Vertical Concentration: Why Most Agencies of Scale Do It, and Why We Never Will

Among the many things clients value about Simpatico is our versatility. Because we’ve designed our processes to be scalable, we’re just as ready to respond to the marketing needs of local and regional businesses as we are to the urgent, big-stage communications challenges of national and global enterprises. Many of our counterparts can’t say the same. Indeed, sooner or later, most ad agencies shed clients who don’t fall within target industries. Vertical concentration, they reason, allows for predictability, profitability, and—of course—marketability.

It does. In outsourced marketing, it also enables creative laziness, recycling of ideas, and paranoia among clients. It deceives cash-paying businesses into believing they’ve bought a first-of-its-kind, campaignable concept, when in reality all they’ve been pitched is a reject from their competitor’s slush pile. Most of all, it does one thing from the outset that’s a no-no for us at any point in the lifecycle of Client Services: It undermines trust. And it does so, specifically, by begging an important question from the very first impression: “How can you be 100% on my side when my biggest competitors keep your lights on?”

Simpatico, as we are fond of saying, works with businesses around the corner and around the world. Sure, we’ve got a few specialties, but our market interests are as varied as our skillsets. Our competitors might whisper about why that’s silly, but like all operational decisions, it was made deliberately, in service our clients, and is therefore central to who we are. And that’s not about to change.

In the same way education exposes undergrads to a spectrum of experiences and insights, eschewing vertical concentration is the very thing that keeps the SimpatiCrew grounded and well-rounded. It allows a transfer of relevant knowledge, a sharing of critical thought, among business minds who—however cerebral, however ahead of their own packs—might never otherwise cross paths. It allows Simpatico to honor requests like industry exclusivity, when the value-exchange is sufficient to make business sense for us both. It makes us better. And it makes our clients better.

If you think you’ve got nothing to learn from industries who aren’t yours, consider Jeff Bezos. When Amazon sold its first books out of an attached garage in the sleepy Seattle suburb of Bellevue in 1994, what wisdom do you suppose Walmart leadership in Bentonville, Ar., then the undisputed retail leader, thought they might glean from a web-based bookselling startup?

Consider, too, Netflix. When, in April 1998, Reed Hastings and company shipped their first batch of DVDs under the moniker of Netflix, were entertainment moguls at all worried? Forget Blockbuster—I’m talking broadcast networks, and Hollywood. Could these industry cornerstones have fathomed a rival, reared in the cradle of the Internet, who might emerge to captivate and command viewing audiences larger then their own, much less steal away Golden Globes and Oscars?

Or consider, as perhaps the most timely and salient example, Snapchat. Not quite seven years ago, Stanford junior Evan Spiegel and his classmates released for iOS a disappearing messaging app, which they dubbed Picaboo. Picaboo’s first glints of publicity had tech analysts mentioning it in the same breath as the iPhone’s native messaging app—not exactly a compliment, considering SMS was viewed as rusty tech compared to the shiny world of Social Media. But today, if you’ve paid any attention to your newsfeed lately (or to anyone under the age of 20), surely you’ve noticed Facebook’s newfound love for Stories. Stories, it turns out, is a feature borrowed directly from rival Snapchat—formerly known as Picaboo—who refused Facebook’s $3 billion cash acquisition offer in 2014. Is Facebook out of ideas? Or is Mark Zuckerberg fighting off an existential, Amazonesque threat, to avoid the same fate suffered by Goliath counterparts like Walmart before him?

For these reasons—and many more—the premise of Simpatico’s Client Services model is that diversification is key. By maintaining a vertically diverse book of business, our clients automatically have the edge in so many ways: a better pulse on economic and market conditions, preemptive strikes in an economy more prone than ever to disruptive innovative, ethical leads on competitive intelligence, and disposal to a wealth of resources.

Any size, any business stage, any vertical: Simpatico’s clients run the gamut. That’s because we screen not for demographic attributes, but for clients who share our values, who require macro-level thinking, and who are, like us, in pursuit of permanence within their space.

We don’t just have a moral or fiduciary or business case for our model: We have a Client Services case for it. And in our business, that’s what matters most.

 

Also posted on LinkedIn

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