When Consolidated Agencies are Not a Holding Company

Tim Ringle is Global CEO of Meet the People, an "international family of unified but independent agencies. In the three months since its inception, Meet the People has acquired 3 agency brands. Tim has bigger plans. He intends to bring in a total of up to 15 agencies, reaching from Canada and the US to Europe and Asia. "We have 400 people in North America right now. We want to be 2,000 people in at most 18 to 24 months globally."

Even though he is acquiring agencies at a fast pace, Tim says what he is not building a holding company. He explains that holding companies have been consolidating the industry, the trend a "survival response" to complications from the digitization of processes and channels and, more recently, because covid has changed how work is done. He says small agencies may need to hire one or more people "just to handle the benefits, taxes, payroll, inflation, and salary increases" of those employees who now want to work from "anywhere," where "anywhere" has different laws, tax rates, and costs of living and working than at an agency's home office.

Tim sees holding companies as a powerful trend. Even though there are 14,000 independent agencies in the United States, six major holding company networks "own sixty percent of the entire media industry within the agency space." However, Tim says, they often don't act in the best interests of their clients because they are driven from the top by financial rather than client interests. He claims that both small, independent agencies and holding companies often fail in communicating when passing clients from one agency or holding-company-entity to the next. "They're only going to talk to each other if there's some money to be made in between . . . there's a lot of lost information . . . ."

In Meet the People's "family," the agency owns its affiliate agencies, but the people within those affiliate agencies also "own a part of Meet the People." The network structure provides "a fully integrated approach for brands . . . to cross-pollinate across multiple services," the opportunity for the agency to build multi-brand micro-offices, and scalable support for dealing with "anywhere" variances. Tim says, "Keep the brand, be the best you can, but let us create connective tissue between the different companies to see if we can increase share volume with a client."

Tim has a lot of experience building global agencies. He says he has learned that it is extremely important, "especially in the beginning of the engagement," to build trust with the client. To do this, his team of disparate agencies will need to work as one. Tim is bringing his people together physically to take time to create "a deep understanding and culture between all the different offices, people, trades, and brands," building what Tim describes as an "integrated DNA." They also will be discussing the implementation of individualized OKRs (Objectives, Key Results), a tech tool for tracking accountability.

Tim says his agency is very focused on operational excellence, on brand positioning, on bringing really good entrepreneurs . . . and on hyper-goals. He says it is important to make the right decisions now because, "if you build something with small cracks, they become massive gaps when you are at scale."

As his agency network continues to grow, Tim is excited about finding "really talented entrepreneurs who want to change the industry who can't or are tapping out" with their skills/abilities/finances and being able, through Meet the People, to provide the experience, capital, and structure and small-enough scale "where they can actually still move things."

Tim can be reached on his agency's website at: https://www.meet-the-people.com/. Transcript Follows:

ROB: Welcome to the Marketing Agency Leadership Podcast I'm your host Rob Kischuk and I'm joined today by Tim Ringle, Global CEO at Meet the People based in New York, New York. Welcome to the podcast, Tim.

TIM: Hi, Rob. Thank you for having me.

ROB: It's great to have you here. Why don't you start off by telling us about Meet the People, what is the business, and what are you all best at.

