There’s been a mass shakeup at the top ranks of ad agencies in 2022, putting renewed strain on client relationships already in jeopardy from shrinking budgets and a rapidly evolving industry.
Some of the movement is the ripple effect of COVID-19 and the Great Resignation that followed, which left execs feeling burned out and at odds with their companies, which were suddenly under massive pressure to adapt to changing clients’ needs. Marketers themselves are trying to navigate shifting consumer habits, including the explosion of e-commerce and the rise of TikTok as a marketing vehicle.
Ad Age spoke to 11 industry professionals, including consultants managing agency-marketer relationships and top agency execs who left their roles this year, who described this disruption as the impetus for the high level of turnover. And the immediate result of these changes, which will likely start playing out in early 2023, will be a renewed uptick in account reviews, according to these professionals.
Executives were granted anonymity to speak openly about their companies and clients.
Citing leadership changes and a perceived lack of strategy, 38% of U.S. advertisers are likely to switch agencies within the next six months, according to a recent study from SetUp, a company that matches brands with marketing agencies.
Chief marketing officer turnover is also high, and CMO shuffles are a leading indicator of account shifts.
Leadership on the run
Within the last year, the industry has experienced whiplash from the high level of agency leadership changes. During a two-week period in October alone, Ad Age documented 18 top-level agency executive shifts.
A lot of the movement is happening at ad agencies once revered for big branding TV campaigns that are declining in demand, like Interpublic Group of Cos.’ McCann, independent shop Wieden+Kennedy, Accenture Song’s Droga5 and WPP’s Grey.
Wieden+Kennedy is under new leadership; Karl Lieberman and Neal Arthur took the reins after founders David Kennedy and Dan Wieden died within one year of each other in October 2021 and 2022, respectively. The agency also lost its high-profile Global Chief Creative Officer and President Colleen DeCourcy, who announced her retirement last December and joined Snap to be its creative chief not long after.
One current agency employee and one consultant working with Wieden+Kennedy said the agency has been focused on finding new ways of producing breakthrough creative content and investing in areas like social media through its Bodega studio, rather than focusing most of its energy on big branding spots.
IPG’s McCann Worldgroup has had a slew of leadership changes as the agency looks to evolve past its traditional TV roots. This has included installing Daryl Lee, previously the global CEO of IPG Mediabrands, as its new chief executive to lead the agency through the new digital era. WPP’s Grey has also seen some major departures as it integrates with AKQA after its merger two years ago. The agency lost New York CEO Amber Guild to McCann in November, while former New York Chief Creative Officer Justine Armour left in July.
Droga5 has seen a string of new hires and departures that started notably with the exit of former Global Chief Strategy Officer Jonny Bauer, who left for Blackstone in April 2021, as Droga5 continues to merge itself under new parent Accenture Song. Most recently, Sarah Thompson, global lead for Accenture Song's communications unit and the former Droga5 global CEO, left the company after 15 years.
Also read: Allstate moves account to Wieden+Kennedy from Droga5
Evolve or rebuild
These are just a handful of the dozens of agencies under immense pressure to adapt to shifting client needs and growing appetite for data-driven performance, e-commerce, TikTok videos and Web3, all while they deal with their own internal workplace disruption brought on by the pandemic.
Marketers increasingly want their ad agencies to do everything from creating traditional TV spots to plotting metaverse strategies. As they’re set up now, the first consultant said, many of the legacy creative agencies are not equipped to do all of that and they’re in the midst of an identity crisis, so they’re trying to find the right leadership to carry their brands into this new era of advertising.
One holding company executive said every top executive is faced with a decision right now: Do I trust the leadership I have in place to evolve the agency to where it needs to go or do I completely rebuild with a new team?