Independent agencies warned against “race to the bottom” as margins tighten

Independent agencies need to be clearer about what they stand for, more confident in their pricing, and smarter about partnerships if they are to protect margins and retain clients in a tough, ever evolving market.

That was the central message from Prolific North’s latest roundtable, held in association with Print.com and BuyMedia at Colony, Silk Street in Manchester last week.

Hosted by Prolific North commercial director Ben Waterhouse, the invite-only session brought together senior agency leaders from across the North to explore how independents can drive stronger profitability and client retention amid tightening budgets, rising expectations and an increasingly complex channel mix.

The discussion featured the likes of Rob Shaw, CEO of HUB; Martin Oates, commercial director at Pixelbuilders; Jen Woolley, director and co-owner of TWA Marketing; Sean Dwyer, managing director of Door4; Nicola Docking, founder and managing director of Poke; Steve Byrne, co-founder of As the Crow Flies; Alex Duthie, head of strategy at PushON; Stephen Kenwright, director of Stephen Kenwright Ltd; Rachel Lofthouse, managing director of Fox Agency; Hannah Evison-Frost, managing director of Trunk; Rob Pollard, managing partner at M3 Agency; and Paul Hadfield, brand strategy director at BIG Partnership.

They were joined by Fergal O’Connor from BuyMedia and Cadie Mayor, Fiona Robinson and James Scheck from Print.com, who helped shape the conversation around media ownership, print and building more resilient commercial models.

“If you wait for the brief, you’re already behind”

The conversation opened with client retention and whether independent agencies are doing enough to move beyond delivery into true strategic partnership.

For HUB’s Rob Shaw, proximity to clients is both the defining strength and the biggest responsibility of independents.

“If you’re a network, your job is spending the marketing director’s budget,” he said. “If you’re an indie, your job is spending the owner’s money. Independent agencies have to work really hard because they’re closer to their clients. We understand the value of a pound and what ROI really means.”

PushON’s Alex Duthie said that closeness often creates stickiness but also fragility.

“They buy into an owner or someone who was part of that sales pitch, and that person tends to stay part of the team,” he said. “But if people leave, that can become a crisis point for the client. They were used to someone who knew the business, and suddenly it is a completely new team.”

Trunk’s Hannah Evison-Frost pointed to a divide between client types.

“With big brands, I honestly don’t think loyalty exists,” she said. “They like the idea of working with indie agencies because they can get a lot of value out of them, but there is always another agency that would like to take the work from you.

“But when you are working with owner-operated businesses or smaller brands on the way up, there is more alignment. You can align in terms of values, the journey you are on and the business challenges you face.”

For Pixelbuilders’ Martin Oates, the key is getting closer to the decision-making process before it formalises.

“If you wait for the brief, you’re already behind,” he said. “We are big believers in staying in the right lane. We know our strength is in design and development, and we will partner with the right people when something sits outside that.

“The feedback we get from clients is that they value the honesty. It is about being able to say: ‘No, that approach is not right.’”

Collaboration over “white knight” thinking

That idea of honesty and collaboration ran through much of the discussion.

Poke’s Nicola Docking said agencies need to move away from the idea that they are there to “fix” a client’s problems.

“We never come in as the white knight rescuing the brand,” she said. “In-house teams can take things a long way themselves. They are often bringing you in for top-level expertise.

“It has to be a collaborative relationship where you are both working out the right approach. We build a big discovery session into anything we do, and a big part of that is them learning about us, us learning about them, and together working out what the right approach is.”

BIG Partnership’s Paul Hadfield said that shift is also being driven by clients themselves, who increasingly want simplicity.

“Agencies work less in silos now, and brands want less of that,” he said. “They don’t want 15 different agencies for 15 different channels. They want the same couple of agencies doing the same thing and making it work harder.”

Rachel Barker, of Twisted Logic Consultancy Limited, said that means agencies must position themselves as advisers as much as suppliers.

“Clients are buying your services, but they also want your advice and recommendations,” she said. “Whatever channels you end up choosing, you need to show that you understand their brand, what they are trying to do, and bring your advice and expertise into that relationship.”

Building the right ecosystem

BuyMedia’s Fergal O’Connor pointed to a structural challenge, with independents under pressure to offer more but without the scale of network agencies.