TIM: I think, to understand what we are building with Meet the People, you have to understand a bit of my background. I've been an entrepreneur in the agency space – primarily digital agency space for 24 years. That sounds long but I'm also 45 years old so I can carry that. I started my first agency literally in the basement of my friend's house. We started as a SEO agency digital marketing agency, very much focused on performance marketing. I was blessed to be able to do that in '98, '99 – when this industry was about to develop and therefore was able build that business to 150 people and then sell the business. After that, I did a reverse takeover of the company that bought my business –and that got me to around 400 people in Europe. So, I started my first business in Germany – my native Germany – and we scaled the 400 people agency that was all across Europe into 1,000 people. It was stock market listed in beautiful Paris. I left that to move to the dark side of the ad industry as I call it. Having built multiple agencies as an independent agency entrepreneur, you were always battling the holding companies, right? And I swore to myself many times because they beat me and sometimes I beat them. That's how it works, right? I swore to them I would never work for them. So, I ended up moving to New York City and working for 1 of the holding companies who always wanted to acquire my business. So, I did that for 3 years within IPG. I have to say the experience was amazing. I really learned a ton of stuff that I couldn't learn from being someone who was leading 1,000 people. Now I was part of 65,000 people. I inherited an agency there – once again, a performance marketing agency – around 1,000 people – and then left it after 3 years scaling it to 3,000 people. So, I've done this a couple of times and what we're building with Meet the People is what I would say is version number four of my vision of what an independent agency network should look like. We're building it with my 24 years of experience of what I liked and disliked in the agencies that I've built in the past. What I liked the most was that people in the advertising industry are mainly driven by culture. If you're good in your trade in advertising, you can get a job anywhere on the client side in tech companies. You can build your own company because marketing, just like legal, is a service that you always need everywhere. So, selling a product, branding a product, coming up with a marketing strategy is something you can use pretty much in every business in the world. It's 1 of the integrated parts. Why do people choose to work for an agency? Because they love the culture in agencies, right? What we're doing at Meet the People – when we looked at the industry and I had – I still have the same vision. I'm building a global agency network as an alternative to the large holding companies. I figured that nobody's talking about the people anymore. Everybody's talking about technology, data, automation, and how computers will replace us, how AI will come up with creatives – all this kind of stuff. It's true that the technology has enabled us to be extremely more efficient. But, in the end, the new Coke logo or the new "just do it" from Nike does not come out of AI or a computer, it comes out of the brain of a human being a creative strategist. So, we believe (or I believe) that we have to remember in the ad industry that it's all about the people. We are a service industry. Without the people who are sitting behind the machines and using the machines, tech enabled, we're not going to produce disruptive, new ideas that actually put a brand on the map. That's why we're building Meet the People. I can obviously talk much more about it. But that's kind of it in a nutshell.

ROB: When you say an agency network . . . what does that look like when it's an agency network? It's not a holding company. I'm curious about the differentiation of some of the different agencies within the network and how you think about that – because your website is very people-centric. It's more about the people, the partners, than it is about this brand and this specialization and this other thing we just acquired and all that you see in the holding company world.

TIM: Correct. So, why am I not calling it a holding company? A holding company has one purpose – and it is a financial orientation. right? So, a holding company is most a holding company because it is actually managed by finance people. I don't necessarily I don't want to diss anyone. But I would say that a finance-led company most probably will be struggling with creating the best strategy, best creative, and best outcome for their clients. They might create the best outcome for themselves, right? That's why we're not calling ourselves a holding company. We are running this network of agencies who, don't misunderstand me, we do own the agencies – and the people within the agencies own a part of Meet the People. That's the concept. We are building this, first of all, to fulfill a fully integrated approach for brands so, instead of just servicing one client within one specialty with one agency, we are allowing the conversation to be elevated and to cross-pollinate across multiple services. For example, when our creative agency, VSA Partners, out of Chicago, New York, and San Francisco. Beautiful, creative design work and strategy. When they come up with a brand refresh or rebranding or brand strategy – I would love to see that through until you actually can see it on TikTok, Snapchat, Instagram, LinkedIn – wherever that brand comes to life besides on brochures, in magazines, or the logo or the CI. Many independent agencies, because of their size and their financial scrutiny because they're small, can't invest a lot of capital into innovation or additional services. They can't see that journey through. That means you have a lot of inefficient handshakes in between. That happens in holding companies because they're structured that way, but it happens in independent agencies as well. One independent agency is a hundred people might be excellent in creative. The next one might be excellent in social media. But they're only going to talk to each other if there's some money to be made in between. There's a lot of lost information when a chief creative officer comes up with a brand strategy and somebody implements that on social media in community management. We want to make that a much more seamless flow with less barriers for the client but also more excitement for the people involved because you actually see the product living there and a colleague of you in another agency – but it's part of our structure – has basically put that on the social channel or billboard.

