• by Tim McHale , June 21, 2002

Maybe small is beautiful. I’ve been thinking about that lately, as I research the small creative shops that serve the interactive business. My 20-year career has been spent at creative and/or media agencies with billings in excess of $100 million annually. So working with smaller numbers in billings and employees astounds me.

Here’s an example: a young, dynamic entrepreneur who came from the big agency business much like myself – we’ll call him James - runs a five-person interactive shop out of the Hamptons in Eastern Long Island. The delightful surprise is the caliber of marketers who send business his way - some of the most prestigious banking, finance and packaged goods accounts that are normally associated with big agencies.

I asked James what he thinks the difference is between big shops and small shops and how he has been able to establish himself compared to the well-known Madison Avenue ad agency brand names.

He looked back to the success of the first creative wave in the sixties, which was fueled by the confluence of cultural change, technology (yes, color TV was new and cool once) and a group of mavericks that shattered old ways of selling. The big names of that era did their best work in small teams working closely with their clients. Their success, of course, meant that their businesses grew, but only as long as this group of entrepreneurs was able to maintain work environments that continued to improve the state of advertising industry wide.

These shops eventually outgrew their founders. Many became part of the behemoths we see crawling the earth today. Without surprise, many of their corporate websites claim they continue to embrace the values of their founders, but, according to James, that is almost impossible. Corporations have no memory. How could they? Their size and reasons for being have moved away from focusing on client needs and toward serving the needs of shareholders.

James says the genius of a small group from five, ten or twenty years ago is still at work on accounts today. Most of that talent has either left to start their own place or has been laid off, in which case they’ve probably started their own place as well.

When cornered, most of these people admit that it’s almost impossible to get anything of merit done within these bureaucracies. The hurdles are overwhelming and include:

• Vested interest in traditional profit centers; • Careerism of longstanding employees; • Dense, slow moving, suffocating hierarchies; • The “Ego tax” where everyone puts in their 2 cents; and • The cost of maintaining infrastructure.

It wasn’t long ago that these problems had to be endured if marketers wanted to get “big” things done. It wasn’t long ago that it took a dozen people and a couple of outside vendors to produce one print ad. And it took months to go from concept to camera-ready. People actually used wax to hold the ad together when they did a “mechanical” back then.

What changed that? Technology, of course. Now it takes only 2 or 3 people (one if you have an art director who can write) to do the same amount of work. Actually, it’s 10 times the work in 1/20 the time, all in-house.

Again, technology was the deciding factor. I’m talking specifically about the “idea multiplier” or… The Internet.

James believes this is where the next creative wave will be launched. The Internet hiccup we just experienced and the reports of its demise were, much like Mark Twain’s death, “greatly exaggerated.” The Internet along with the integration of traditional media will be the “idea multiplier” of marketers in the decade to come. And, once again, this revolution will be lead by small companies (A-teams) that are multidisciplined, highly motivated, innovative and not risk-averse. But, this time around, this group will not have to, as Jay Chiat once said, ”see how big they can get before they suck.”

With the Internet and other technologies, small creative firms will have all the tools they need to build powerful brands without having to construct stifling bureaucracies to support them. They will not have to get big to do big things.

Think about it. If you have kids, where do you want them to go to school — small private schools with small class sizes, right? If you want to go out for a great dinner, where do you go? A small restaurant where the owner is also the chef, if you can get a reservation. If you want to grab market share, attract new customers and grow your business, where do ya gonna go? Small shops, of course!

Small shops don’t have to worry about allocating resources to keep their 35 $50 million TV deals fresh. Small shops have already figured out how to price themselves relative to interactive media, or else they wouldn’t be around today. It’s going to be very difficult for a large media agency to justify moving $100 million out of traditional and into interactive without asking the client to increase their servicing fee by 500% or more per media dollar.

For interactive media, small shops are particularly effective. Interactive media is very labor intensive. There’s no getting around that. What few technology and IT people there are still on the payroll at big shops are the A/V guys who help the staff turn their computers on and off. Few, if any, large shops are focusing on new technology or data analytics products entering the market every day, which makes interactive more, cost efficient to manage.

Also, in small shops, senior management is much more likely to be more intimately involved with each component of the deal. Most senior media execs at the large buying shops have spent their entire careers in traditional. Interactive makes them nervous. They’re a fish out of water. They’re less likely to know the difference between serving vs. hosting, let alone know the top management at various ad networks or portals.

Finally, small shops are most likely “over servicing” their precious few interactive clients still alive and marketing, probably with some sort of CPA deals, which over time lets the interactive media buyer truly understand what the lowest cost in the market is versus large shops, who are probably servicing small branding-based clients.

Tim McHale is CEO of Underscore Marketing. Email him at tim_mchale@yahoo.com