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.

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