Talent Wars

Agencies are battling Silicon Valley for the best people. Here's how they can win

Here we go again. The people problem, a perennial fear of agency bigwigs, has begun percolating again over the past year or so, starting in the way that many a digital snowball does: with a blog post.

“Prepare for Battle: The War on Digital Talent” screamed a mid-July headline from digital man-about-industry and Kraft vp of global digital and consumer engagement B. Bonin Bough. The post spawned a handful of news items and panel discussions, which led to still more blog posts, tweets, sharing and digital hand-wringing.

This is not the first time the ad business has squawked about attracting and retaining talent—but it may be the loudest. One reason is that digital media, where the competition for talent is most fierce, is becoming that much more integral to the ad business. Each year, digital ad spend slowly creeps closer to eclipsing its traditional counterpart, and campaigns are built faster and with technology that changes by the week—even TV and radio ads now incorporate digital elements.

At the Monaco Media Forum, Maurice Lévy, CEO of Publicis, declared, “We need to fight with the startups, technology and platform companies for talent, not the banks anymore.” (That the statement was cited by many as a bold, new proclamation may be evidence enough of the problem.)

Advertising needs digital talent, not the other way around. Up-and-coming technologists see Mark Zuckerberg, now a pop culture hero, netting $5 billion in Facebook’s IPO. They see New York Mayor Michael Bloomberg touting the vibrancy of the city’s entrepreneurial scene. They see their peers winning rounds of venture money with nothing but an idea. And those idea-stage companies with venture money are hiring, aggressively.

It’s become something of a joke at the New York Tech Meetup demos. Every five-minute presentation—delivered enthusiastically to a crowd of 700—ends with a less enthusiastic: “Oh, and, like everyone else, we’re hiring.” The founders deliver their offers hopelessly, knowing they’ll be lost in a desperate-sounding “Work for us!” chorus. Out of the 297 startups listed on New York Tech Meetup’s “Made in NY” site, 190 are actively hiring. The city’s hottest Internet companies can’t hire fast enough.

It’s no different out West, where the battle for talent even reaches down to the intern level. At both Google and Apple, recruiting is so intense that the companies, along with Adobe, Intel, Pixar, Lucasfilm and Intuit, conspired to form a “no-poach” gentlemen’s agreement. The move earned the group an antitrust lawsuit.

But on Madison Avenue, plenty of top-tier digital agencies have 30—some as many as 60—open positions they’re scrambling to fill. With so much competition for the same talent, agencies need a fresh appeal. Essentially, agencies need to become cool again.

Digital advertising jobs would seem to be cool, given that’s where the innovation is happening in the industry. But digital is also still fighting the media establishment, where change is slow. Thanks to the disconnect between time spent and ad dollars spent, it would be easy to argue that the ad industry remains in denial about the Internet. Every doomsday prediction about the demise of old media can today be shot down with a simple point to the scoreboard.

TV advertising, a $68 billion business, certainly isn’t going away. Yet it grew by just 2.4 percent last year. Compare that with the 22 percent uptick of digital ad spend, which some projections have topping that of TV by 2016. Even static TV spots are becoming more digital as second-screen experiences on mobile, tablets and desktops integrate brands. One-third of this year’s Super Bowl ads used Shazam’s sound-recognition technology to digitally connect with viewers. Those deals were not the TV team’s ideas. Likewise, radio advertising, a $16 billion business, isn’t disappearing yet is becoming more digital as streaming services like Pandora and Spotify make aggressive bids for consumers and advertising budgets.

“Every industry debates whether the Internet will disrupt their business,” says Aaron Shapiro, CEO of digital agency Huge. “In the beginning, everyone says, ‘No, no—our business is safe.’ But it’s only a matter of time before digital disrupts every industry that exists in our economy.”

Traditional agencies see the writing on the wall, even as they adjust for a leaner 2012 and execute layoffs—and it comes as no surprise the positions they’re cutting are not digital. When 58 staffers at Ogilvy & Mather and OgilvyOne were given walking papers in January, the cuts affected those employees lacking digital and mobile marketing skills, sources tell Adweek. A few weeks later, Crispin Porter + Bogusky terminated 43 of its 900 staffers, a move CEO Andrew Keller says reflects the firm’s adjustment to changing economics. CP+B must be “leaner and more flexible than ever,” he pointed out at the time.

“There’s no question the inability to hire is holding back growth at the agencies,” says Alan Cutter, CEO and founder of AC Lion, a recruiting agency. “They say all the time, ‘Money is not an issue. New business is not an issue. We need people.’”

For example, last year the agency Huge doubled in size, Shapiro points out, but it could have grown much faster had the firm been able to staff up in tandem. The 450-person shop now has around 50 open positions. AKQA, now up to 1,200 employees, has 60 to 90 open positions, often multiples of the same job, says Jennifer Remling, the agency’s director of global recruiting. AKQA awards any employee who refers a new hire with a cash bonus and a luxury trip.

Unicorn Hunting
Huge received 26,000 resumes last year—more than 80 per day—yet still couldn’t fill 50 jobs. There’s a disconnect between applicants and openings, and the problem is somewhat existential. Agencies seek hybrid workers who can write code as well as write copy. They want graphic designers who are also information architects—and they want them with a few years of experience. True creative technologists, with superior technical and creative talents, are so rare that one recruiter likens them to unicorns. (Still another calls them “five-headed monsters.”) Attracting digital talent is difficult enough—attracting highly sought-after, experienced talent exacerbates the problem.

