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I worked at a smaller shop.
Pros: less politics. better hours. better pay [usually]. clients are usually more grateful for the work. more opportunities to work on different types of clients and more exposure to different areas.
Cons: spread thin. smaller budgets = less staff. that also means wearing more hats - you’ll see VPs doing reporting. less budget can also mean less resources. selling a $50K measurement test to a client spending $2 million a year is much harder than selling one to a client spending $20.
I came from a smaller agency and agree with all of VP's points above. If they hire carefully, the culture is also much stronger and getting advocates for analytics was a lot easier. I couldn't name one account that didn't proactively try to sell my team in because we forged such great relationships in the office.
I actually left because of mobility, in the sense that I felt I couldn't get the learning opportunities I wanted to move forward because of how small or niche the client requests/scopes were. For example, if I wanted to lead... web analytics projects but all of our clients wanted social media measurement, there wasn't much leadership could do in the short term to address that.
Echoing what AM1 said - sometimes small agencies take work to keep the lights. The positive answer is it can strengthen your skills. the negative answer is it can be clients you don’t want to work on or outside your core competencies.