This first appeared in the AdNews 2021 annual edition. Subscribe here for your copy.
The Australian economy has emerged from the COVID-19 pandemic in overdrive
Consumers ran from their lockdown cages with shopping bags in hand. Brands are spending on advertising to lure these spenders who are intent on revenge shopping to make up for lost retail therapy time.
Ad spend edged higher than 2019’s pre-pandemic and there’s more ahead as dormant categories, including travel, return.
Then there's a lot of work for agencies, everyone talks about the talent squeeze, sparked by layoffs in 2020, and a stop in the flow of talent from overseas.
The COVID-19 pandemic also created significant human change. The Great Resignation is here as everyone reassesses their place in the world: Do I really want to work there/five days a week/at all?
This all means growing revenue, the prospect of better pay for those at the coalface and high demand for media platforms, especially television and digital.
The strength of the rebound surprised many. Steve Allen, director of strategy and research at Pearman Media: “2021 was much stronger, and far faster in recovery than any predictions — especially ours.”
But how long will it last? The economic miracle is fuelled by the huge sums pumped into economies by central banks. One day taxes must rise to help pay/service that debt.
“What to make of 2022, when a number of key consumer categories have been both disrupted and heavily restricted, and yet to recover to 2019 spends, notably travel and tourism, and automotive?” says Allen. “We forecast a continuing growth in media markets’ advertising revenue in 2022 … of +7.25%. Digital is the real driving engine, and given it is near 65% share of the media markets, it distorts the overall picture … However, there is lots of conjecture and some research, statistics and evidence that there is pent-up consumer demand awaiting unleashing.”
By the September quarter of 2021, the major global advertising companies had passed — or were soon to pass — pre-pandemic revenue levels. But there are more changes ahead.
Greg Paull, co-founder and principal, R3, says the lift in ad spend and holding company revenue needs to be viewed through the lens of a different world with clients who need partners who can work within a new model.
“Dance cards are going to be changing for a while,” he tells AdNews.
“In Australia, clients will increase ad spend as part of their recovery strategy. Digital and social will be strong. So will the demand for services related to ecommerce, data and analytics. The talent crunch will affect wages, which is going to increase operational costs for both clients in-house and agencies.
“What marketers need to look at for 2022 are the alignment of their agency model with new strategies, ensuring the cost-efficiency of in-housing, and the ROI on digital media spend as the cost of customer acquisition increases.”
Market analysts, seeing strong growth in the Standard Media Index (SMI) agency data, are more upbeat about the 2022 financial year.
Investment bank UBS upgraded its metro free-to-air (FTA) ad market forecast from 4% to +6.5%. “The combined TV ad market ... Metro linear FTA plus Broadcast Video on Demand or BVOD … could be at an inflection point,” the UBS analysts said in a note to clients. “While traditional linear broadcast TV is likely to face ongoing structural pressures, growth in BVOD can be an offset on a three-to-five-year view.”
UBS also forecast BVOD growth of +40% for the 12 months to the end of June 2022. This implies +9.5% growth for combined metro FTA and BVOD.
Mark Frain, CEO at Foxtel Media, says the strong run will last as long as brands see opportunities to grow.
“The accelerated shift to ecommerce and the changes in consumer behaviour, driven by the pandemic, will continue to create these opportunities in the short-term,” he says.
“I can see the run of momentum continuing all the way through 2022 as dormant categories, such as travel and tourism, come back big, only further fuelling a red-hot ad market.
“Media is arguably in one of its strongest positions in years, off the back of growing audiences and structural consolidation within the industry. My prediction is that intelligent video will bring new opportunities for the more traditional TV players to bridge the digital divide.
“Foxtel Media’s revenue was up 4% year-on-year, but we saw a 75% increase in digital revenue. Smart media companies will be reinvesting this increase in the continued transition to the future.
“There will be big changes as we emerge from the past two years. Every business has had to reevaluate where it’s heading,
to build new strategies around how we work and how we interact with our customers through significant advancements in ecommerce, both as advertisers and media businesses.
“I think in 2022 we’ll see some positive changes borne out of the challenges of COVID-19, but as a media business, brutal simplicity and ease of trade with our customers will continue to win the day.”
For consultants, 2021 was worse than the first year of the pandemic. Pitch doctor Greg Graham: “Who would have thought in 2020 that 2021 would turn out to be even more challenging? I certainly didn’t.
