Talent is the lifeblood of advertising agencies: smart people with good ideas that know how to put brands at the center of culture.
Agencies will tell you that they know this. But when you look at the state of the industry today, it’s clear that for too long, they’ve sacrificed the pay, work-life balance and benefits that people are looking for in their careers.
So just as the ad market is rebounding to historic highs after the depths of the pandemic, and just as agencies have clinched major, big-ticket accounts that will require them to staff up, talent is leaving the industry in droves — and it’s not clear if they’re coming back.
GroupM predicts the global ad market will grow 22.5% this year and exceed $1 trillion by 2025, a historic projection driven by the rise of e-commerce, digital endemic businesses and new entrants to the economy. It's likely the fastest growth rate in the industry’s history, and it’s topping 2019 levels, too.
As consumer habits shift, major clients, coming off a tough financial year in 2020, spent 2021 looking for new partners that could deliver on their needs in a changed world while softening the financial blow of the pandemic.
This created a dynamic where just after shedding close to 50,000 jobs globally, agencies geared up for massive, cross-team pitches with severely short-staffed teams. Coca-Cola, Meta, Philips, Eli Lilly, Home Depot, Chanel and Unilever are just a handful of accounts in the multi-million to billion dollar-range that agencies fought tooth and nail for this year.
The irony of winning a big-ticket account, as marketing consultancy Sparrow Advisors points out in its latest blog post, is that agencies have to offer steep discounts to win, which means the big prize can translate into meager profits. Agencies that are cutting prices to the bone can’t afford to pay talent more for the massive amounts of new work they’ve just acquired, and the vicious cycle continues.
The issue isn’t simply that agencies don’t have enough talent to staff key accounts; it’s that they’re being hollowed out among key groups. The pandemic has pushed women out of the workforce at astonishing rates, and advertising hasn’t been spared.
According to the latest #Inclusive100 report from She Runs It, less than half of all jobs across the agency, media and tech industries are held by women, down nearly 10% from 2020. Advertising has been disproportionately impacted compared to other industries, per the report.
Agencies are talking a lot about how important it is to lure talent back into the industry, but it’s not really clear what they’re doing to make the case for why people should choose adland over a tech company, a consultancy or going in-house at a brand.
So far, beyond Publicis Groupe’s new initiative that lets employees work for six weeks every year from another country where the group has an office, the hybrid work conversation has, well, lacked creativity. The issue at hand is bigger than determining if people will work from home three days a week or two, or whether to give up office space.
Ultimately, however, there are only so many bells and whistles you can attach to a job to make it attractive, especially as employees gain more leverage than ever before. If agencies continue to undervalue their services and race to the bottom to secure big clients on their rosters, they will also continue to struggle attracting and retaining talent as they have in the past year.
But agencies can’t do it alone. Clients also must shift their criteria to properly value and compensate agencies for their work. Without that as a catalyst, change will be slow and incremental, if at all.
One thing is for sure: talent isn’t going to wait around for the industry to get its act together. It’s time to put those creative and strategic juices to work to build a bold future for this industry that makes talent want to work in it.
The ball is in the employees' court. Start playing the game.