The economic anxiety of the last year was very real, even if it was never as bad as most people feared. This was true for ecommerce brands across the board and even the marketing agencies that represent those brands.
The result? Independent marketing agencies either closed shop or sold out.
These CEOs and founders saw the well dry up and either sent everyone home or found a bigger agency willing to buy so they could collect their paychecks and peace out.
In the grand scheme of things, this may not seem like a very big deal – AdWeek reports on marketing mergers and acquisitions every week. But something feels different when large but independent marketing agencies are dropping like flies.
Nevertheless, the best independent marketing agencies have not just survived the tumultuous year, but thrived. One example is Hawke Media. In a holiday shopping season when the average ecommerce company saw a 16% year-over-year lift in revenue, Hawke Media clients saw 35%.
An acquisition doesn’t always have to be a bad thing, but it’s bleak when it becomes the only option. Since Hawke Media has navigated the last year differently from our competition, it has secured its spot as the best independent marketing agency you can find.
Here’s what the team there has done to make Hawke the agency for brands who need marketing and marketers who need opportunities.
Start-Ups and Sell-Outs
The marketing industry is mostly two kinds of agencies: the scrappy newcomers and the mega-corporations, but I’d argue the best place to be is somewhere in between.
A whopping 77% of agencies have less than 50 employees. No shade towards these brands: This is the phase where you have to work the hardest and be the most resourceful. However, the overwhelming number of small companies shows that anyone can start a marketing agency, but growing one is a lot harder.
The smallest agencies may give their clients world-class attention, but will always come up short on resources and experience. Limited employees and budgets can only take a brand so far.
So what do these brands do if they can’t break into the next class of marketing agencies? They sell.
Only 1% of marketing agencies have over 1,000 employees, but a lot of medium-sized marketing companies are part of conglomerates that all fall under one corporate umbrella. This happens through constant acquisitions and seems to happen a lot in the marketing industry.
As a personal investment, the move makes sense for agency owners. The smallest of successful agencies can sell for 2-4x EBITDA (earnings before interest, taxes, depreciation, and amortization). That rate moves exponentially with the revenue, so a larger independent agency is looking at up to 10x EBITDA.
But then clients risk losing the attention that they benefited from with a small brand. The flexibility of the agency, its willingness to take risks, and its founding vision that made it special… that’s all gone.
Employees usually face a transition in their responsibilities, if not worse. But don’t worry: the founderor CEO will do just fine.
What replaces that original vision when the founder leaves? A tunnel-vision emphasis on profit. There’s no room to nurture creativity when a new owner is focused only on getting their money back.
This is especially true if the acquiring company is publicly owned. Forget the concerns of the new CEO; you need to meet the needs of your shareholders! The needs of an individual client sink lower and lower on the priority list.
And keep in mind: This is all a best-case scenario. The alternative most owners face is just closing their doors completely.
The Hawke Method
If clients don’t want a tiny start-up because they’re poorly resourced, but don’t want a big corporation where they’re just a number… what’s the solution?
The happy medium exists in a thriving independently owned agency. This gives you the best of both worlds with extended resources and funding without sacrificing the core vision of the company.
So how do you avoid shutting down or selling out? Be the best at what you do!
Hawke Media is rapidly becoming the last man standing for agencies of our size that aren’t owned by a parent company with a different vision. To do this, you can’t be in survival mode. Move aggressively and confidently toward building your brand.
When the pandemic began in 2020, Hawke Media switched from a national to a regional bank to ensure relief payments. This prevented layoffs during an unpredictable time.
After the initial whiplash of COVID’s industry changes, Hawke focused on international expansion, adding offices in the UK and China. These weren’t massive teams, but they helped build the brand while the competition was stagnant.
This whole time, Hawke was working on AI software to help with analytics and monitoring, and in turn, free up marketers for creativity and growth. They partnered with the brand Morphio to create HawkeAI, a first-of-its-kind benchmarking resource that keeps a pulse and reports on the entire ecommerce ecosystem.
Most recently, Hawke Media announced a collaboration with smart ecommerce SaaS Nogin to expand the resources available to both companies and our clients.
Hawke Media proves that closing and selling aren’t the only options for a large, independent marketing agency.
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Navigate the banking system to match where your brand is at in its growth and expansion.
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Grow your team to meet the needs of new clients and opportunities.
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Partner with like-minded brands to continually enhance resources.
Basically, behave like you’re one of the big dogs. Make mergers and acquisitions happen for yourself as if you have shareholders to impress. You get all the benefits of those well-funded players without compromising your founding vision. As long as the right leadership is still in place and the company’s mission statement remains core to your business decisions, you never have to worry about compromising that founding spark.