“This year has been a bit of a nightmare for a sole trader whose consulting business was going gangbusters and then came to a screeching halt. From turning down work to being on JobKeeper, it was a big adjustment and a personal challenge for me.
“Plus, as an extrovert and lover of banter, I missed the buzz, passion and energy of the office. It was weird WFH solo. My major learning was the importance of resilience. I’m a glass-half-full person, but I gained renewed appreciation for the importance of keeping a positive attitude and finding joy in a walk in the park.
“Next year, I’m relishing the opportunity to bounce back into live consulting on new business, imagine training and development live. To actually be in the room with the participants rather than blinking at rows of faces on Zoom — and to actually experience the energy, passion and commitment in person … awesome! We are a people business and to not have that personal engagement and interaction is just a strange way to do business.
“As far as the health of the market goes, ad spend experienced a major rebound in the second half of this year and the ad market is incredibly robust at the moment. This will continue into at least Q1 2022, although forecasters are advising the growth may be moderate mid-year with some normalisation of demand. According to GroupM, we should expect 6% local growth at the halfway mark of 2022, and Zenith is forecasting global ad spend to grow 6.9%.
“My call is that ecommerce will finally come into its own, while gambling spend continues its crazy upward trend — we are a nation of punters, after all — and QSR spend is faster than ever.”
Mark Coad, CEO, Mediabrands Australia, looks to the surge in consumer spend around the world post-lockdown, and the ad spend that follows.
“There’s been a number of sectors that have had no reason to spend, such as travel, or been constrained by external supply factors, such as auto,” he says. “These sectors will work their way out of their problems in 2022 and that should see an uptick of spend in these categories.
“Globally, the pattern would seem to be one of strong growth in digital channels, which makes sense in light of the transformation we have seen in the ways we consume digital media during the past 12 months.
“In particular, we would expect strong growth in addressable comms as our clients start to take advantage of the opportunity to step past demographics and target their high-value audiences.
“OOH is another area that will be interesting next year. Certain sectors of OOH have been either shut down or severely hampered by lockdowns and travel bans. We would expect these to bounce back as borders open in 2022, and as people’s new modes of living in a COVID-normal world are likely to see a great deal of mobility restored.”
Coad says the pandemic hasn’t fundamentally changed the impact of advertising on consumers.
“It might have changed the potential of various mediums or ecosystems, but the need to drive consumers to brands is as fundamental now as it was two years ago,” he says.
“We expect H1 2022 to be very strong as brands look to bring consumers back into the fold, and consumer spending surges on the back of coming out of lockdowns and travel restarting.
“H2 2022 might come back a bit on the first half but we still expect to see growth on 2021 in the region of 4% to 6%.”
Jeremy Bolt, CEO of Hearts & Science: “In the past two years, I learned the true value of toilet paper, the difference between Peter Alexander pyjamas and a formal shirt on a Zoom call, and that I can now roll my eyes so far back, I can see my brain.
“I also learned that whatever we thought was going to happen can change on a dime and, while I hate armchair opinions, I think that is as good as it might get for 2022.
“GDP growth per the RBA is 4.5%, as with the unemployment rate. The last time we were at those levels was 2012 and 2008, respectively. Research indicates media spend follows GDP, give or take a couple of industry sectors and media types. But while said research was conducted across 21 countries over 14 years, it never included a pandemic or ‘rebound’ growth as a result of lockdowns.
“Consumer savings, summer and a sense that we can now see light at the end of the proverbial lockdown tunnel are all positives. Travel (keep in mind we have had $38bn not spent overseas due to travel restrictions), international students, entertainment, interstate travel, and an immigration catch-up are all good. Further lockdowns, supply chain issues, chip shortages (which some analysts say might continue in 2023), the virus still running its course resulting in potential further lockdowns, potential inflation, and any resulting impacts on consumer confidence, not so good. This is ignoring any impacts in the broader region as the Evergrande story unfolds and global bounce-backs in the economies of the US and UK sucking up limited product availability.
“So while there is a bright light at the end of the tunnel, the tunnel might be longer than we think. As I always say, nothing surprises me anymore. We haven’t seen the end of COVID-19 yet. My only hope is we can avoid further significant lockdowns in 2022.”
Kurt Burnette, Seven’s chief revenue officer: “Quite clearly people are very keen to spend. There's a lot of excess spend that they're looking to invest into things not only going into Christmas but into next year as well.
