Aurora Magazine

Promoting excellence in advertising

Published in Nov-Dec 2018

Will agencies bite the bullet?

Published Jan 22, 2019 10:32am
Agencies must embrace a fluid marketplace model to sustain creativity and profits.

The young and the creative are the engines that drive the advertising industry. However, these dynamic and ambitious young people who once flocked to the business with dreams of creating the next breakthrough campaign are no longer so keen to be a part of the adventure ad agencies once promised. At least, that is the view of several people at the highest echelons of the industry and the fact that even well-established agencies are struggling to retain their best and brightest is alarming. However, what may be even more alarming is the fact that many agencies are not only failing to stop this talent exodus, their perception of why this is happening is based on a fallacious assumption. The burden of blame is placed squarely on the shoulders of Millennials; the fickle job-hoppers with short attention spans and a desire for instant gratification (promotions, increments, foreign trips, et al) but with no intent to learn or work hard to achieve their goals. The sad truth, however, is that the reason why promising and talented people are leaving agencies is quite different and more layered than what some agency bigwigs presume it to be.

A question of flexibility – and independence

Creative young people who have been a part of the industry for a few years are now prioritising flexible work arrangements and professional development over job security and compensation (source: research by LinkedIn and 4As). As a result of this change in job expectations, they are quick to leave agencies, no matter how big, even when they are well-paid if they don’t find fulfilment and opportunities to learn. They are also brave enough to venture out on their own and offer their services directly to clients.

A case in point is Salman Ali, co-Founder, Sandpaper, who left an Associate Director Planning position at JWT to set up his own agency a few months ago. His reasons for doing so are: “I wanted to create my own kind of agency because after six years, I was tired of the long working hours and the repetitive nature of the work.” Ali’s story is not unusual. The two other co-Founders of Sandpaper shared similar reasons for leaving.


Unshackled from managers and corporate norms, freelancers think out-of-the-box and come up with innovative ideas that break through the clutter – which is precisely what smart brand managers are demanding today, having realised that rolling out big budget TVCs shot in Thailand and featuring celebrities are failing to generate the recall and talkability they seek from their audiences.


The question is: Can agencies stem this outflow? For starters, they need to understand that making people work long hours and over weekends does not yield quality creative work. In the view of seasoned agency professionals who have recently taken on a new identity of entrepreneurs by setting up their own shops, traditional agencies must change the way they treat their most valuable asset – their resources – because agencies have always been as good as their people. Rather than expecting employees to spend a specified number of hours shackled to their desks, allowing them the flexibility to set their own schedule and work from where they want to would be more productive. Furthermore, it is a given that when it comes to inspiration, people are more likely to deliver in an environment that stimulates their energy and thinking. It was this recognition that prompted Muzaffar Manghi (whose last stint at an agency was as GM, Adcom Leo Burnett) to set up Manghi Communication Solutions (MCS) last year.

MCS has different arrangements with the team they work with. Some of their most senior resources, such as their strategy lead, work from home and according to Manghi, they joined MCS because they do not have to be physically present in a brick-and-mortar office. It is also this working philosophy that allows MCS to pool in resources from Dubai, India and South Africa and the reason why this year-old agency has already delivered a number of firsts for Pakistan – an AR catalogue, recycled seed bags for Sapphire and a series of social experiments tying in patriotism with Hilal’s Bold deodorant. As Manghi puts it: “The number of people I have sitting in the office has no bearing on the quality of work MCS puts out; what matters is the skill set and expertise of my team.” Clearly, if agencies are to retain people with a knack for ideation, they will have to change the way they work.