ROB: When you come to thinking about – there's, obviously, within a holding company lots of capabilities, you're talking about these more seamless handoffs. How do you think about building that team? Did you go out hunting for best of breed agencies to bring them into the group or did you build some capabilities from scratch? How did you think about this?

TIM: We were going to do both. We started Meet the People three months ago and since then we had 3 agency brands join us – so we acquired 3 brands. Three agencies and we're going to bring more than 10 – probably 15 plus – companies into Meet the People as a group. We're going to do that in North America – so we already have US, Canada, some capabilities. We're going to do it in Europe and then we're going to do it in Asia. How we decide what to go for depends on what services we need next in that journey. Right now, we have a very strong creative agency with VSA Partners and we have a very strong experiential agency with Public Labels. We have certain services that sit in a similar bucket where the client sees the service, so that adjacent service is part of the scope. If we don't service that ourselves. then we should basically fill that gap either with another agency joining us or with building these capabilities organically with the acquire or actually hire before revenue. Ultimately, we want to have a seamless handshake between the different trades.

ROB: We have 2 former guests who have been acquired into a similar opportunity recently – which is interesting. We had Chantel from Imagine Media and Techwood Digital were both acquired. Jared Belski, who was the CEO of 360i, has rolled up 3 or 4 agencies. That's all I know. Is this a trend or is this just 2 people that happen to have done a similar thing and why now?

TIM: No, it is a trend. As much as I don't like the traditional holding company model, we have to respect that the holding companies have created an industry. Because there's 14,000 independent agencies in the United States alone. Fourteen thousand and there are six networks and the six networks own sixty percent of the entire media industry within the agency space, right? So they've created an industry. We all live in that ecosystem and that industry. The trend right now and primarily driven by the extreme success of what whatever intention Martin Sorrell, Sir Martin Sorrell, had to bid as for capital. If it was ego, if it was revenge, I don't know. He only knows. But he has been extremely successful from a financial perspective doing that because there is a gap, a vacuum in the Market. So, there's models like that that are older than the S4 Capital MediaMonks model. MediaMonks is only 3 years old but Stagwell MDC by Mark Penn is 5-6 years old and You & Mr. Jones is also 7 years old, I think. So, there's a couple of these what we call an agency rollup network model. They existed for years. What has changed in the industry is covid has accelerated the fact that independent agencies got scrutinized because of their size. Before, when you were 100 people, you could live a very good life as an independent agency. There's two real trends. One is the digitalization of processes and channels. At the same time covid is putting extraordinary pressure on talent, new work. This is all very complicated for smaller companies to handle because now your people tell you, "I want to work from anywhere." How are you going to do that from a benefits perspective . . . tax perspective? It creates complications. Clients are the same. "Oh, I don't need you to come into my office anymore, but I want to take T&E out of your expenses." Economy of scale becomes more and more important. A couple of people have understood that, so these networks are created over the last couple of years. But they're also created all over the planet. So there are networks in Asia, networks in Europe, networks in the US. There's only very few who can bridge multiple continents. This is one thing we're going to do with Meet the People. We're going to bridge multiple continents because we believe (or I believe) that our clients want the same quality of service across multiple jurisdictions that are not only North America. So, I've not invented this model, right? They exist. They're very successful. The main reason why they're successful is that, when you have, as I said, 100 people on your P&L, it's very difficult for you to invest a million dollars into innovation technology. You might only have a million dollars of profit and you want to keep some of that. Usually, it's very difficult for them to hire before revenue, to anticipate bigger jumps. In economy of scale, it's easier for us to say, "Ten, twenty percent of our EBITA goes to a business strategy consultancy layer that most agencies can't afford or a technology IP that you actually own as a company. We can make these investments. And that makes it extremely attractive.

ROB: How do the capital markets feel about this sort of arrangement? I know there's a lot of money out there looking for yield. I could also see the case that you just have to self-finance this sort of thing if you want to. Where is the money side of the world? Are they looking to fund this sort of thing because they need something to believe in and something that's going to give them better than inflation? Although inflation is getting pretty good now.

