This week we launched Namely, a company that is developing a team management system for advertising companies. With billions of dollars being invested in automating the buying and selling of media, our focus on people may seem unusual. But attracting, retaining and expanding advertising’s human resources is the most critical issue facing the industry today. Here’s what we see:
Advertising is a massive human enterprise. The top ten advertising agency holding companies employ a combined 370,000 full time employees worldwide, with thousands more employed as consultants, freelancers and outsourced team members.
Talent is a big investment. Sir Martin Sorrell, CEO of WPP—the world’s largest advertising agency holding company—estimates that his company spends $9 billion each year on employee compensation. The other holding companies spend billions more on top of that.
Competition for talent is fierce. “We need to fight with start ups, technology and platform companies for talent, not just banks anymore!” Maurice Levy, CEO of Publicis Groupe, recently said. Venture capital-backed startups have added a whole new dimension to the talent crunch that advertising agencies are now facing.
Turnover is high. It’s estimated that advertising agencies have an annual employee turnover rate of upwards of 30%. To put this in perspective, only the hospitality industry—people who work at hotels and golf courses—has a higher rate (37%). As a result, agency executives are constantly working to retain talent and recruit new employees. “Talent is the single most important thing that I do,” Miles Nadal, CEO of MDC Partners, remarked last year.
Open positions are numerous: I recently spoke to an agency executive about a large account that had 17 open positions. Mid-level positions seem to be the hardest to fill.
Ad tech will be solved. At some point, the advertising infrastructure will be built and our focus will shift back to the human element. In fact, the systems that we use today to manage media buying may eventually become linked to the systems that we use to manage our people.
It’s time to build the tools that will help advertising and its people succeed.