“Our forward bookings are really strong, with big commitments into things such as the Winter Olympics, which is in February 2022. We've launched our kickstart proposition, which encompasses the Ashes and the Big Bash in January, and we go into February into the Winter Olympics, The Voice: Generations, Dancing With the Stars, SAS Australia, Sunrise news and Home and Away.
“We have a huge content launch we're proposing into next year where brands and certain categories can own those big content moments.
“Our expectation and what we're seeing is a very strong finish to the year and an even stronger start to 2022.”
Michael Stephenson, chief sales officer, Nine Entertainment: “The pace has been hectic, and I don’t think it’s slowing down, but weirdly, everything feels far more balanced. I think 2022 is going to create
unbelievable opportunities for those who are ready to take them.
“History proves that every global pandemic is followed by a surge of economic prosperity fuelled by low inflation, wage growth and low interest rates. Welcome to the ‘Roaring 2020s’, a period of economic, social and cultural change.
“Our industry will play a critical role in shaping and driving this
economic, social and cultural change.
“2021 has demonstrated that we are all accelerating towards our digital future. In particular for the proven media, it was the year where Total TV, Total Audio and Total News became the way that brands connect with consumers from the top to the bottom of the marketing funnel, awareness, consideration and conversion. The ability to connect with customers in premium environments in a more targeted way using first-party data and bought using world-class technology.”
Rod Prosser, chief of sales, ViacomCBS Australia and New Zealand: “Television really does drive the best results. In 2021, there has been unprecedented demand for premium, brand-safe advertising, which has seen us open our bookings early for 2022.
“As well as broadcast being in high demand, ecommerce has exploded, bringing a raft of new clients and opportunities. We’ll continue to meet the needs of new and existing clients with evolving digital ad products such as dynamic e-trade placements and Happy Hour.
“I don’t think you’ll talk to anyone in the industry who’s not buoyed by the release of VOZ, and I think that extends to the agency folks. As our online audiences and advertising opportunities grow, VOZ is playing
a critical role in our future success. VOZ gives us the full audience picture and simplifies buying that full package with one currency across the linear and BVOD platforms.
“10 ViacomCBS has taken a strong stance on our commitment to diversity, equity and inclusion to move towards greater representation and storytelling on all our platforms, in our business and in the community. We’re continuously building on our DE&I commitments which our partners, audiences and employees appreciate, but we still have a way to go. For example, it was an eye opener for me that only one in five football grounds have a women’s change room and we’re committed to rectifying that.
“This year I’ve also seen an unprecedented number of briefs with a mandate that their partners have a commitment to ESG (environmental, social and governance), which encapsulates where business priorities are moving towards.
“In 2022, market and consumer spending will explode. People have a lot of untouched money in their pockets and are ready to spend, and there will still be a heavy reliance on television advertising.”
Stuart O'Brien, CEO and founder of independent Houston Group: “From January, it's been drinking from a firehose. I would spend more time saying ‘no thanks’ than saying ‘yes’.
“The scale of projects has returned. The world is changing quickly and people don’t want to be left behind. The costs of staff are through the roof, retaining top talent. With borders closed and budgets, projects have returned to pre-COVID-19 conditions — done at pace!
“I've seen a lot more activity and at the same time a lot more anxiety. I think Delta has really thrown us again. The firehose is still on but you're not moving through the gates as fast as I think people wanted.
“There's a lot of cash in the market. Money is still cheap. I think we did a good job in Australia. We printed off a tonne of money and I think that's true of all the markets.
“Liquidity is there and people are understanding disruption is coming. I think boards and senior executives have responsibilities to get ready for whatever this new thing is. If you're sitting still, you're dead.
“A lot of my big clients are transforming with structural change because they've been disrupted. They know they've got to change. They've got something good so they're not broken.
“I think that's the challenge of the modern economy; these organisations aren't bad organisations — they're great, but they've got new noise. They're trying to do what they do every day and be someone new, and that complexity of being someone new and old and how they navigate through that is really important.”
Mat Nunn, founder of Nunn Media, is predicting more growth in 2022: “We also had some great growth this year in tough times. I think that's probably the sign of a business that's tracking really well.
“I think for us it gets back to people. We are all about the people. We invest in them. We value our relationships with the media. We don't burn them. We make long-term decisions, not short-term decisions.