TIM: Let's make a relatable example. Let's imagine you have a million dollars excess capital right now. You have it lying around. Where are you going to put it? You can put it into crypto. Very risky. You can put it into NFTs. Even riskier. You can put it into traditional venture capital. So, there's a lot of money in the market. But there's also a lot of options in the market. You know pre-IPO, post-IPO, or FinTech, software as a service, space – there's so many categories. The service business as a sector in general or the advertising industry service side of it – not MarTech AdTech – it's not the most attractive industry to invest money. Why? Because you have no tangible assets. The desks, the computers – they're all at home right now. As people, as a company, you maybe own intellectual property. But mostly you have a lot of walking assets and that's your people. For the longest time, the ad industry was not super attractive for larger investors. That has dramatically changed because of the pressure coming from tech. Tech has gotten so heavy on advertising and so relying on advertising. Same time that there's more capital in the market and that a couple of people, including Sir Martin and others, have proven that you can make real money there. Most of the investment in this space is private equity and I would say large family offices.

ROB: It's fascinating just to see this emerge. I think I hear what you're saying that you know there's all these different factors in play, right? You have some firms that are a little bit "walking wounded" due to . . . it does get complicated when people want to be in different states and now you're having to pay taxes on your payroll in different states. There's an economy to having 1,000 people, 10,000 people where you know what there's a department that handles that baked into the margins of the overall business. I totally get it.

TIM: Yeah, and you don't go through this alone, right? If you have a 50-people business and 20 people decide they don't want to work from New York anymore or LA, they're going to work from anywhere, you need to hire at least 1 more person just to handle the benefits, taxes, payroll plus inflation increases plus salary increases. So, it's complicated. What's important about Meet the People is we give that layer at scale, but the agency brands stay independent in their DNA. We're not changing their brands. VSA Partners that joined us at the beginning of the year is VSA Partners. They've done that. This work for 40 years . . . successful. They're an incredible, talented shop and great people. Why would we change any of that? Doesn't make any sense. Keep the brand, be the best you can, but let us create connective tissue between the different companies to see if we can increase share volume with a client. You're already sitting on an amazing client. You define the strategy. Why don't we talk about who actually builds the website, who actually manages social media? Why don't we talk about it because we already have that relationship? That is very attractive to companies who don't have that client access. There's a lot of independent agencies who are very specialized, who would die to get into a client like Google or IBM or Ford who just can't because they don't have the gravitas.

ROB: When it comes to new and existing business, it sounds like you have some thoughts about the role of location. But the role of location is different from what it used to be. On the one hand you mentioned having offices and having people in these different geographies. But you also had this dynamic where some of the agencies that are joining the network may have played very much off a home field advantage that may not be the case anymore. So, how are you looking at the strategic role of geography?

TIM: I think geography stays extremely important. I'm someone who grew up with in-person meetings and built businesses within in-person meetings. I do believe in-person meetings to create chemistry. Especially in the beginning of the engagement with the client, it's extremely important because you're not only buying a service, you're buying the trust into the person across from you. Because there's so many agencies out there. So many service providers out there. Who are you going to go for if the service is extremely comparable and they sadly so are? In the creative space, not as much, but in the digital execution, who does better search than that person – there is a chemistry factor to that. I think in person will stay extremely relevant. Our strategy here is to say, instead of having large headquarters, we're going to have more micro-offices. When we have 10 agencies, let's say in North America, it's extremely likely that we end up having 20 offices all over the place. Instead of having one person in a WeWork, we're going to have 20 people from maybe 5 different agencies in Austin, Texas. Or we're going to have the same in Dallas, or we're going to have the same in San Francisco. We already have 5 offices in North America and anyone from these companies can really work from anywhere within these proximities. We also hire outside of these proximities because we want to have at some point an office in Miami, maybe in New Orleans, and whatnot. So, I foresee that we have certain client-centric larger footprints in New York, LA, San Francisco. We have Boulder, Colorado, we have Chicago, we have Toronto . . . but we're going to have a lot of micro-offices because we need to have flexibility. That's new work. This is part of that. Maybe one of the things we got from covid . . . besides covid.

