Ian Lees, co-founder at Vega – There have been a lot of column inches devoted recently to the issue of media billings being lost from regional agencies to London agencies – a figure of £250m has been widely quoted.
Commentators have debated whether this signals a structural shift in the media market, with ‘Northern’ businesses potentially losing their mojo. Or alternatively, clients who have previously been happy to be serviced by regional agencies are suddenly experiencing a ‘road to Damascus’ style epiphany that agencies in London can offer something new, different and exciting; something agencies outside of the capital supposedly can’t.
As someone who has worked in the Manchester media scene for over 40 years now, I’m always disappointed when the local market shrinks. But for anyone wringing their hands or agonising over the reasons for this, I wanted to share my two cents on the matter and offer some good, albeit sobering, news.
‘The regions’ have always, and continue to be, a hugely competitive, growing, successful media market. Strong businesses have been built by brilliant entrepreneurs for decades in all the major cities of the North. Inevitably, however, these entrepreneurs at some point look to realise their investments and their assets. Invariably, they sell via trade sale to bigger, multinational, network businesses, with media agencies notoriously considered unattractive to private equity.
While these acquired agencies often thrive initially as part of a bigger network, history tells us that at some point, management teams will look to integrate, align and ultimately repurpose their acquired assets. In doing so, they can lose the very essence of the business they paid a healthy multiple for in the first place.
This has happened before. To my mind, it’s what’s happening again now and, like many business phenomena, it’s cyclical.
It’s not ‘the regions’ that are currently losing business to London. It’s the biggest independent agencies that have been acquired by networks, and have subsequently had their culture, capabilities and entrepreneurialism systematically dismantled by London-centric leadership teams who may have impressive titles, but don’t necessarily know how to create and sustain a successful agency identity, culture and, importantly, a compelling client-first proposition.
From our research, of the £250m purported as lost to London, the large majority has actually been lost from Northern network agency offices in favour of independents. The amount of these losses attributable to networks since 2022 could be north (excuse the pun) of £230m. London networks losing business to “independent agencies” shows a similar pattern.
That’s the sobering bit out of the way. The good news is that there remains tremendous talent in the regional markets – talent that is growing great brands and businesses, and which in time have the potential to develop into the next MediaVest, the next Media Business Group.
Bonded, Open Partners, Notorious, Republic of Media and my own business Vega are all providing compelling propositions to clients. Propositions that are based on skills, performance and capability – not location. All are growing into substantial businesses and I’m confident the region will soon reverse the trend of leaking business we are seeing from the network agencies currently.
Undoubtedly, this short-term reversal is unfortunate. Losses in revenue mean losses in personnel and hence reductions in headcounts in the regional employment market – both amongst agencies and media owners, and that is truly regrettable. Nevertheless, there remains talent here in abundance.
Think back to the nineties, when Williams, Conry and Calbrade sold their fantastic media agency to TMD; when Offland, Tinker and Brooksbank sold out to CIA, and more recently Mediavest to Dentsu.
In my opinion, the regions will be on the up again, and sooner than you might think.
