5 Factors Pressing the Advertising Industry


“What are you seeing out there?”

This is the one question I am asked most often about the creative agency business.

This is what I’m seeing out there — the state of the advertising industry, via my somewhat myopic viewpoint

1. These Are the Good, Old Days — Invariably, the first question (“So, Mike, what are you seeing out there?”) is followed by a second question, “Will we ever get back to the good, old days?” No. I don’t even remember what the good old days were. I think they were a myth, or a mirage. They were never “here” to begin with. For the 21 years I’ve been in this business, our industry has been in constant transformation. The “good old days” of what? When “Integration” was a new horizon? Or Account Planning (then Connection Planning)? Things will never be the same again because they never were the same. Or do you mean the good, old days of when clients valued creative? It was never easy to sell in great work. Why? It was never easy to find it in the first place. This is as good and as old as it’s gonna get — now. Don’t dig in, because that fastball is coming right at your head.

2. Digital: Liar’s Poker for Dummies — Everyone wants what they don’t have. The “traditional” agencies are scrambling to add digital. Why? Because it’s the “new frontier”? Uh uh. Because that’s where clients are focusing their energies and budgets now. If it were the real “new frontier”, why are digital agencies scrambling to add traditional? Digital “is like the Ponderosa on Bonanza, it’s faked”.  I couldn’t resist that line from the movie, Diner. It’s really not faked, but it’s not really the “new frontier” either. It is what it is — another medium, another technology. Yes, embrace it, love it, sleep with it — but don’t marry it. Every award show I’ve judged to date is heavy on traditional and lean on digital. Of course, that will change quickly — but not drastically.

3. Rate of Change — Things are changing exponentially faster than ever. Not advertising things, or media things, or technology things — ALL THINGS. Like global climates, civilization and business are advancing at mercurially unprecedented rates. Today, four of the top ten in-demand jobs did not even exist 5 years ago. The amount of technical information is doubling every two years. More unique general information will be generated this year than in all of history combined. These are some things I’m hearing and reading. Does this scare you? Or inspire you? This is not, in the words of David Lubars, “some futuristic bullshit”, but the new reality. Perhaps the most valuable book for the our industry today is Darwin’s, “Origin of the Species”.

4. New Business is NOT the Answer — Geez, I’ve never seen more emphasis placed on agency business development. The Rainmakers are being named the CEO’s. Just look at what Omnicom’s PHD did last week with their CEO function. Out with a guy who is a true Digital pioneer (that list would be shorter than switch-hitting MVP’s) and in with a … new business guy. And one with a spotty track record at that. Did it ever occur to anyone that it’s easier to keep business than get it? But everyone seems to be so focused on getting new business that they’re losing more existing business than ever.  Business development is crucial, but an over-emphasis upon it is counter-productive and reinforces the perception that we’re content to churn and burn new clients. (That picture to the left is of Vida Blue, the last switch-hitting MVP.)

5. The Myth of Entrepreneurialism — Everyone talks about being an entrepreneur and hiring them — both agency principals looking for employees and clients searching for agencies. Yet, when given the option — clients revert to the same dated multipliers for agency compensation. They talk about agencies sharing their risk, but when the rubber meets the road, there’s very little precedent for incentive-based agency compensation. There are several reasons for this (too difficult to quantify, too many uncontrollable factors and variables, impossible to coordinate with Accounting Department, etc.). But at the end of the day, it just means that entrepreneurialism is more of  a noble concept than a reality. On the employee side, more folks than ever cling to dead-end, boring jobs for fear they will lose their precious 2,000 square feet in the suburbs. A high percentage of the workforce that I interact with says they can’t remember the last time they had fun at their job. When I suggest they quit and try something new, they cower in fear. Ten years ago, creative people trusted their talents and skills and embraced a freelance marketplace. Today, we take them out of their agencies in body bags.

5 thoughts on “5 Factors Pressing the Advertising Industry

  1. Ellen Curtis

    Hey Mike, 8 years ago I realized you can’t turn the titanic (Big agencies. Big Clients.) left my job, moved to a place that no one ever heard of and started a hybrid agency (that’s the term I see used for agencies that combine multiple communication disciplines online and offline). I am happy to report the agency is alive and kicking.

    Having look around on Google, I know my story isn’t unique. There’s lots of small agencies embracing the new reality. My guess is these small agencies will grow to be the new Big agencies until they are replaced with latest transformation of our business, completing the circle of agency life.

    1. mikepalma Post author

      Hey Ellen. Thanks for your note. Congratulations on the alive and kicking part. Long live the small hybrids (until they get too big and die). Miss you.

  2. Pingback: What is the state of the advertising industry? | S.O. Creative Blog

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