Bank, PepsiCo Life Wtr, LaCroix Bubly, SONIC, Carnival Cruises, Jet.com and Siemens. All of these demonstrated the agency’s ability to develop, design, build, create, market and track products and brands for clients. An extraordinary success story that continues to grow and innovate year on year.
A fitting way to end a brilliant week of highlights, this agency has always scored the highest accolades with the AdForum consultants.
And, so, it ended.
- #AdForumSummit Day 3: DAN, IBM iX, Phenomenon & Havas
- #AdForumSummit Day 2: Reinvigoration through PR, gender balance trends
- #AdForumSummit Day 1: Pitches now happen in-house at DDB
- Columns | The AdForum Summit – Johanna McDowell
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), which is partnered with the AAR Group in the UK. She will be presenting detailed and in-depth reports and case studies on each agency from this 2018 AdForum Summit at presentations in Johannesburg and Cape Town in the next month.
— One subscription form, three newsletters: sign up now for the MarkLives newsletter, including Ramify headlines; The Interlocker, our new monthly comms-focused mailer; and Brands & Branding, launching soon!