In any given year, the number of agencies who win awards and earn accolades in the industry press totals about 500 to 600, give or take.
These name brand shops paint a picture of an industry in transition (some would say decline). But, limited views provide limited information to base conclusions upon. Here’s a conclusion not based on anything the name brand shops are doing: The agency business is highly dynamic.
As of 2016, there were more than 13,800 advertising agencies in the U.S.
Two-thirds of the agencies in the U.S. employ fewer than five people.
Eric Kallman, co-founder and creative director of Erich & Kallman, is a big believer in the power of small teams.
Writing in Ad Age, Kallman suggests that a talented creative director with one art director and one copywriter can generate ALL the ideas needed to satisfy a client.
He also predicts that the best agencies of the future will be small-to-medium sized businesses.
It’s inevitable as advertising evolves that, with a few outliers, most great creative shops will consist of about 50 people, not hundreds. Marketers will still pay a premium for great creative work, but not nearly the rates that some are paying now. Agencies won’t grow vertically, they’ll grow horizontally. Audiences are growing smaller and more segmented, but there will still be a demand for effective, breakthrough creative advertising. It will just be smaller groups of people with a higher concentration of talent providing a better service and product.
Many of these “smaller groups with a higher concentration of talent” are celebrated by Ad Age’s Small Agency Conference & Awards program, now in its ninth year.
This year, Butler, Shine, Stern & Partners of Sausalito, California took top honors.
I love that Ad Age has a category for the truly small shop. This year, JohnXHannes, New York was named Small Agency of the Year, in the 1-10 employees category.