“We stuck behind our staff, we didn't make any redundancies, and we supported everybody. We had some clients who were affected and some clients who actually thrived — a little bit of a mixed bag.
“We had multiple new business wins across that period, including the likes of some really good clients that we absolutely love partnering with such as Bendigo Bank and Haval, the big Chinese car company.
“But at the same, from an agency point of view, it's pretty difficult to operate where you're used to being next to everybody.
“Something we are really strong on is culture and family and it just makes it really hard when these people are not in your space every day.
“That's been challenging for all agencies and service-based industries.”
Jack Watts, global CEO of independent Bastion: “Looking back, March of 2020 was one of the defining moments in the 12-year history of Bastion. We set a plan quickly and we have stuck to it ever since. That plan was to make difficult decisions early, and then accelerate out hard as the multinational agencies were still waiting for someone in London or Paris to tell them what to do. And that is exactly how it has played out.
“Since June of 2020, our business has been experiencing unparalleled growth as we continue to grow existing, and win new major accounts by providing clients access to wide thinking across the breadth of
communications services, combined with deep expertise.
“After more than a decade of being under-serviced by multinational agencies, it's clear clients now want independence, but they want it at scale. With the acquisition of Bastion Shine in New Zealand, that’s what we provide: 300+ staff across Australia, NZ and the US who work collaboratively across a diversity of thinking solely for the benefit of the client.
“This makes Bastion the largest independent ever in Australasia and one of the biggest independents in the world. We are one step closer to building the New World Agency, the disruptive force in the agency landscape, globally.”
Yaron Farizon, CEO MediaCom: “I personally have experienced two countries come out of lockdowns, both Russia and Israel, and the recovery is faster than everyone thinks. I can feel the social anxiety and worry that we won’t return to normal, but two weeks post-lockdowns and things felt normal quickly. Cinemas were back, traffic jams and foot traffic in the cities were back. Brands were back. Advertising dollars were back. Things are bouncing back faster than we expect.
“Don’t think and don’t plan for a sleepy 2022, I know from experience it’s going to be big.
“Our clients have justifiably high expectations for 2022 for it to be a great and memorable year. So many new and exciting opportunities for brands, publishers and agencies.
“2022 brings with it the stability and renewed passion for life everyone has been waiting for. Audiences will be out and about and excited; there is going to be a new energy in the air. We have seen it across the world — emerging post-pandemic, people want to celebrate freedom, while some of their habits and behaviours have been modified and adjusted.
“I believe agencies have a unique opportunity to think about how they take advantage of this energy, how they replan the advertisers’ ecosystems to leverage these changes. You only have to think about Cinema or OOH, channels that have been affected more than most through these lockdowns — they are now set with a unique momentum.
Kim Portrate, CEO, ThinkTV: “The industry has done a remarkable job through a pretty difficult time.
“Advertisers, in particular, learned how to navigate challenging circumstances, some so quickly they have grown their businesses exponentially. Many did so by holding the course and investing in their brands.
“We’ve come so far from the early days of making tough decisions with little information and as we farewell 2021, the market is buoyant and expected to stay that way.
“There’s no doubt COVID-19 will leave a lasting imprint on the industry including the growth in cultural commerce. One of the big ‘aha’ moments for me was the way the pandemic drove shopping local because it better expresses the desire to connect, support and grow local communities and the businesses that operate in them.
“This cultural commerce inflection point applies to media and marketing as much as it does to supporting local retailers. Increasingly brands are discovering the importance of adding value to our communities and our economy.
“At the heart of this are Australia’s media owners. Part of the fabric of the country, our homegrown media businesses give local brands the chance to be a part of the stories they tell — our stories.
“It’s been quite a year and I have no doubt 2022 will bring its own set of learnings. But after the past two years, as an industry, I reckon we can handle just about anything.”
At some time in the future — when, we don’t know and can’t predict — the rapid growth will ease, or at least decelerate.
US-based Brian Wieser, the global president of Business Intelligence at GroupM, and sometimes called the de facto economist of the industry: “2020 was a very soft year and 2021 will have ended up as one of the strongest years ever for global advertising.
“It’s a kind of a cop out or it's just easy to say, ‘Well, of course you're not going to exceed that, therefore, deceleration’.”
In the meantime, the agencies are rebounding as expected.
“What I might say could easily change in days from now,” Wieser tells AdNews.
