Do smaller and young brands prefer agency partners who are equally young and dynamic or the bigger agency houses win the game here According to Economic Survey 2021-22, India now has more than 61,400 startups that are recognised by the Department for Promotion of Industry and Internal Trade (DPIIT). As many as 14,000 of these were, in fact, recognised during fiscal 2022. With such a robust influx of new businesses in the stream, it is definitely a great opportunity for media and advertising agencies to board new clients. And possibly more so for the small-and medium-sized players, who might not just be more affordable but also much in sync with the working style of these young professionals. exchange4media.com interacted with some of the industry insiders in an attempt to better understand the dynamics between these new-age startups and the agency businesses.  

Vavo Digital CEO & Founder Neha Puri mentions that around 30-35% of this market could be led by the small-and-medium-sized players.   Do startups prefer smaller agencies over big networks? Not really! As explained by Digital Dogs CEO & Co-founder Ambarish Ray, any new business picks the agency partners based on two broad parameters; budgets and the kind of target group they are approaching. “Some of these startups are VC-funded and have huge cash banks, so they might start off with bigger agency partners instantly. In other cases, their product might require, or they might think that it requires, a bigger media spectacle and noise. In that case, they would opt for a bigger agency.” But the size of the agency doesn’t really matter when it comes to delivering the right outputs. “This is another opportunity for the industry to evolve new ways of working, new commercial models and new client-agency partnership models. Not all startups will have the funds or the marketing savviness to invest in brand-building. VC-funded startups will look to aggressively fulfill short-term acquisition and fulfillment goals rather than long-term brand-building goals. This is where larger agencies—or a robust small agency ecosystem—can help startups successfully scale beyond the initial VC-fueled manic growth phases,” says Devanathan. Yet, smaller agencies are more trusted But, at the same time, there have been more than enough cases wherein a startup has shifted base to a smaller agency after working with bigger networks for quite some time. Ray shares, “Frankly speaking, yes there have been cases when clients of big networks have shifted their business to an agency partner like us, who are comparatively new to the business. It can be attributed to a few reasons. The primary reason is that startups today realise that brand success is no different from market success. With bigger agencies, there are a lot of levels of hierarchy that one has to cross to get an integrated vision of both these parameters together. No startup today has enough time to coordinate with multiple agencies or research partners to cull this data. That’s where smaller agencies like ours are better trusted.” The Voice Company Founder + Intern Bodhisatwa Dasgupta (Bodhi) adds on, “With startups raising funds and quite a few gaining unicorn status, they will want to work with larger agencies, simply because they can afford them, and it’s more or less like a badge value. But in six months or so, they regret their decision and move to a smaller agency that’s nimble on its feet. The reason this has happened in the past, and it’ll continue to happen, is because larger agencies are programmed to work in a certain ‘style’, for want of a better word. It’s always a TV/print-first idea, it’s always a week before new ideas can get developed. And this doesn’t unfortunately work for a startup, that is essentially always online. There’s simply no time to shoot a film for a week and go away on post-production for a month. One needs to be quick and digital-friendly. Which is something smaller and leaner agency structures can give you.”   Regional agencies might be better at creating local language content One of the biggest challenges in modern marketing for Indian audiences is the use of regional languages in the ads, with a nuanced understanding of the space. Most of the bigger agencies might not have those capabilities and many startups, especially the ones dealing with a particular geography, tend to need that. The creative head of one of the leading agency networks mentions, “I feel that regional agencies that have teams made up of people who not only understand the language better but also the cultural nuances of the space well can do much better work than agencies based in a city like Mumbai or Delhi. While these agencies do have a nice mix of talent from across the country on board, they might not have people to cater to every state in the country. Even we outsource some of our writing work to smaller, regional agencies if we feel that we are not getting the nuances right.” Puri agrees, “In terms of appealing and targeted vernacular content, one cannot deny that agencies like ours work closely with the brand’s ideologies and ensure that the content created connects with the common man. We as young startups have an energetic young team who are constantly on the go to explore the unknown and bring it to the world. Our strength lies in our team members who are equally enthusiastic about innovation and exploration in the field as I am and that is what makes small businesses like ours unique and distinguishable.” On this point, Devanathan has slightly contrasting views, “This is a slightly archaic way of looking at things—that only local, small agencies in specific geographies can create content in local languages. However, the large Delhi and Mumbai-based agencies can tend to make the mistake of creating in English or Hindi and believing that merely translating these into other languages is sufficient. This doesn’t necessarily make the smaller agencies better. It just makes the larger ones lazy, and blind to a larger opportunity. Especially in a time where voice and video are breaking the barriers of text-based communications, agencies (large or small) would do well to invest in understanding and creating localized cultural nuances. Language proficiency by itself will not guarantee the smaller agencies an edge.”   The final word While not all startups might be looking at smaller agencies to support their businesses, there is a certain edge that these young players might have over their more experienced and richer counterparts, simply on the grounds of simplicity and individual attention they can offer a client. As Puri says, “A growing small business ecosystem can only be developed by cultivating an environment of mutual benefit within the system. Hence, there is no doubt that most of the startups and small businesses that are mushrooming in India would be relying on agencies like ours for their communication. Startups today are not hesitant to put in extra effort in researching the kind of digital marketing agency they want to connect with and hence are focused on working with only the experts in the field who have complete knowledge of all the verticals in the digital space. Vavo Digital has catered to an array of clients from startups to well-established brands and we are happy to say that our influencer marketing and communication models have helped the brands to pave their way forward towards a better and more successful future.” But in the bigger picture, it all depends on the relationships an agency can establish with its clients, no matter what the size. Dasgupta rightfully concludes, “I wouldn’t want to paint broad brushstrokes saying one is better than the other. Both large agencies and smaller agencies have done terrific, targeted work, and both have been guilty of doing terrible work as well. It’s the nature of the game, so it’s unfair to shoot one done and glorify the other. The biggest opportunity I feel is ownership. When you’re working closely with a company that’s just starting up, the founder and you are chasing the same vision. And then, it’s not just about the work. You’re invested in a whole lot more – how many people are converting? What’s the dropout rate? Will this line with this target segment work better? That’s ownership, and that I think is a great opportunity for any brand creator.”