Insights from the UK’s highest performing agencies

In our recently published UK Agencies Benchmarking Report, David Rowlands spoke with a handful of this year’s highest performing agencies, seeking to understand how they performed so well, what challenges they foresee this year, and more.

Each year, the UK Agencies Benchmarking Report reveals the fastest growers in the UK agency marketplace, using YoY growth in gross income (GI) as the leading indicator of success. Whilst there’s nothing wrong with this of course, there’s an inherent favouritism in it, as the bigger agencies will invariably bring in the largest sums of money.

As a result, we have also included a table with the UK’s ‘rising stars’ – those agencies that might not be generating the highest annual gross incomes overall, but, as a percentage of the previous year’s income, have shown the highest growth.

So, with that in mind, we spoke to both the fastest growers and rising stars across the marketplace to understand just how they’re doing so well, what challenges they’re facing, and how they see the B2B space currently. As a reminder, financial results were taken from the most recently closed financial year at the time of completing survey. As a result, most agencies included in this report are using financial information from the financial year ended December 2019 or March 2020 – in other words, before the pandemic.

Drivers of success

Modern was the standout rising star this year, posting a YoY increase in UK GI of 156.1%. So, how did this Bristol-based agency do so well? In an email exchange, Stuart Ray, director and founder, explained. Over the course of the last 18 months, the agency has been carrying out a lot more marketing, releasing guides on B2B digital leadership, B2B transformation, B2B performance marketing and campaigns to promote Pardot services. This has helped the agency to bring in more leads, and positioned the agency strategically.

“Thus,” Stuart claims, “we created more opportunities with VPs who need frameworks and approaches that can be embedded into their business or scaled across markets or verticals. So, when we secured them as clients, the work grew very quickly as they saw the value at a senior level.”

More generally, Stuart added that Modern is managing a significant amount of PPC globally for one particular client, and the scope ballooned. As a result, Modern saw a lot of growth from work associated with this client.

Nicola Ray, founder and CEO of Modern, added that this growth has continued during Covid-19, stating: “We’ve seen rapid growth over the last 12 months, both from strong client relationships, and programmes secured before Covid-19 hit. Right now, clients are looking for flexibility to scale activity from pilots to EMEA programmes systematically and easily. Our frameworks, and ability to respond quickly to the changing needs and demands being asked of our clients have been a source of reassurance for them.”

Inside Marketing made the cut for both tables, reporting a UK GI YoY increase of £1.2 million, or 43.1%. For Andrew Remes, co-founder, “Our growth and success wasdriven by the growth and success of our clients – solving delivery and scale challenges, as well as a closed loop on the revenue we generate, enabled us to demonstrate the key part we play across marketing and sales. “We invested heavily in big data, leveraging millions of data points to segment by buyer intent, persona, industry and location, allowing us to inform the best personalisation of messaging and approach at the right time.”

Personalisation is, of course, a hot topic this year, with our Trend Tracker listing it as the fourth most important trend among client-side marketers in 2021, and the third most important trend amongst agencies.

Andrew added: “In increasing our headcount across multiple departments and two locations, our people – existing and new team members – have been critical in making sure we continue to deliver during this growth.”

For Will Yates, client services director, Novacom Group, success in financial year 2019-2020 was driven by new client accounts won through referrals, as well as building on existing client projects through a combination of proactive ABM, and delivering a range of exciting campaign concepts.

“For example, we were the leading digital agency on a client’s global product launch, which featured an augmented reality product showcase, leveraging technologies that aren’t readily available commercially yet,” Will said.

Success in the face of Covid-19

Success amongst these agencies, however, does not appear to be a fleeting moment in the sun. In fact, a number of agencies included in both tables have reported continued success throughout the pandemic. For Lorna Charlish, managing director, Digital Radish, the client sectors they work with have been important to sustained success. For Digital Radish, 2020 was a year of progression, with Lorna claiming: “The clients we tend to work with are predominately technology, often cloud-orientated, businesses. For many of these brands, Covid has accelerated their progression. One of our clients’ clients, a retailer, said they’d had to achieve in three months what had originally been a digital transformation plan lasting eight years.”

Clearly, for every door Covid-19 has closed, another has opened, allowing some agencies to thrive. Of course, even those agencies that thrived in 2020 have rarely done so easily.