“The danger is that some independent agencies are losing clients as they scale, because those clients start looking for more data, more analytics and more market mix modelling,” he said. “If the independent agency can’t provide that, the retention problem is that the client moves on to a bigger agency.

“The key is building an ecosystem around the independent agency. If businesses can collaborate and bring in the right technology, consultants or partners, they can service more of what the client needs without becoming a big agency.”

That balance between capability and focus resonated around the table.

“You can’t have a specialist team of one,” Rob Shaw said. “If you want to genuinely offer those services, you’ve got to build scale. But the skill is also knowing what you’re good at and what you’re not.

“It is tough at the moment and nobody wants to lose a client, so agencies can start saying yes to everything. You need to be brave enough to say: ‘That is out of our skillset,’ and bring a specialist in.”

NIcola Docking agreed, arguing that clarity builds credibility.

“We are very black and white about what we do and don’t do,” she said. “The reaction to that has been really positive. People accept the honesty. If anything, it bolsters trust, because if you are willing to say you are not good at something, then you are clearly standing behind the things you are good at.”

“Print has its place”

With Print.com supporting the session, the role of print in modern campaigns also came under scrutiny.

Door4’s Sean Dwyer said its effectiveness comes down to planning, not nostalgia.

“If you are doing the planning right, all channels have value,” he said. “Print has its place. It is just where and who is deciding that. There is a skillset in understanding for what sector and what demographic print has its place.”

Nicola Docking added that print can deliver something digital cannot always replicate.

“There is a misconception when people say print is dead or dying, and there is certainly a misconception that digital is always the better choice,” she said. “Sometimes the physicality and quality of print answers the objective. When people are handing it round, feeling it, touching it and actually engaging with it, it achieves something that a digital version would not.”

Rob Shaw suggested that tangibility may become even more valuable in an AI-saturated landscape.

“There is a huge amount of authenticity to print in a world where people are asking: is that really that brand, or is it fake?” he said. “Physical media has a space there.”

Print.com’s Fiona Robinson said perceptions lag behind the reality.

“People still think of dusty machinery,” she said. “It is very much not that anymore.”

Moving beyond vanity metrics

The discussion also turned to measurement and a shared frustration with superficial reporting.

BuyMedia argued that meaningful insight depends on access to real business data.

“If clients give us the revenue lines, footfall, calls into call centres, or real business metrics, you can match that against media spend across different channels and build proper insight into what is working,” Fergal O’Connor said.

“Otherwise, you are just using vanity metrics. You can say you got a million more impressions, but what does that actually mean to the business?”

Martin Oates said the same applies across digital delivery.

“Vanity metrics are useless,” he said. “They look great in a presentation, but CEOs and CFOs care about the bottom line. It is not about the channels or the medium. It is about the output at the end and how you impact that.”

Jen Woolley said it requires earlier, deeper conversations with clients. “I want to know where the business is going in the next 20 years,” she said. “Do they want to sell? Do they want to be private equity owned? What does success look like? Our job is to help work towards that.”

Holding the line

If there was one area where pressure is most acute, it is pricing.

For Rachel Lofthouse, confidence is the starting point. “You have to value your proposition,” she said. “You have to know you are good and that this is how much your time and expertise costs. That is difficult when someone says they can go with you if you do it for a little bit less.”

Sean Dwyer warned against the temptation to chase revenue at any cost.

“Desperation kicks in,” he said. “If you can be confident in your proposition, you can hold the margin because you are confident in what you can do.

“We used to talk about ‘trash for cash’ – work you take on just to keep the lights on. We say no to that now. If a job is not suitable to our proposition, it is not right for us.”

Steve Byrne said agencies need to invest more in commercial capability internally.

“Confidence over pricing is massive,” he said. “How many people spend time with their teams helping them understand how to negotiate on price, expand the ask, ask value-based questions and give away as little margin as possible?”

He added: “A valuable half day for any leadership team is to look in the mirror and ask: why should anyone give a shit about working with us?”

For M3’s Rob Pollard, the shift is already happening. “We are not selling time anymore,” he said. “The tools available mean we can get to working prototypes very quickly. The insight, the knowledge, the value, the partnership, the strategy and the creative idea are the things that are valuable to the client now.”

Across the session, there was a real sense that independent agencies are under pressure but far from powerless. Their closeness to clients, agility and collaborative mindset remain key advantages. The challenge now is turning those strengths into a more disciplined, confident and clearly defined commercial model.

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