Many of you will spend at least part of your career in one or more advertising, media, PR or marketing communication agencies. Most advertising and promotion originates in agencies. Since 1944, Advertising Age has tracked the world’s agencies—their consoli- dations and breakups, their total expenditures on media, and their client lists. In the late 1800s when the first advertising agencies appeared, they were small and most started with a single individual. During the 1900s agencies came to employ hundreds and provide a full spectrum of services—creating advertising, managing brand accounts, researching con- sumers, and buying media placements for the advertising. By 2000 there had been huge mergers of individual advertising agencies, with Dentsu, a Japanese-based company, the largest. “Agency Report” notes that Dentsu is now the fifth largest company, with WPP, Omnicom, Publicis, and Interpublic heading the list (A3; http://adage.com/agencynews/ article?article_id=143467). Although advertising agencies started in the United States, three of the top five companies are now headquartered abroad. In the United States, the top five agencies are McCann Erickson, BBDO, JWT, Y&R, and Leo Burnett, although each of these agencies belongs to one of the five top worldwide agencies.
The year 2009 was a bad one for agencies, with U.S. revenue falling 7.5 percent. That may not sound like a lot, but in terms of revenues and the financial health of the agencies, it’s huge. All of the four kinds of agencies lost revenues: traditional agencies, media agen- cies, direct customer agencies, and public relations agencies. The only area of advertising that rose was digital, and the change was very small: a half percent.
As a student of advertising and marketing communication, you probably ask yourself, what makes working at an agency fun and fulfilling? Lots of people have tried to figure out just what makes agencies successful. Most agree that ad agencies have “personalities” and that you can see them reflected in the advertising that they do. Another way to look at life at ad agencies is in terms of their “culture.” Agency culture is crucial for attracting talented professionals who can produce great ads (A4; http://adage.com/article?article_ id=143477). Many argue the importance of treating ad professionals well. Check out the list of things that some agencies are doing to make sure their culture is a winning one.
In Adland, the Best Culture Lures the Best Talent
As Hiring Freezes Thaw, Expect Fun, Contemporary Agencies to Have an Easy Time Attracting and Retaining Quality Staffers
As a student of advertising and marketing communication, you’ve probably thought about what it’s like to work in communication at an agency, a corporate office, or perhaps for a charitable organization. This article can give you some ideas about what to expect. One of the most important things for you to consider is the culture of the organization you may join. You’ll not only want good working conditions, good pay, solid and ethical management, and other characteristics—you’ll want a good fit with your personality and work style.
The article points out that the most successful agencies have a “defined” culture that stays true to the vision of the founders of the agency. Some corporate cultures may be buttoned up, structured and formal and that is often a very successful approach and may be where you’re happiest. Other corporate cultures are successful with a more organic, informal and unstructured style. There’s no “right” corporate culture, but there’s likely a “right” culture for you.
Here’s a summary of some tactics agencies use to foster the kinds of cultures they think help them thrive.
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1. An e-newsletter that offers fun and irreverent commentary about the agency and the business.
2. A “field trip” to exotic locations like Tokyo that inspire staffers and foster team spirit. 3. “Loyalty rewards” that offer employees with 20+ years of service $10,000 to use on a vacation anywhere in the world. Fellow employees throw a bon voyage party to send the traveler on the way.
4. Good deeds. Some agencies get involved in grass roots charitable efforts to help their communities such as getting out the vote or adopting schools.
5. Job enrichment. Some agencies offer special classes and workshops on topics like technology and innovation to help employee ramp up their skills and prepare for pro- motions and new challenges.
6. Personal enrichment. Other organizations offer tuition for classes that aren’t even linked to advertising or marketing. Rather, employees learn diverse skills like acting or driving. 7. Change of venue. One of the world’s biggest agencies, Digitas, offers its 3000 world-
wide employees the opportunity to work in one of its 33 international offices. As part of the deal, the employee records her or his experiences to share with others through a video time capsule.
8. No secrets. Some agencies conduct annual meetings that bring all employees up to date on the organization’s performance, its outlook for the coming year, and the role of each employee in its success.
9. Talent showcase. New York’s Deutsch puts on a talent show for employees to compete for prizes and glory. This kind of thing is typical of the creative competition that ad- vertising professionals enjoy.
10. Creative inspiration. One New York agency brings talent of all kinds into the office during working hours, including forensics experts and Juilliard music professors. Regardless of the strategy, you can see that different organizations have different styles and cultures and you’ll want to land in one that’s right for you.
Advertisers
Advertising Age has been tracking the advertising spending of U.S. advertisers since 1956.
As noted above, 2009 showed the highest drop in that spending in the last fifty-three years. Of the top ten advertisers (Procter & Gamble, Verizon, AT&T, General Motors, Pfizer, Johnson & Johnson, Walt Disney, Time Warner, L’Oreal, and Kraft), all but Pfizer and Kraft reduced their advertising spending. But the eleventh top advertiser, Walmart, increased its spending by 14 percent—clearly trying to grab market shares during the downturn— and it had a 1.1 percent increase in sales, even though retail sales nationally fell 2.1 per- cent. So spending more in a downturn paid off for Walmart. It also paid off for Pfizer. In fact, of the twenty-six top advertisers who increased or maintained their spending in 2009, 70 percent increased sales. So it looks as though spending during a downturn IS a good idea (A5; http://adage.com/article?article_id=144555).
Arguably the most precious resource corporations have is their brands. Traditionally, the key individual for a brand in corporations is the brand manager. The challenge for brand man- agers is in the digital world, where changes occur with lightning speed and where consum- ers often take over the conversation about brands, even to the point of producing their own brand ads. Recently, Forrester Research, a major analyst of America’s consumers, suggested that brand managers become “brand advocates.” Along with the name change, brand advocates will no longer stick with yearly budgeting of messages and media for the brand. Instead they will
14 CHAPTER 2 • Business Structures in the Advertising Industry
be ready to advertise on the fly in response to changes in consumer buying and social media behavior. Forrester even recommended that much faster switching of agencies needed to be acceptable to the brand advocate. What do giant advertisers such as P&G and Unilever think about this new approach? Is this the harbinger of a real organizational change at America’s large advertisers (A6; http://adage.com/cmostrategy/article?article_id=139593)?