Louise Vaughan, managing director and co-founder, Definition, for instance, claimed: “For our team, our business and our clients, 2020 has been a year of monumental highs and lows, where we’ve tried to predict the unpredictable, revolutionised how we work and play, swapped offices for homes and fast tracked both tech and flexible working to help our team realise a better work-life balance. So, in the year that forced us apart, we’ve united more as a team. The fact we’ve secured investment to realise two acquisitions mid-pandemic, acquiring internal communications agency Words & Pictures and strategic brand agency Redhouse gives optimism that, with the right vision, commitment and commercial rationale, there are still significant opportunities to secure funding investment for growth.”

Short-termism and rapid transformation are 2021’s biggest challenges

It goes without saying that the impact of Covid-19 on agencies has been dictated by the services they offer and the markets they serve. As Andrew Remes pointed out: “Those agencies specialising in physical events will probably have had a challenging year.”

For Inside Marketing, however, Andrew claims: “Our core service – on demand inside sales – is naturally resilient to the changes to working life the pandemic has brought about and continues to provide tangible growth for our clients.” However, he added that the shift in working practices – in other words, working from home – remains a challenge for everyone. Those who adapt quickest and evolve will be the first to see success.

For James Collis, managing director, Revere, this also rings true: “We have done a fantastic job of working without an office for the last 10 months, and introduced a ‘work anywhere’ policy, where everyone in the company will be able to work where they want, when they want. However, this hybrid model brings unique challenges in ensuring operations and culture remain strong.”

Louise Vaughan is hopeful for 2021, but acknowledges that this year will not be without its challenges. “We’ve started 2021 on a far more buoyant footing, but there is still some nervousness around both Brexit and the easing of restrictions that’s resulting in more short-term campaigns until we have greater economic clarity.”

Matt Harper, CEO, The Marketing Practice, echoed these sentiments, claiming: “The biggest trend is short-termism. Before Covid, it felt like the tide was turning towards a re-balancing of long with short-term focus. Naturally, businesses are planning their activity now by quarter or half, and scrutinising short-term metrics to justify the next. The risk for us as agencies, and for our clients, is the impact that will have on longterm marketing effectiveness.”

For Nick Rhind, CEO, CTI Digital, the new home-working set-up and lack of physical meetings remains a challenge. “I think agencies are facing a lot of challenges working remotely. It makes building relationships and feeling understood a lot harder.” Ultimately, while easily accessible video call services have made long-term home working feasible (imagine if the pandemic happened 20 years ago), the lack of face-to-face interaction cannot be underplayed, particularly where new business is concerned.

Mirza Fur, director and cofounder, Kingpin, agrees. He claims that, with buying teams more spread out and disparate than before, “we need to focus on boosting awareness to reach everyone on that team, no matter where they are sat. This is where having the right tools, teams and analytics comes in.”

For Nicola Ray, the biggest challenge is even more daunting. “From our perspective, there has been a dramatic shift in clients having to rethink what they’re doing. It’s not just a simple reallocation of budget from in person events to digital, but more fundamental questions about the long-term change that’s happening in their businesses. Clients are looking to external consultancies to understand what this means for them, how this impacts their customers and the opportunities that presents. Clients are looking for more strategic services, insight and business change to shape their operations – and they need partners that can respond, understand their technologies, deliver wide-reaching solutions and scale them – fast.”

So, 2021 will not – unsurprisingly – be without its challenges, even for the highest performers of the UK agency marketplace. The challenges that keep emerging amongst our sample group are:

  • Short-termism – a reluctance (or is it inability?) to think long-term and strategically, in favour of tactical wins. Although effective in the short-term, there is doubt that this approach can deliver long-term value.
  • Remote working – although the once office-bound workforce has successfully adapted to working from home, it is by no means an ideal solution. Maintaining existing relationships may be feasible, but is building new relationships the same? Is reaching people more difficult than before?
  • Rapid transformation – with clients needing to rethink everything, and needing results by yesterday, agencies are under greater pressure than ever to deliver success.

So, what are agencies’ hopes and expectations for the next 12 months?

For Richard Perry, CEO of Iris Business: “I expect a big theme for this year to be the acceleration of the B2B buying process, from brand story to optimising the demand engine through to the digital experience. Helping B2B decisions going from requirement and enquiry through to deal closed. For many years, we’ve been passionate about establishing world class participation brands with consumer clients like adidas, Starbucks and Samsung. Over the next 12 months, I hope to find more opportunities to do this in innovative ways with our B2B clients.”