ROB: Really fascinating. Tim, we quite often ask people what lessons they've learned and what they would do differently, but it strikes me that you are actually in the process of getting to do things differently. You know we say, what would you do if you were starting over? You, you have had a chance to do that in some cases. An interesting thing about this model is you're kind of starting on third base but you have agencies who have made it here on their own journeys and you're having to coalesce something together. What are you doing differently in the structuring of Meet the People that you learned in your past and said, "It's got to be different"?

TIM: One thing that we're doing the same is creating a deep understanding and culture between all the different offices, people, trades, and brands. I've done this before. The last business I managed for IPG, I ended up having 72 offices around the globe. The business before had 25 offices around the globe and we made sure that these people met physically. It sounds counterintuitive during covid but, the fact that you spend time together workshopping. For example, let's say we have five companies and all their creatives can come together in one location for three days and talk about the differences of their work approach. That would be such a forming experience for them because they all are going to learn from that. You have some people who have done this for 40 years. You have some people who are doing this for 4 years. It's that culture of respect, of understanding, of bringing the different traits together. I think that is extremely powerful. I learned through this journey that you can have you can have the best product in the world. If your people don't believe in it, you're not going to go anywhere. Creating that belief and creating that culture and creating that integrated DNA is a little bit of magic that's extremely important to build a successful business. That's what I learned. What I go to do different, and I kind of promised my wife I would, is travel less. I don't think that's not happening. What I try to do is travel a little bit less because covid allows for that new model. The second thing that I learned is to run an agency a little bit more like an agile tech company. Not because I want to strip away the creativity or anything – none of none of that. The problem in many agencies is that there's a lack of accountability because of a mutual understanding that the creative process is complicated. You know what I mean. Building a tech product is as complicated and needs as much creativity. But somehow there are better levers or control mechanisms in there that allow you to achieve a target in your planning session a little bit quicker and more agile. We want to apply a little bit of startup thinking to a very traditional industry.

ROB: I think anybody in the startup industry would claim the same degree of creativity and the same degree of craftsmanship. I'm very much from a software development background and if you want to talk about something that resists measurement. People always say, "Building software is not the same as building a house. You can stamp out houses, but software is a different thing." Yet within technology there are certain constraints that you talk about. You don't get to just walk away and say, "Well I'm sorry. It'll take some amount of time and we'll show up and it'll be great. There's process to it.

TIM: In the advertising industry, that is not always the case. People walk away and they say, "I'm going to come back in a week or two because I don't know when I'm going to come to a product." I get that because it's creative and it needs time but in many of these trades you can have OKR's, for example. So you can have certain accountability factors or set certain targets. That's how you can manage a large company. A bit more agile and efficient.

ROB: Yeah, so to talk about OKR's for a moment because they're popularly said, but I think sometimes poorly understood. Where did you come to a good understanding of them and how do you think about deploying them?

TIM: I've got to be honest with you. This is why I got my management team together in New York this week. They're all here in the office in New York – came in from Germany, London, Connecticut. Sounds like a long trip but we're all coming together.

ROB: Can be.

TIM: We are coming together right now, here in New York, to decide "how do we implement OKR's within an agency environment" and we're not done with that journey. We're not done with the discussion, but we do know we want to approach it a little bit different than the last 3 times we did it together. I think in six months' time I can answer that question much better. I do believe that OKR's need to be very individualized. Your overall underlying principles are the same, but you have to individually craft it towards your organization because you don't want to over-engineer it as well, right? You need to give people the freedom. So, I will be able to answer that question in three to six months

ROB: Sounds good, sounds good. Tim, as you're thinking about what's next for Meet the People and for this evolved holding company model, what's coming up next? What are you excited about?