A changing client-agency dynamic

In addition to changing job expectations of their talent pool, agencies are faced with changing client expectations. An increasing number of forward-thinking clients are moving away from the retainer model and this poses a serious problem because traditional agencies are geared to generate 80% of their revenue from retainers. That may be so, but the reality is that clients are shopping for new agencies on a project-to-project basis and are open to awarding campaigns and projects to talented freelancers or new-age agencies such as MCS or Sandpaper. The result is a buyer’s market because given this growing pool of alternatives, clients no longer have to sign on traditional agencies. The benefit? First, it costs less than the retainers they pay their agencies. Second, unshackled from managers and corporate norms, freelancers think out-of-the-box and come up with innovative ideas that break through the clutter – which is precisely what smart brand managers are demanding today, having realised that rolling out big budget TVCs shot in Thailand and featuring celebrities are failing to generate the recall and talkability they seek from their audiences.

The problem is that agencies are slow to smell the coffee and wake up to the fact that they are losing out on outstanding creative talent and losing business as well, as clients go elsewhere in search for good ideas – and this may explain why, despite increasing media ad spends (in FY 2015-16 the increase was 14% and in FY 2016-17, it was 15% over the previous fiscal year [source: Aurora Fact File]) agencies claim they are facing a financial crunch. So what can agencies do to change their circumstances?

Changing the agency mindset

Instead of blaming people for leaving, agencies should start thinking about how they can leverage talented resources who want flexibility and the freedom to explore alternative paths at the same time (blogging, content writing, designing, mobile app development and vlogging). In doing so, agencies would benefit in three ways. Firstly, hiring people eager to develop multidisciplinary skills is a definite advantage. The nature of the careers young people are interested in today dictate that they master diverse skills – an eye for aesthetics as well as a way with words are both needed to run a successful blog, for instance. The breadth and depth of experience such people bring to the drawing board in terms of ideation can be invaluable as the clients who have started to work with them are realising. Secondly, as clients move away from a fixed retainer to a project model, it is in the agencies’ interest to work with people who do not add to their overheads in terms of maintaining offices in different cities, electricity bills that run up to millions of rupees and fixed salary payments. A creative yet fluid workforce can be a win-win for agencies. Thirdly, the effect of technology is knocking hard on the doors of every single ad agency in Pakistan and the need to have digitally-savvy people expert at amplifying the brand message through technology and with the knowledge of how to use big data to yield insights for improved targeting is a no-brainer.


The problem is that agencies are slow to smell the coffee and wake up to the fact that they are losing out on outstanding creative talent and losing business as well, as clients go elsewhere in search for good ideas – and this may explain why, despite increasing media ad spends (in FY 2015-16 the increase was 14% and in FY 2016-17, it was 15% over the previous fiscal year [source: Aurora Fact File]) agencies claim they are facing a financial crunch. So what can agencies do to change their circumstances?


Agencies such as Sandpaper and Wundernerf are already taking advantage of the diverse skill sets freelancers bring and are avoiding retainer-based clients. In effect, they have opted to follow a ‘gig-driven agency model’ defined by smaller setups with a core of three to six full-time ‘employee-directors’ able to scale up or down according to the number of projects in the pipeline. In this way, they benefit by avoiding overheads and empty desks and bring in qualified and talented freelancers whom they are able to compensate well. The other model that agencies such as IAL Saatchi & Saatchi have implemented to overcome the stranglehold of the retainer is the ‘Hollywood model’, a trend that has become common internationally and entails large agencies bringing together experts for specific projects who go their separate ways once they have delivered on their brief.

Both the gig and the Hollywood models have their advantages, and yes, like everything else they will also have their disadvantages. However, they offer agencies a solution to the waning fixed retainer model and the spectre of brands looking elsewhere for their creative solutions. As Khalid Naseem, Director Strategy, Firebolt63, says, “agencies should convince brands that rather than the hassle of dealing with consultants, freelancers, production houses and TVC directors, it will be far more effective for them to let their agencies do this for them.”

So will advertising agencies bite the bullet? Accept that times have irrevocably changed; that in a more efficiency-driven economy, fixed retainers will soon be a thing of the past; that technology is upending every single process of the business and is imposing its own rules; that clients are searching for innovative ways to deliver their brand message and will increasingly find their creative solutions from among a growing pool of new-age agencies and freelancers, a pool the agencies are contributing to by sticking to old rules and ways?

