Whales, Sharks, and Catfish – Advertising Agency Structure
There has been a lot of information written about advertising agency structure, but despite the abundance of information, I would like to tell a little story about the three types of advertising agency structures I have seen in my research. There are three types of structures, Whales, Sharks, and Catfish.
Whales are 4A agencies that have built strong client bases and often win awards (Effes, Lions, Spikes, etc.), but they have one big drawback. They have become too big and they are no longer flexible or agile.
Sharks are building strong client bases and winning many new clients from 4A’s. They are up in coming agencies that are hungry for awards and recognition. They are also small teams of professionals that have strong backgrounds in advertising and because they are still small; they are still flexible and agile. They often drive the industry by taking risks that Whales are incapable of taking because of the bureaucratic oversight.
Catfish are bottom feeders. They often take work that Whales and Sharks have turned down. The work is often impossible to compete based on the clients’ demands, which is why the work was turned down. Catfish agencies are more concerned about making money than winning awards or driving the industry. They are often hard to spot because they will attempt to disguise themselves as Sharks and invest more time and money on presentations than on creating quality content.
Whales – Advertising Agency Structure
The Whales are well known and because they are well known, they do not have to spend as much time on business development and presentations. They will still create quality presentations and develop their business but because they have a strong name in the industry it is easier to attract clients. The Whales include WPP Group, Omnicom Group, Publicis Groupe, Dentsu etc. They are slow to react to changes in the market but when they do make changes they change the entire industry. They often take a wait and see approach to new trends but when they decide to embrace a trend; they take the time to create quality content and corner the market. Most decisions are made based on a strategic long-term outlook. Whales often copy Sharks after Sharks have proven the value of a trend. They also provide quality customer service from start to finish, which helps them retain clients.
The management is almost always made up of veterans of the industry. They are professionals with a long list of past achievements including awards and clients. They will have 15-20 years’ experience doing everything from copy writing to business development. They understand the advertising industry and they have proven time and time again that they are capable of making the “right” decision.
The employees run the gauntlet; Whales have everything from fresh new interns to seasoned vets. They have strong systems set in place to make sure everyone is contributing based on their skills. The strong management has created systems that help interns and vets utilize their skills to the best of their ability. Interns will be given challenges that test their skills and teach them new skills. You will not have an intern taking lead on a multi-million dollar account, but you will have interns helping with copy writing, design and creatives. Vets will lead the major accounts and work with mid-level and intern staff to create a positive outcome.
Whale’s clients are the major corporations that have multi-million dollar advertising budgets. These clients are P&G, Coca-Cola, McDonald’s, etc. They expect the best from the Whales because they pay top dollar. Clients want results and they are willing to pay for results; because Whales have lager budgets to work with, they are able to attract the best and brightest in the industry, which is why they win awards.
Sharks – Advertising Agency Structure
The advertising agency structure of a Shark is mean and lean. They do not have the burden of size that the Whales suffer from and they have less rigid rules. Sharks are often made up of Whale employees that didn’t like the bureaucratic oversight. These employees wanted more freedom to pursue new trends and creative forms of advertising. They spend time shaping the industry and finding new techniques to reach audiences better. They have a strong business development strategy and strong presentations but they do not obsess over these aspects of the business because they are too focused on creating new quality content. They gain new clients by creating content that gets noticed and by winning awards. They often have a mid to long term strategy in place but they often make changes based on the market.
Management is more open to risk and they are looking to drive the industry. They often have an entrepreneur mindset and they are looking for better techniques to reach their audience and break through the noise. They are often mid to senior level directors in Whales that are tired of hearing “No” to new techniques and ideas. They believe they can do it better and they start companies to prove it.
The employees are “Jacks of all Trades”. They are the best and the brightest, which have been handpicked by management because they have proven potential. They are often looking for a fast moving company that will promote from within and allow them to grow quickly. There are few or no interns because the business model has cut out all the fat that is apparent in the Whales. Interns and upper management slow down the process, which is why you will find very few in a Shark.
Shark’s clients are both mid-level companies and major corporations. Sharks often take on mid-level clients because their price tag is still affordable. Mid-level clients can afford Sharks because the agency is still small and the agency can still make a profit by accepting mid-level clients. The mid-level client is the bread & butter of the Shark but the Shark is hungry and as they gain more success they often start targeting 4A’s clients. P&G, Coca-Cola, McDonald’s, etc., will often try non-traditional campaigns with Sharks and if the Sharks produce strong results, the clients will shift more capital over to the Shark.
Catfish – Advertising Agency Structure
Catfish are bottom feeders. They often take work that Whales and Sharks have turned down. The advertising agency structure is designed to minimize costs and maximize profits. They are often more concerned about making money than producing quality content. This is why they are always willing to take on new clients, but they have a difficult time retaining clients. These agencies never win awards and never change the industry because they rarely set goals that inspire change. They never push their employees to grow because they are too afraid to loss them and because they are unwilling to invest in employees they lose them. They often tell clients about best practices but they are unwilling to follow these practices themselves (because it costs money). They have no long term goals and often submit to the clients demands, even when they know it is not the best strategy. They are only in it for the money, so they are willing to use outdated practices because they are cost effective.
Management in Catfish agencies is made up of one or two professionals but most senior level managers do not have a background in advertising or marketing. Management does not invest in employees and often accepts poor quality work because of deadlines. They have not built strong internal processes and this leads to confusion and disorganized decisions making processes. Management does not communicate well with employees and often has too much control. They do not empower their employees to make decisions and this leads to power struggles and turnover.
The employees are often unskilled and untrained because management is unwilling to invest time and money into employees. Because the Catfish agencies are trying to cut costs, they will often hire a lot of interns and non-professionals. This lowers cost because non-professionals cannot command the same price has professionals. Also, interns often work for free or very little. The best way to spot a Catfish agency is to look at their employees’ history. You will find non related industries or no experience. Another technique they often use is giving titles to interns that disguise their intern status because they don’t want clients to know half of the work being produced is by untrained interns.
Catfish agencies will take on any client that is willing to pay. The agency will spend a lot of time on presentations and business development. From the outside is it hard to identify a Catfish because they often win new clients and they appear successful. The Catfish is always taking on new clients to replace the ones they have lost. Catfish have a hard time retaining clients because they produce low quality work.
There are many advertising agencies out there and they all have their own advertising agency structure but in my research, I have come across these main three. Over the next few posts, I will spend more time explaining how companies and individuals can benefit from these three different types of advertising agency structures. If you are interested in Whales and Sharks read more here. If you are interested in Catfish then go fishing.