TIM: For us, it's hyper-goals. We have 400 people in North America right now. We want to be 2,000 people in at most 18 to 24 months globally. So, we are very much focused on making the right decisions now because, once you build something with small cracks, they become massive gaps when you are at scale. So, we're very much focused on operational excellence, on our brand positioning, on bringing really good entrepreneurs. When I look at companies, we have to do the financial background checks and stuff like that needs to be in order. But I'm looking much more for entrepreneurs who see that the industry needs to change. That is where the minds are aligned with the companies we are looking at and acquiring and partnering with. That's what I'm most excited about, finding really talented entrepreneurs who want to change the industry who can't or are tapping out with their skills or their abilities or financially and asking, how do I get from 50 to 100 people? How do I get from 100 to 200 people? We bring the experience. We bring the capital. We bring structure where they can actually still move things – because we're not 10,000 people or 5,000 people like our competitors are. So, that's what gets me most excited. Then, obviously, there's always something new in our industry, there's always something new, right? It never stops. I remember when I built my first agency, I thought, when I master search, I'm going to be done with this. Affiliate marketing comes along. Oh well. Then I master affiliate marketing. Then social came and I mastered social. Programmatic came. It never ends – and that's also, to some extent, very exciting because you keep having to learn and adapt. At some point, I will age out, where people will tell me, "Tim you know what? Just drink your coffee. You know we have got it because you don't, and you don't get it anymore."

ROB: (Laughs) Ah, so it's always a struggle to try and figure out what things you might be aging out of and what things are just a little weird. It's always a little bit of both.

TIM: That's right. And what's the little bit of bullshit right now in the industry that you can just face over. You don't need to go deep.

ROB: I think there were moments early in social where it felt very experimental. It felt very strange. It felt very frothy. We've been through that on an influencer. You were around. I was around. You look at the crypto world and it seems almost like – I could be dead wrong – I think the thing that's most misunderstood but also well observed now about the dot Com era is everything happened eventually. But it didn't happen then. That's maybe where we're at with crypto. I'm not sure.

TIM: Well, like crypto is one thing, but then think about NFTs, right?

ROB: Yeah, I'm lumping that in. Yeah

TIM: Okay, if you lump it all into one OKR, fair enough. I can talk for hours about my diverse opinions on NFTs and the NFT world. Nevertheless, we have clients who are extremely excited about and who really want to deploy capital, being part of that industry because there's the strong underlying belief of making something really good at the same time. There is this unnecessary social hype on certain topics where I'm thinking, "Guys, you're destroying something that was meant to be really good. I think blockchain and crypto is falling or has fallen into a similar trap where the underlying idea . . . because technically I'm an engineer, right? I got my first pc when I was eleven. Taught myself coding and all this kind of stuff. So, I love the idea of blockchain and decentralized holding of assets and accountability and ledgers. That's amazing. It could solve so many problems in world. The problem is that when dodgecoin comes along in Shibona or whatever, the next thing is, it drags it in the dirt. The underlying technology is incredible. The sad story is people want to get rich fast and lots of them don't.

ROB: That's right. It happened before. People built the worst websites in the world for a couple million bucks back once-upon-a-time early internet.

TIM: But you remember when you could buy 1 pixel on a website or something like that for a thousand dollars and there were these crazy businesses out there and it's coming back, just differently now. My hope is that just like the dot com bubble . . . yes, there was a hype. Yes, there was a crash but, after that an actual industry developed. So, I'm hoping that we're going to go through the same thing with NFTs and some of these offsprings of crypto.

ROB: That makes complete sense. Well, Tim, Thanks for hopping on. Thanks for illuminating us on what's going on in this holding company opportunity, what you're doing with that. I think it's interesting you started and you kind of knew what it looked like to run a large organization. I can imagine starting with 2 people in a closet might not always be the best use of those skills. It's neat to see the industry lining up in a way that that lets us see so much happen so quickly. So, thanks for coming on. Good to have you, Tim.

TIM: Thanks Rob for having me. Thank you so much. Really appreciate it.

ROB: Alright, be well, thanks, bye.