You might say, "Well, sure, because agencies don't recruit M.B.A.s anymore." How can they? What is the "hook"? This once-glamorous, high-profile, high-energy, fast-paced cauldron of creativity that Jerry Della Femina called "the most fun you can have with your clothes on" is nowhere on the radar screens of the most desirable young people now entering the work force. Of course, inextricably linked to all those great attributes that generated the "Jerry-ism" were competitive salaries. It's amazing how much more exciting and glamorous a business can be when one can afford to live above subsistence levels.
If you think we're exaggerating, consider that the average starting agency salary (about $32,000) is about 25% less than the insurance industry, 21% less than that for our largest nonprofit, the federal government, and 20% less than the starting salary of a librarian, according to a recent report in The Wall Street Journal. And the salary difference between agencies and clients for an equivalent title ("marketing coordinator") is even greater: 35%. You can see how the "glamour" of working at an agency can pale in the face of hard cash.
Yet we've heard from a number of agencies that say they believe they should be able to compete with management-consulting firms for top talent-and seem bewildered why they can't. When asked what they think will attract these folks to advertising agencies given the average starting salary for management-consulting firms is $88,000, the answer is invariably some variation on the "advertising is a glamorous and exciting business" theme. To say that agencies just don't get it doesn't begin to cover this kind of blindness.
Little wonder that traditional agencies are losing business to the better integrated marketing shops who work "on the ground" in the retail outlets or service counters-the place where the product or service meets the consumer. These agencies have a different take on what constitutes creative selling. They aren't married to a pool of 30-second ads and a network buy as the panacea for all marketing communications ills, and, because their margins haven't been badly eroded, they can still afford to hire and train good young people who actually get into their clients' business. We see their growth as a growing trend.
Long term, this is a disaster in the making for an industry that is already ratcheting downward at an ever increasing rate. There are some who feel the situation is now irretrievable. A great agency is simply an amalgam of great people. When you don't get great people you are in trouble. When you don't get them for a generation, you have what may be a dying business.
Agencies are losing
So who are the agencies getting? Certainly not the best and brightest. Agencies now get the people who were turned down for more desirable-and attractively compensated-employment, or the well-to-do who can afford to take a flier because they're not relying on their paycheck to cover pesky annoyances like food and rent. In either case, agencies are losing. In the first case, they're losing their most important asset: talent. In the second, they're limiting the broad perspective and diversity that fuel a great agency.
But why should the best and the brightest of our young go into a business that:
* Has seen an almost 30% decline in jobs since the end of 2000
* Has starting salaries only slightly higher than those of quick-serve restaurants
* Has seen its margins erode under constant client pressure
* Pays an agency president about as much as a fourth-year investment-banking associate
* Has been among the most unstable of all businesses
* Has seen its relevance questioned in the boardrooms of the largest corporations
Advertising is a critical marketing element in a free economy, and advertising agencies should be both a great business and a great career opportunity. But they're not. Agency chiefs seem to be constantly waiting for the turnaround that's just over the horizon, but never seems to arrive. The American Association of Advertising Agencies is a sponsor of Advertising Week in New York, and drags up icons from a three-network, pre-cable era in a feeble attempt to show the importance of the business. There still may be work for Charlie the Tuna and Mr. Peanut, but not for the talent to create them.
Agencies are constantly bemoaning what they feel is their continuing-and increasing-lack of importance to their clients. While part of this is surely a function of not reacting to a changing business environment, it's probable that diminishing agency relevance is also directly proportional to decreasing talent resources. Clients are understandably reluctant to trust their valuable brands to merely modest talents. That may at least partially explain why so many clients are seeking the services of a large number of firms rather than putting all of their brand eggs in one-possibly suspect-agency basket.
What might help
It is pointless to try to relive the days when agencies were truly the "marketing partners" they continue to long to be. It's time for those in power at the agencies to take a hard look at the business they're in now and take the measures necessary to address the business as it is today-and hopefully anticipate tomorrow's business needs as well. Times have changed, so get over it!
Here are four steps that may help:
* Accept that there's a problem and stop trying to turn back the clock.
* Recognize that the world has become truly media-neutral and structure yourself accordingly.
* Ensure your structure can generate competitive salaries so you can attract and keep top talent.
* Recognize that, no matter what your structure and however much talent you have, how important you are to your clients will always hinge on how well you meet their requirements, rather than how well you live up to an image of your own creation.
Although we have no doubt that advertising is at least as fascinating a career as the FBI-or any of the 99 other jobs on Fortune's M.B.A. hit parade-it's obvious that an advertising career just doesn't present sufficiently attractive opportunities (real or perceived) to make it a top choice. Until it does, the best and the brightest will be looking elsewhere. After all, the truth-along with a high salary-is out there. It's just not in advertising.
Joe Dell'Aquila ... is a partner at Continental Consulting Group and has been senior VP-advertising at American General Financial Group.
Darryl Lindberg ... is a partner at Continental Consuting Group and had been president of Omnicom Group’s DDB-Latin America.