Last week's report from the Interactive Advertising Bureau that Internet ad spending increased by 38 percent to nearly $4 billion in the first quarter is certainly welcome news for the interactive agencies expanding alongside the medium, but it also throws a spotlight on one of the biggest obstacles to meeting the demand: a dearth of qualified talent.
Top shops R/GA, Tribal DDB, Organic and AKQA have dozens of openings, after already expanding workforces by 20 percent or more in the last year. Shortages are most notable in key areas like analytics, site design and project management, and the squeeze is worst in the middle ranks, executives said, which are thin because the industry did not hire many new recruits during the dot-com bust five years ago.
"Three years ago it was about finding new business," said Clark Kokich, worldwide president of aQuantive's Avenue A/Razorfish, the largest Web agency. "Now it's about finding new people."
That's likely to continue. Web advertising still accounts for about 5 percent of ad spending, still not nearly matching the 15 percent of media consumption time spent online. And those figures don't take into account the increased spending on Web site development, viral marketing and other initiatives.
"The industry is growing at a clip faster than there are people coming into the sector," said Sarah Fay, U.S. president of Isobar, the digital network of Aegis Group. It has about 40 openings in its U.S. shops, which include Carat Fusion and iProspect. Bob Greenberg, CEO of R/GA, which has 45 openings after already adding 100 people this year to top 450, said the pinch could inhibit growth: "We're turning away work because we can't hire enough people."
The talent crunch is affecting most interactive shops. Take Omnicom's Organic. The 300-person San Francisco agency currently has 46 openings in everything from creative directors to media analysts to designers. Tight talent markets there and in New York have forced Organic to hire more people in its Toronto office.
On top of the need to fill junior roles and middle management, Organic has seen two top executives leave in recent months for opportunities outside the world of Web agencies. Heidi Browning, executive media director, left in November to take a position at Fox Interactive Media. Later this month, its chief creative officer, Colleen DeCourcy, is departing to be chief experience officer at JWT. "The market's really, really liquid, and that's because there's so much more interest in the channel," said Mark Kingdon, Organic's CEO. "There are a lot more opportunities for people."
Greenberg predicts traditional agencies will step up their efforts to poach top people as clients shift spending to digital initiatives traditional agencies are unprepared to handle. "They're going to be desperate to hire away people from interactive agencies," he said.
Agencies are also vying for talent with startups again. Matt Freeman, CEO of Omnicom's Tribal DDB, which has about 75 openings in the U.S., said the new wave of Web 2.0 companies can offer compelling opportunities. "It's a little like 1999 all over again," he said. "There's a tremendous amount of startup activity, entrepreneurial excitement and speculative career moves."
Web shops are trying myriad tactics to fill their ranks. Fay said Isobar agencies are recruiting heavily outside of the ad industry, training new workers to handle jobs like assistant media planner and algorithmic search specialist. R/GA has four full-time recruiters hunting for talent. Tribal DDB emphasizes its global network, which lets young employees take short-term assignments in distant locales. Agency.com even puts stock in its weekly happy hours and poker nights. And all shops emphasize the chance to do cutting-edge work on big brands. "You need to approach recruiting like you do new business development," said Kingdon.