Given the catalytic effect that Covid-19 has had on the world’s transition to digital, the idea that the buying process might mature in 2021 is perhaps not surprising. Indeed, Will Yates claim: “I think the big themes this year will be building on the digital-first and ‘customer experiences at a distance’ initiatives that we’ve been delivering over the last 12 months.”

Will went on to explain that Novacam has been working on a number of immersive 3D virtual event spaces to replace physical events and exhibitions. Will added: “I think with the realisation that these digital solutions save time, money and reduce emissions, they will continue to grow in popularity, even as we’re allowed to travel again.”

Of course, physical events will return at some point in the not-too-distant future, but there is certainly more faith in the ability of digital events to succeed now than there was at the beginning of 2020. With this in mind, it is not surprising that the digital event space is set for another big year.

For Alex Swann, he expects engagement to become a clear forerunner in technical B2B marcomms activity over the next 12 months. “Historically,” he says, “brands and their agencies have focused on nailing the relevancy of a campaign or product in order to attract customer buy-in, stimulate action or drive awareness. However, customers are more perceptive today and, to some degree, immune to many of the traditionally deployed marketing techniques. Engagement is absolutely vital for making a customer or individual feel listened to, understood and, above all else, provides that personal touch.”

Indeed, with social media and advertising becoming increasingly saturated, it is only natural that client and agency-side B2B organisations will need to think more deeply about how they engage with their audience. Whether this is through digital events, VR, community marketing, or something else, is besides the point. The main thing to note is that the top B2B agencies are thinking heavily about engagement.

Matt Harper, meanwhile, expects marketing to continueto focus on making contributions to sales metrics, sustaining the wave of support for ABM. Two less publicised trends, he claims, will be around “significant changes in channel marketing, and a growing investment in customer renewal or lifecycle marketing.

“The partner landscape has been impacted significantly by Covid – vendors that respond to that smartly and quickly have an opportunity to establish partner loyalty and provide a significant leg-up for their indirect sales channel.

“With the potential for slower or more conservative buying, a focus on retaining and growing existing customers will be vital. I think we’ll see some redirection of investment from new business marketing to customer marketing.”

How might the landscape evolve in this period?

In response to Covid-19, agencies have had to evolve. Challenges that, at first, appeared to be temporary, will start to have longer-term consequences, as the world continues to align itself with the new normal.

So, how will the agency landscape evolve over the next 12 months?

For Nick Rhind at CTI Digital, agencies will need to start working together more. “Brands are increasingly looking for specialist skillsets in agencies,” he says. “They don’t want giant tech houses who do everything to an okay level and nothing is done spectacularly.” In response to this need, Nick says: “We’ve been building the ‘CTI Group’ – an integrated network of agencies with specialist skillsets who work great together, but, by operating independently, still have to compete and constantly up their game.”

On a similar note, Louise Vaughan at Definition argues that mergers and acquisitions are likely to become more frequent, as “complimentary agencies look to create greater resilience through scale and by broadening service lines.”

Louise also went on to say: “We’ve also already seen a run of specialist boutique agencies starting to spring up as a result of the global networks shedding headcount. As a result, 2021 could mark a big year for the boutiques as many brands working with reduced budgets will be taking a serious look at ROI and the value that can be delivered by smaller, nimble, talented alternatives.”

Interestingly, Richard Perry at Iris Business claimed: “We’ll see the most agile agencies win. It will be more important than ever to have flexibility, especially within any set models, to ensure you can respond appropriately. This is just as relevant for the small independent agencies as it is the networks. We’ll also see more demand for clarity on an agency’s particular specialism. Being distinctive will be key.”

Alex Swann claims that, although clients of the past had a clear idea of the type of service and support they required from an agency, there has been a definite shift. “Clients are increasingly calling for more holistic support to address specific commercial challenges or wider market or customer problems,” he claims. “This enables us to take a more strategic, cohesive approach, drawing on the most effective combination of marketing disciplines and techniques to deliver results.”

So, how are our highest performers expecting the UK agency marketplace to evolve?

  • Greater agility – agencies will need to be able to respond to client’s exacting requirements, and quickly.
  • Sharing the load – agencies will need to clearly lay out what their specialties are, and work alongside other agencies who specialise in different areas.

B2B Marketing UK Agencies Benchmarking Report 2021

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