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Viewpoint: Why do the best
and the brightest pick the FBI over ad agencies?
Just a few reasons:
Declining job numbers, low starting salaries, eroding margins.
By Joe Dell’Aquila and Darryl Lindberg
Reprinted from Advertising Age. January 23, 2006.
A recent issue of Fortune reported the top 100 places to work for
M.B.A.s, and while the FBI was No. 99, there was no advertising agency
or holding company on the list.
You might say, “Well, sure, because agencies don’t recruit M.B.A.s
anymore.” How can they? What is the “hook”? This once-glamorous,
high-profile, high-energy, fast-paced cauldron of creativity that Jerry
Della Femina called “the most fun you can have with your clothes on” is
nowhere on the radar screens of the most desirable young people now
entering the work force. Of course, inextricably linked to all those
great attributes that generated the “Jerry-ism” were competitive
salaries. It’s amazing how much more exciting and glamorous a business
can be when one can afford to live above subsistence levels.
If you think we’re exaggerating, consider that the average starting
salary (about $32,000) is about 25% less than the insurance industry,
21% less than that for our largest nonprofit, the federal government,
and 20% less than the starting salary of a librarian, according to a
recent report in The Wall Street Journal. And the salary difference
between agencies and clients for an equivalent title (“marketing
coordinator”) is even greater: 35%. You can see how the “glamour” of
working at an agency can pale in the face of hard cash.
Yet we’ve heard from a number of agencies that say they believe they
should be able to compete with management-consulting firms for top
talent – and seem bewildered why they can’t. When asked what they think
will attract these folks to advertising agencies given the average
starting salary for management-consulting firms is $88,000, the answer
is invariably some variation on the “advertising is a glamorous and
exciting business” theme. To say that agencies just don’t get it doesn’t
begin to cover this kind of blindness.
Little wonder that the traditional agencies are losing business to the
better integrated marketing shops who work “on the ground” in the retail
outlets or service counters – the place where the product or service
meets the consumer. These agencies have a different take on what
constitutes creative selling. They aren’t married to a pool of 30-second
ads and a network buy as the panacea for all marketing communication
ills, and, because their margins haven’t been badly eroded, they can
still afford to hire and train good young people who actually get into
their clients’ business. We see their growth as a growing trend.
Long term, this is a disaster in the making for an industry that is
already ratcheting downward at an ever increasing rate. There are some
who feel the situation is now irretrievable. A great agency is simply
and amalgam of great people. When you don’t get great people you are in
trouble. When you don’t get them for a generation, you have what may be
a dying business.
Agencies Are Losing
So who are the agencies getting? Certainly not the best and brightest.
Agencies now get the people who were turned down for more desirable –
and attractively compensated – employment, or the well-to-do who can
afford to take a flier because they’re not relying on their paycheck to
cover pesky annoyances like food and rent. In either case, agencies are
losing. In the first case, they’re losing their most important asset:
talent. In the second, they’re limiting the broad perspective and
diversity that fuel a great agency.
But why should the best and brightest of our young go into a business
that:
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Has seen an almost 30% decline in jobs since the
end of 2000
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Has starting salaries only slightly higher than
those of quick-serve restaurants
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Has seen its margins erode under constant client
pressure
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Pays an agency president about as much as a
fourth-year investment-banking associate
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Has been among the most unstable of all
businesses
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Has seen its relevance questioned in the
boardrooms of the largest corporations
Advertising is a critical marketing element in a
free economy, and advertising agencies should be both a great business
and a great career opportunity. But they’re not. Agency chiefs seem to
be constantly waiting for the turnaround that’s just over the horizon,
but never seems to arrive. The American Association of Advertising
Agencies is a sponsor of Advertising Week in New York, and drags up
icons form a three-network, pre-cable era in a feeble attempt to show
the importance of the business. There still may be work for Charlie the
Tuna and Mr. Peanut, but not for the talent to create them.
Agencies are constantly bemoaning what they feel is their continuing –
and increasing – lack of importance to their clients. While part of this
is surely a function of not reacting to a changing business environment,
it’s probable that diminishing agency relevance is also directly
proportional to decreasing talent resources. Clients are understandably
reluctant to trust their valuable brands to merely modest talents. That
may at least partially explain why so many clients are seeking the
services of a large number of firms rather than putting all their brand
eggs in one – possibly suspect – agency basket.
What Might Help
It is pointless to try to relive the days when agencies were truly the
“marketing partners” they continue to long to be. It’s time for those in
power at the agencies to take a hard look at the business they’re in now
and take the measures necessary to address the business as it is today –
and hopefully anticipate tomorrow’s business needs as well. Times have
changed, so get over it!
Here are four steps that may help:
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Accept that there’s a problem and stop trying to
turn back the clock.
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Recognize that the world has become truly
media-neutral and structure yourself accordingly.
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Ensure your structure can generate competitive
salaries so you can attract and keep top talent.
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Recognize that, no matter what your structure and
however much talent you have, how important you are to your clients
will always hinge on how well you meet their requirements, rather than
how well you live up to an image of your own creation.
Although we have no doubt that advertising is at
least as fascinating a career as the FBI – or any of the other 99 jobs
on Fortune’s M.B.A. hit parade – it’s obvious that an advertising career
just doesn’t present sufficiently attractive opportunities (real or
perceived) to make it a top choice. Until it does, the best and
brightest will be looking elsewhere. After all, the truth – along with
high salary – is out there. It’s just not in advertising.
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