Ad Talent May Head Elsewhere

NEW YORK  Where will the talent go as advertising agencies lay off staff by the hundreds?

Some may find homes at smaller independent agencies with greater cost flexibility, some may establish their own boutique shops or some may leave the U.S. entirely for foreign markets where the demand for advertising is holding up a little better. Others, however, are looking beyond agencies to client-side opportunities, particularly at Web-based companies hungry for content and the talent to produce it.

In September, The Talent Business, a global headhunter that places senior-level creatives, managers and strategic planners, helped Google Creative Lab in New York hire Stuart Smith, a planning director at Wieden + Kennedy in London, in a similar role at Google.

Smith’s move came a year after Andy Berndt left his role as co-president of Ogilvy & Mather’s New York office to become managing director at Google Creative Lab. In addition, The Talent Business is now placing agency creatives at companies that put on live events.

“The businesses are all about content,” said Gary Stolkin, global CEO of the firm, which has offices in New York, London, Singapore, Shanghai and Sao Paulo. “If you are producing content at an ad agency, there are lots of other businesses that will be interested in you.”

Not unlike the parts suppliers that feed the teetering auto industry, headhunters are inextricably tied to the agencies that pay their commissions.

And as agencies, particularly those within public holding companies, increasingly focus on cutting costs, recruiters will continue to adapt and consider new avenues for placing talent, particularly as the recession roars on.

“I know recessions and there has been nothing like this before,” said Susan Friedman of Susan Friedman Ltd. in New York, who has been in the headhunting business for 23 years.

In recent months, top holding companies have directed their agencies to reduce all discretionary costs, as they cope with significant cutbacks in client spending related to the recession.

In November, WPP Group froze all hiring and told agency leaders to cease using outside employment services, at least until February, when WPP will reassess the financial picture. Omnicom Group CEO John Wren, meanwhile, directed his shops to leave positions open “where it’s sensible,” and Interpublic Group told its agencies to monitor staffing levels amid this time of economic uncertainty.

Major agency networks, such as Omnicom’s BBDO and WPP’s Ogilvy & Mather, have since laid off hundreds of staffers, creating a flood of talent looking for work even as agency demand dries up. Such scenarios have prompted recruiters to pursue alternative outlets for job candidates.

Last year, Friedman found work for creatives at architectural firms that needed marketing help, be it the development of a Web site, collateral or ads. Her foray into such firms was not random, given her longstanding interest in the field. But until last year, she hadn’t placed any industry creatives there. Since then, she has placed five.

Friedman also is leaning more heavily on corporations than in the past and some, like Sony Music, Barnes & Noble and Samsung, have been receptive. She attributed successful placements on the corporate side in part to knowing former ad execs who now work there. “I have known these people in the advertising world and they are now on the corporate side,” she said. “I’m using any contacts I can.”

Some headhunters have created new services for those who are affected. Talent Zoo in Atlanta last year started offering career counseling advice to agency staffers who lost their jobs. Agencies hire Talent Zoo to help laid off staffers get their resumes in shape as they prepare to search for new jobs, said Amy Hoover, executive vice president at the firm.
Despite the overall bleak picture, recruiters continue to see demand for certain skills, such as in the digital realm, and in growing markets like Latin America and Asia. Headhunters have redoubled their efforts in those areas to compensate for falloffs elsewhere.

“We think that 2009 will be tough,” said Stolkin, who described last year as flat compared to 2007. “Unfortunately, with the growth in Asia and [Latin America], there will be an equal decline in the U.S. and other markets.”

Naturally, headhunters, like the agencies they work for, also have been under pressure to cut costs. Last year, Talent Zoo, The Talent Business, The Gumbinner Co. and Friedman either trimmed their staffs or reduced the hours that associates work. Additionally, The Talent Business consolidated three U.S. offices — in New York, San Francisco and Portland, Ore.-into one in New York.

A falloff in job orders has also prompted headhunters to put more energy into new business development. “I went very heavily into digital and direct,” said Paul S. Gumbinner, president of The Gumbinner Co. in New York. “I’m actually recruiting new accounts. Before I was comfortable with my existing clients.”

Smaller firms like The Creative Register in Westport, Conn., have benefitted from a lack of overhead. “I adapted in 2001,” when the then six-person firm became a sole proprietorship, said owner Dany Lennon. “I work out of my house, I have low overhead, I work worldwide and I’m not expensive.”