Agency Talent Churn Puts A Strain On The Entire Ad Tech Ecosystem

agency talen drainAgencies are straining to recruit and retain data-driven talent.

Prospects with a strong background in statistical analysis and data mining – the second most popular skill on LinkedIn as of January – aren’t necessarily looking to work at a media agency. And it’s hard for agencies to retain employees due to a business culture that focuses on extracting the biggest margin possible.

Talent Hunt

A person with an analytics background wouldn’t traditionally look for a career at a media agency. Often, the biggest draw is the ability to apply data analysis to impact a client’s business, said Rolf Olsen, chief data officer at Mindshare.

The key, as Olsen discovered, is making sure prospects are aware of the agency world as early as possible. Three years ago, Mindshare started an internship program called Data Bytes, which Olsen leads. During its latest run, more than two thousand people applied for 27 spots in Data Bytes. Most Data Bytes interns are still in school, but Mindshare hired two as full-time employees and extended offers to three more after they graduate.

“We knew we needed to do things like this to attract the best possible talent across a broad range of skills, like science, economics, engineering, operational research and data visualization,” Olsen said.

Rapid Turnover

Acquiring talent is difficult, but retaining it is another challenge.

The turnover rate for junior agency employees is roughly 25%-30% per year, according to Mike Baker, CEO of DSP DataXu. Mindshare emphasizes career pathing by letting junior-level employees try out different skills across teams. That’s different from most agencies, where employees are assigned to specific roles and accounts.

“We focus on making sure people understand all the things people do within our organization,” Olsen said. “We allow people to hand-raise and say, ‘I’m interested to learn X, Y and Z.’”

Embracing the curiosities of young talent works for Mindshare – the agency has doubled its marketing sciences team since 2013 to 120 people.

Of course, in Mindshare’s case it’s letting young employees decide where they want to go. By contrast, retrofitting senior employees into new roles doesn’t always sit well.

Publicis Groupe, for example, suffered a talent exodus after it disaggregated its trading desk, VivaKi, and attempted to integrate its former employees into its media agencies.

Appropriate compensation is another key aspect of retention. Agencies tend to arbitrage junior-level talent. They want a lot of results without paying much. But that short-term financial gain creates big issues around retention.

“In labor-based business models, you have to keep the costs low at the junior levels to have the earning power at the senior levels,” Baker said. “Having expertise and skills should start to separate you, and the financials should reflect it.”

If salaries don’t increase as employees build out their skill sets, they’ll either move to another agency or leave the industry all together.

“They’ll get $20,000 more from the next guy and move around in circles,” said Rob Griffin, CIO of media agency Almighty.

Marketers looking to take programmatic in-house will also recruit this talent heavily.

Training Cog

When an agency loses skilled employees, it has a domino effect for clients and vendors.

Replacements need training and clients have to wait out that learning curve.

“Can [the new employee] deliver the same results as the expert? The answer is no,” Baker said. “The client is accustomed to a certain kind of performance and they wonder why it’s dropping.”

There’s also increased pressure on vendors to train employees at the rate of agency churn.

“Keeping people trained when there’s turnover is a massive problem,” Griffin said. “Even institutional knowledge of a client’s business can go away with that.”

Basic training on a DSP isn’t very difficult, especially for employees with experience. But there’s a difference between logging in and selecting a target audience versus running and pasting multiple segments, setting message frequency and sequencing, Griffin said.

“You can teach someone to ski reasonably quickly to get to a level of basic proficiency, but it can take years before you’re ready for a double black diamond,” he said.

Reaching basic proficiency on DataXu, for example, can be done in one day. But “someone who is really good at using the tool will drive better marketing results every time,” Baker said.

Turnover doesn’t put as much pressure on trading desks, where the entire team knows how to operate programmatic tools, said Bryan Simkins, partner at programmatic consulting firm Transparent Media Partners. It’s easier to shift talent around.

“Trading desks have the scale to be able to staff sufficiently,” he said.

But trading desks are being scrutinized by the ANA, and clients are looking to their digital and media agencies to run more transparent programmatic campaigns. With the current rate of turnover at agencies, it’s difficult to support that with sufficient talent.

 

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