Some global firms ‘won’t survive in Australia’, says Simon Ryan; locals to thrive in new economy
During a session at Mumbrella360, founder and CEO of RyanCap, Simon Ryan reflected on his journey so far, establishing an Australian digital-first advertising and marketing business, after a career working for global multinational groups.
Speaking to global media advisor, and his former boss at Mediacom in Australia, Anne Parsons in a Tech Talk session, Ryan said, “You can see the market is changing,”.
“You can see that digital is becoming more of a focus. You can see that legacy ways of making money and legacy fee arrangements with clients are changing. You’ve got to assess that constantly. What we’re talking about today may change in two years and you’ve got to assess and constantly change.”
Ryan spoke about the freedom he and his young business has in the face of these changes, highlighted by what is happening in his old stomping grounds.
“I think what we’re seeing now in the global network side of things, is that change has almost been forced upon them. They’re cutting brands, they’re slowing on hiring, they’re trying to invest in some areas of focus and growth, which is good, but every day you’re reading the trade press or in the international press around global agency groups, changing brands and slashing 90 brands to 30, or changing 23 brands to 10.
Ryan said the increased rationalisation is “real”, in particular for the networks, and it stems from clients spending far more on digital and in-housing capabilities. “Disintermediation is real and live.”
“When you are a big global network and you are used to making money a certain way, and all of a sudden that is taken away, you are then forced to rationalise and you are forced to change.”
He said prior to his departure, he voiced his desire to “take the pressure off the business”, however, transformation without sustained growth will always be difficult to justify to shareholders.
“So in my view, and again, it was a suggestion in 2018 that we look at all that, but to be fair, as big listed businesses, whether you’re local or global, you need to continue to provide shareholder value. So if you went to shareholders and said, I’m actually gonna have to take the foot off the accelerator for two years, and I’m actually going to just focus on the inner machinations of the business and reduce brands, a lot of shareholders would just say ‘well I don’t think you’re a good share for me to have anymore’.”
The constant battle of keeping stakeholders, shareholders, and boards happy, versus keeping up with client demands, making money, and providing capability service to where clients actually want to be was “where RyanCap was born”, he said.
Now RyanCap is two years old, and he said after successfully setting up its back end, “we started going to market, and we’ve pitched and won – because we have a very uncomplicated proposition”.
“If you make a mistake in a big global, you certainly hear about it and you might get emails on it for three or four months, and I’m not immune to that. But when it is a locally-owned business, controlled by shareholders and people who work in business, you live and die by your decisions. If you make a mistake, you fix it quickly and you move on. There’s no one telling us what to do besides our staff and our clients. There’s no one giving us directives around what we must do or telling us to open a brand and then close one.”
Local has been the mantra for Ryan and a large part of his selling point since launching, and he says in contrast to the “globals”, the point of difference has always been his “Australia-out” strategy.
“They see Australia as a 25 million people market, $17 billion ad spend, $2 billion consultancy market, and a $90 million tech and data market. They look at it from out to in, ‘how much can they get out of it? then ship it back to the mothership’ That is fine. That is not my strategy. Mine is to focus on the clients, focus on their capability here, and keep investing in the business.”
The result of all this transformation, he said, is and will continue to be the “evolution of the local”.
“The local businesses will keep growing because the talent, ultimately, wants to work for businesses where they are looked after, which in my view is more the locals. And what you’re going to see is a shift percentage-wise around how much power or how much control or how much interaction with clients that the globals have versus the locals.”
“There are some outstanding global businesses out there, and I used to work for one. But I think with all the change that is happening, I think they’re going to be smaller businesses. And I think that some of them won’t survive in Australia.”
Ryvalmedia is up for media agency of the year at this Thursday’s Mumbrella Awards, held at the Royal Randwick.