Wieden + Kennedy’s senior management recognizes that its ideal candidates—“the Leonardo da Vincis, the Renaissance men and women who can create genuine art and technology”—are few and far between, says Igor Clark, the agency’s creative technology director. Wieden + Kennedy often hires these so-called da Vincis—many of them talented and ambitious enough to start their own businesses—as part-time consultants so it can benefit from their ideas and expertise.

The strategy often pays off. Consider James Gross and Noah Brier, formerly of The Barbarian Group, who last year launched Percolate, a recommendation engine for brands. Or Adam Leibsohn, who left Anomaly last year to start Voyurl, a browser plugin that helps Web surfers profit from their personal data. Then there’s Millie Sensat, a creative director who left Organic to co-found Clothia, a fashion startup. Even Richard Exon, CEO of Rainey Kelly Campbell Roalfe/Y&R, and his creative director Damon Collins abandoned their company last fall to launch a still-to-be-named startup.

Turnover at agencies is as high as 30 percent on top accounts, according to Matt Straz, founder and CEO of Namely. “There’s only one other industry that has that high of a turnover rate, and that’s the hospitality industry,” he says.

Straz spent a decade at MEC before leaving to start his own company, which has built a dashboard for agencies to “check the vital signs” of their workforce, he says. Put more bluntly, Namely susses out those who are thinking of leaving their jobs and assists agencies in trying to change their minds.

The industry is also getting more aggressive, with the American Association of Advertising Agencies last month rolling out a website aimed at enhancing advertising’s image among young people. But creative technologists, product designers and coders the industry is attempting to woo aren’t impressed by large organizations where process, hierarchy, bureaucracy and—most egregious of all—cubicles—are the order of the day, says Shirley Engelmeier, CEO of recruiting firm InclusionINC.

It’s the dreaded millennial theme: members of that generation want their voices heard from day one, they want to grow quickly within the organization and they want responsibility. They want to stay late, and they want to be allowed to experiment. “They are intensely passionate if they are allowed to be included,” Engelmeier says.

Be a Startup
Some contend that the agencies best positioned to attract and keep talent are those that act like startups. Agencies certainly are prone to tout the versatility of their work—you’ll work on something different every month, they often come promising. But at a big agency, the waterfall structure often requires that tasks be broken down to a menial level. They often are less collaborative, opinions go unsolicited and sometimes clients will nix entire projects after months of work, as any agency insider knows.

That’s why Andrew Mercando, product designer at R/GA, decided to cross over to a tech company. Mercando says he noticed the range of projects his sister worked on as head of product development at Hunch, a startup that last year was sold to eBay. While he worked exclusively on wire frames, his sister was designing a mobile app, creating visual treatments and building things, all the while collaborating with the engineers and making her voice heard. Last fall, he joined Skillshare, a community workshop startup.

It’s a common tale. “In the agency world, you might be a media buyer or supervisor, and you’re just a cog in the wheel,” observes AC Lion’s Cutter. “At a startup, you have access to the CEO and have a say in developing strategy.”

Agencies can’t recreate that kind of “your opinion matters” experience for each employee, naturally—they have big accounts, deadlines and shareholders to worry about, after all. But within the agency, they can recreate a flexible startup-like experience that appeals to employees most at risk for flight.

The best example may be Google’s “20 percent time” perk, which grants employees one day each week to work on a pet project outside their job descriptions. Agencies increasingly are copying the model with internal labs and skunkworks programs, encouraging innovation for the sake of innovation.

Sometimes, there are pitfalls. Take the labs arm of BBH, a 928-person agency with billings of more than $1.5 billion, which garnered national attention in March—much of it negative—for its guerrilla “Homeless Hotspots” project at South by Southwest. Meanwhile, Made by Many, a London creative agency with 31 employees, built an Instagram-like app called Picle as a side project; in just one month, 50,000 people downloaded it.

The natural extension of a labs program is the in-agency incubator. For the purposes of staying up on technology or grabbing a potential client’s attention, agencies like W+K, Rockfish Interactive and Ignited have invested in their own incubators. The result is a crop of in-house startups, with the added bonus of a startup-style infusion of nimbleness, experimentation and innovation.

Peer-influencer platform Crowdtap began inside Brooklyn creative agency Mr Youth. Now it is a stand-alone business with $10 million in VC backing, including contributions from Mr Youth. W+K’s cloud computing cost-assessment company Cloudability launched last year, as did Urban Airship, the agency’s mobile app push notifier. Rockfish has graduated 10 startups from its labs division, including CouponFactory and TidyTweet.

The agency incubator can be a powerful recruiting tool. Not only do employees get to work on fun pet projects, but they can aspire to one day spin their projects out of the agency—and find themselves at startups after all. Agencies get exposure to useful innovation, as well as street cred among techies.

Agencies less keen on in-house entrepreneurship have focused their efforts on in-house training.

AKQA’s internship program features training that is so robust the agency ends up hiring 80 percent of its interns. The firm hosts an annual student ad campaign in collaboration with Cannes, called Future Lions, which became a source of new hires for the firm, as well as Droga5, W+K and Crispin Porter + Bogusky.

Once they’re in, it’s important to let young, passionate employees know where they could be in five years and how they’ll get there, especially since turnover is greatest at the two-to-three-year mark, according to Cutter. “Agencies have more career development resources than startups—they have the ability to pay for an MBA,” he says.

For agencies to keep talent, it comes down to a concept they already are intimately familiar with: engagement. Agencies already make it a priority for their clients, as Engelmeier points out. If they want to win the talent wars, they’ll have to start doing it for themselves as well.