In the last five plus years, we have seen lots of acquisitions and mergers in the ad world. Most of them, if not all of them, happen between big agencies and medium ones or even just big ones. Rarely do we see the big ad agencies interacting, collaborating or even partnering closely with ad startups. Although we do have lots of ad startups out there.
At a time where the entire agency world, and specifically the ad agency world, is suffering when it comes to growth and healthy profit margins, one would tend to think that collaboration would be high on the agendas.
However, it seems that big ad agencies are just happy following the model of acquisition to show increases in profitability and revenues in general. What is even more interesting is that those acquisitions, most of the time, end up not changing anything except the numbers in the books. If anything is true, they tend to limit the ad startup being acquired; hampering its growth and in some cases diminishing its share of the market, sometimes even creating a talent exodus.
What is interesting, is that both startups and big ad agencies would improve if they collaborate. Ad startups and big ad agencies bring two distinct and equally integral skills to the table, while the first is fast, nimble and to an extent more creative; the later is much better at handling bigger projects and campaigns, especially on a regional or global scale.
Ad startups must be agile and adapt their value proposition several times until they get it right. Big ad agencies take a different approach and often end up launching things they can make and fit into a client’s brief. I'm not saying there is no creativity and they are just reproducing or recycling old work, but they don’t get out of their comfort zone and rarely experiment and do things differently.
Big ad agencies can assist and gain access to ad startups via early-stage funding and later-stage mergers and acquisitions. However, successful collaboration between ad startups and big ad agencies must go beyond financial deals. It must deliver on both companies longterm objectives and it must deliver equally to the mission of both the big ad agency and the ad startup.
Unfortunately, what we have seen most of the time is a short term solution for a longterm problem. An acquisition that doesn’t change the DNA of the big ad agency will just fail in the longterm. This is because the main problem in the big ad agency world is how these agencies are structured, how they evolved to be what they are, the type of resources they have and how much they are disengaged from today’s real time marketing.
When big ad agencies try to engage with ad startups, an embracing approach focused on longterm change is key for longterm success. Collaboration is the first step in the process.
The author of this post will be speaking more on this topic at Step Conference in Dubai from April 4 to 5.
This is a StepFeed Community post, written by a guest contributor. Jad Hindy originally posted this article on LinkedIn . If you’re interested in contributing to the StepFeed Community, please contact [email protected].