Gideon Spanier: London is fertile ground for ad start-ups defying Brexit

Start-up fever is gripping London’s advertising agency scene. There has not been such a wave of launches and M&A deals in the independent sector for years, perhaps since 2012.

The entrepreneurs and former agency chiefs who are setting up these new businesses or taking investment aren’t worried about uncertainty over Brexit.

They can see how technology has disrupted media and lowered barriers to entry, creating gaps in the market for nimbler operators as some of the big global agency groups that dominated for the last decade struggle to adapt.

That’s because scale, particularly in ad-buying, no longer counts for as much in an online world where data and analytics are now key, and agencies need a more flexible, consultative approach as clients can manage some of their digital marketing in-house.

The new breed of homegrown agencies can be divided into several groups.

The first are the pioneers in search advertising and digital content creation that are now mature enough to attract M&A interest.

They include Jellyfish, which is based in The Shard and has just taken investment from French conglomerate Fimalac in a £500 million deal, Brainlabs, which is in Old Street and sold a stake to private equity firm Livingbridge in March, and Oliver, which is based near Sadler’s Wells and joined brand tech group You & Mr Jones in January.

Essence, which made its name as Google’s media agency and sold to WPP four years ago, also fits into this category as arguably London’s most successful digital agency of the last decade.

Then there is the rash of start-ups, including a trio that launched in recent weeks: strategy agency The Barber Shop, news and magazine specialist The Press Business and ad buyer Walk-In Media, which aims to be accessible to smaller and mid-sized clients.

The founders are all former executives from big agency networks who want to build more creative, transparent and agile businesses.

Several studio-type outfits, including Uncommon Creative Studio and Wonderhood Studios, have also launched in the last 24 months as brands ask for a more flexible approach to creating content, not just TV ads.