Why it ought to be exciting times in the U.S. ad business

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Here's a contrary view: We are entering, or have already entered, one of the more exciting periods the ad business has known in years. After decades in which hardly anything changed, in the past five years everything has. Sadly, what has perhaps changed most is advertising's diminished standing in the hierarchy of neo-professions (a decline made more curious by the ever more ubiquitous nature of its end product).

Understandably, some of our readers disdain the onset of a more profit-driven, self-centered era. But, and it gives little pleasure to state this, that is an increasingly nostalgic and naive view today. You may not care for it, but you cannot deny it.

Individuals have long entered advertising to make money. Some argue the chances of doing so have diminished. (Ha! Tell that to Donny Deutsch.) At face value, compared to management consulting, investment banking or, briefly, the dot-com boom, coining it in advertising has come to look as easy as making money on the Nasdaq.

Now, with the Publicis Groupe-BCom3 Group deal formalized, and stories swirling about the future of Bates Worldwide, Bozell, D'Arcy Masius Benton & Bowles and Grey Worldwide, we may be faced with the last hurrah of mass managerial enrichment. In this respect, the U.S. industry may come to resemble more closely the rest of the world.

The only way advertising executives can make serious money in many markets is through risk-taking entrepreneurship. For them a salaried ad career doesn't pay enough. They have to build their own agencies, then wait till a hungry/desperate American network CEO enters waving his checkbook.

Those rules did not apply in the U.S., where one could have a lucrative career by being a lifelong bag carrier on a large account. Or you might work at a private agency that would sell or float, thus enriching its employees. Now most (but not all) have done so.

Another change: As clients find options limited by consolidation and conflict, they are forced to try alternative, often smaller, maverick shops. These shops may, like Bartle Bogle Hegarty or Berlin Cameron & Partners, be affiliated to big networks, but they're not big agencies per se. Their success has shown the way for new, independent shops.

This trend dovetails with the likelihood of some de-merger of the over-centralized major networks. Publicly owned, they are beholden to the tyranny of quarterly reporting. The weak economy precludes growth by winning new business; it also hinders organic growth from existing clients, who are cutting budgets. Growth by acquisition is more difficult. There are fewer agencies worth buying and conflict further narrows acquisition options.

Daily life in advertising at big agencies is increasingly frustrating for many. The signs therefore point to an atmosphere conducive to startups, and there may, belatedly, be a rash of them. If there is any real lesson from the upheaval of the last five years, it is that old business cycles eventually reassert themselves.

Go on. Start your own. You know you want to. As some independent agency once famously said: "Just do it!"

Stefano Hatfield is editorial director of Ad Age Global.com, Adcritic.com and Creativity.

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