EDITORIAL

When the Aurora team first mooted the idea of this special issue, we were unsure where it would ultimately lead to. The notion was to explore whether Pakistani advertising agencies were still able to attract and retain creative talent. Were agencies, for the most part, their first go-to destination? Linked to this were two underlying questions: in an increasingly technology-driven world, to what extent has the role of the creative department changed, and how are advertising agencies reacting to the swirls of change knocking on their doors?

As we drilled down further, it became apparent that advertising agencies remain a valid option for bright and enthusiastic young people from across all disciplines of the profession. They provide an enabling environment for the flourishing of talent and a respectable (and to a large extent dependable) source of income in an increasingly competitive and tight job market. They are also an attractive employment opportunity for women; as a matter of fact, along with media, ad agencies are probably one of the few career paths that draw in a significant proportion of women. However, what our investigations uncovered was the existence of significant amounts of dissatisfaction within agencies, especially at the creative level.

To be fair to the agencies, dissatisfaction of one sort or another will always exist in a creative milieu. Youth and passion will always come with their own set of angst. Yet the malaise today is of a different nature because the young are different today. This could very well have been said of every preceding generation, but the differences today are significant because of technology.

Until recently, it took 25 to 30 years to distinguish one generation from another; today, the timeframe has contracted to 20 years or even less. A few years ago, the new world order was defined by the Millennials. Today, we are discussing the growing impact of Gen Z (also described as iGen or Centennials; these multiple nomenclatures in themselves pointing to the problem). The Millennials were perhaps the seminal generation in terms of digital nativism – yet, the effect of these contracting generational timeframes will soon result in the convergence within the workplace of Gen X, the Millennials and Gen Z. So yes, today’s young are different because the effects of technology and its adoption are propelling them further and faster into new and unknown worlds. Their attention spans are shorter and what they want, they want now, and although they can be guided, directed and even moulded, they cannot be denied – and they will bring their mindsets, attitudes, expectations, aspirations and passions to their places of work and in the context of the advertising agency – that (perceived) glamour place of creative expression and avant gardisme – these young people should, ideally, find themselves in their natural habitat.

Unfortunately, the reality is otherwise. Run by Baby Boomers and Gen Xers, advertising agencies (not only in Pakistan) are at sea. Their models are under attack and may soon be extinct. Their role as the ultimate brand custodians has been so badly undermined that nobody takes it seriously (apart perhaps from the agencies themselves) and along with this, their control over the ‘creative process’ is tenuous at best.

In this context, to say that advertising agencies have to reinvent themselves is both easy and glib. Nobody, nowhere, has the faintest notion of what the advertising agency of the future will be like. Yes, serious people have serious ideas and instincts about what the ad agency of the future may or should be, but the pace of change is unrelenting and unforgiving, Until recently, the threat for agencies globally were the tech giants, with their ability to unleash their Big Data capacities and lay claim to become the drivers of the engines of advertising. Today, these tech giants are being held to account by governments and civil society, the courts of law and of public opinion about why, where and how they are deploying this data. What will happen next, who knows, but clearly predictive prescriptions are of limited use.

In the meantime, we all have to wake up tomorrow morning and earn the proverbial (albeit fast depreciating) rupee. Agencies have briefs to turn into strategies and executions, clients to delight or pacify, offices to run and people to motivate. And at the core of the agency business, the people are still the beating heart – AI and robots notwithstanding. And as ad agencies struggle to survive and find relevance amidst this swirl of uncertainty, they can do no better than to turn to these young, energetic, talented and forward-looking people, embrace, nurture and make them their future. But to do this, they will have to learn to listen and adapt to their ways. Give them the freedom to experiment and fail, to work where and how they want and, in the process, teach them excellence in everything they do. No, we don’t know what the advertising agency of the future will look like but part of the answer will emerge from those young people who still believe in the magic of advertising.