4As President Challenges Marketers To Put Up Or Shut Up

Clients who complain about a lack of talent and creativity in Adland have nobody to blame but themselves because too frequently they are not willing to pay for it.

That was the gist of a commentary that 4As President Nancy Hill wrote in The Wall Street Journal’s CMO Today column Tuesday.

She referenced a comment by Unilever’s Keith Weed at Cannes this year that he has “genuine concern because there’s never been such competition for creativity.”

That was the starting point for Hill’s argument that Adland isn’t keeping pace with other industries in compensating top talent entering the workforce after college -- at least partly because clients aren’t willing to pay adequate fees.

She noted that average student loan debt is nearly $30,000 while entry-level ad jobs pay between $25,000 and $28,000 in yearly salary. Meanwhile, tech companies like Google and Microsoft offer starting salaries in the $80,000 to $90,000 range, while consulting firms offer $70,000-$75,000.

“If you were a recent grad with almost $30,000 in student loan debt, where would you go?” Hill asked.

“I don’t mean to point a finger at Unilever or any other client. All clients demand the best talent on their business, but, generally speaking, aren’t willing to pay for it. Extended payment terms, unreasonable indemnification clauses, incentive plans that don’t incentivize, FTE negotiations on hours in a year all add up to a system that is broken. We’ve made it so complicated that, at best, it takes three extra staff members just to manage a contract.”

Marketers often ignore guidance that the 4As and the Association of National Advertisers have offered on what constitutes fair agency compensation, Hill wrote.

“All the guidance in the world won’t help if we don’t find a way to work together to create an economic environment in which we can pay reasonably well to attract, retain and provide ongoing learning for the very best and brightest that our clients and their brands deserve.”

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3 comments about "4As President Challenges Marketers To Put Up Or Shut Up".
  1. Michael Farmer from Farmer & Company LLC , August 13, 2014 at 8:30 a.m.
    Nancy, Right you are, but the problem is even worse than you describe. Those underpaid agency people are doing twice as much work as they did 10 years ago, because agency workloads have increased while client retainers have declined. Documenting and negotiating fees on the basis of precisely-calculated workloads is not a part of current fee-setting practices. Realistically, fees are whatever the client is willing to pay, and agency workloads grow in an ad hoc basis. So underpaid resources stretched to the limit. No wonder agency personnel turnover is as high as 30% per year in some agencies!
  2. Ed Papazian from Media Dynamics Inc , August 13, 2014 at 10:44 a.m.
    Right on, Michael. At many marketers, the brand managers are junior people, often low paid, who move from one brand to the other every few years. Often, the agency account managers and media pros are more familiar with the brand's history and dynamics that the latest brand manager, who knows that a single big mistake will cost him/her any chance for advancement towards the coveted title of marketing director. As a result, the emphasis is much to much on playing it safe while the real brand manager is, in actuality, the boss----namely the marketing director----who has many other things to worry about, including moving up the corporate ladder and, by the way, supervising a number of brands in his/her division. Obviously, this kind of situation----which seems cost efficient to the corporate bean counters-----often leads to overly cautious media and marketing thinking, especially when new promotional vehicles appear which promise better results than the tried and true ones. Result: lots of lost opportunities.
  3. Gary Burandt from ICOM , August 13, 2014 at 1:42 p.m.
    Many young clients do not know how and even if advertising (all integrated activities) works. Purchasing now has as much influence on the hiring and administration of the agency as Marketing and may know even less. Advertising has become a commodity that is often bought from the lowest bidder without regard to talent or experience. Agencies then put the cheapest (youngest) staff on the account in order to try and make a profit. I believe the problem started when the agencies lost the media commission compensation system and eventually lost the media function altogether. It was also the beginning of the loss of the long-lasting agency/client partnerships that produced great work: DDB+VW, McCann+Coke, Y&R+Jello, D’Arcy+ Bud, etc. Without the media income agency revenue has gone down so head counts and starting salaries have gone down. Training programs have been eliminated and mentoring reduced. At the same time agency operating costs have gone up; particularly with the addition of digital marketing services; hardware, software, bandwidth and staffing. The agencies are not blameless. Most have not fought to keep their income and margins. They do bid low to get the business. Not an inviting environment for the best new grads to build a career.