“However, what’s been happening in 2021 is that new incremental sources of growth have been driving advertising, certainly in the largest markets, at levels that are well above what we would've had otherwise, pandemic or none.
“It's these digital endemics, as I call them, the companies whose businesses are entirely rooted on digital environments — app developers or otherwise — or they're digital services that are primarily or entirely based online.
“And there are scores of companies that have only recently filed to go public or become public companies, but maybe less than 10 years old. They're spending hundreds of millions of dollars, if not billions of dollars a year in advertising. Some haven't even gone public. We barely know they exist but they're spending massive volumes and they're enabled by cheap capital.
“They're chasing cheaper capital by focusing primarily on revenue growth, independent of the cost to generate that revenue because they'll be rewarded for revenue growth and no-one's paying attention to any number below that.
“A lot of this is really advertising driven. Is it sustainable? No, but it's impossible to say at what point it stops becoming sustainable.”
Dennis Wong, managing partner, consulting, Kantar Australia: “The lockdown has produced clear winners and losers in terms of categories with money to spend.
“It has artificially bumped consumption of fast moving goods, punished hospitality, tourism and air travel, elevated ecom and digital platforms.
“Aside from normal business as usual, we expect to see continued investment from tech businesses looking to get more sophisticated around the consumer; FMCG companies figuring out how to maintain their market positions post COVID-19 bump. We also expect to see investment from depressed industries figuring out how to reestablish vibrant businesses in the new world order
“A lot of this discretionary work will largely be directed into helping businesses understand how the market landscape will evolve in a post-lockdown era, how demand and supply will shift with a strong future bent on it.
He says the run higher won’t last forever. “The money being spent now on insight is being driven by a genuine need to understand, navigate and win in a post-pandemic/post-lockdown society where markets and categories have really augmented themselves. It’s available because businesses that experienced a performance bump because of COVID-19 have a one-shot opportunity to reinvest the money … their challenge will be lapping themselves next year.”
What did we learn?
Peter Horgan, CEO of Omnicom Media Group and MFA chair: “After more than 18 months of working from home, we have begun the return to the office and I know I’m not the only one to be excited at the prospect of being under the same roof as my colleagues. Flexible working will rightly be a mainstay of the modern workplace, but the effectiveness of the office in the spheres of training, ideation and collaboration cannot be denied.
“So that’s one thing I’m looking forward to in 2022. The other is travelling for work and for pleasure. I’m excited to be visiting our teams across the country and New Zealand — particularly New Zealand as I feel I have been away from there for such a long time. Here’s hoping the sentiment is reciprocated!
“I’m not expecting 2022 to be an entirely smooth ride — the talent shortage in our industry remains a real and pressing issue. But there is ample positivity and determination industry-wide to tackle every challenge thrown at us, and I’m confident we’ll face each surprise and bump with the resolve and creativity that seems to define media agencies.”
Kim Portrate at ThinkTV: “COVID-19 has made us more than before: it has made us all more human.
“We’ve learned how to respond to people who need a hand, even if they didn’t ask, or even realise they needed it. It’s brought new layers to what it means to be part of a team, and to what it takes to lead a team.
“As a leader, I've learned to be more aware of what isn’t said, shared or felt. And I’ve learned that without empathy, it’s impossible to be the authentic, truthful, kind
person others want to work with.
“Perhaps most importantly, I learned the need to understand the different drumbeats people march to and how to get them, and all the other members of the percussion section, to come together in harmony.”
Dennis Wong at Kantar Australia:
“I learnt that we are all more adaptable than we think
“I learnt that almost all virtual workshops suck
“I learnt that there’s lots of dimensions to productivity
“I learnt that we need to manage our energy, not our time
“I learnt that there’s no substitute to genuine, face-to-face human interaction.”
Mark Coad at IPG Mediabrands: “Personally, it is the levels of resilience we have, especially when we need it. We came into this year thinking 2020 was the COVID-19 year so there was fresh optimism for a good period of time. We travelled interstate, we went on holidays, we went to Queensland, we were in the office … then we weren’t again. In many ways that was harder, as we knew how tough 2020 had been. But we found a way. When it needs to be done, we always find a way.
“Professionally, if we didn’t already know this is a people-based business, we sure do now. People’s wellbeing, their workloads, their uncertainty, their need for connectivity take the highest consideration for people managers at all levels. This last period has been as tough as it gets. The businesses that will do best coming out of this will be the ones that have adapted in that space and worked with their people. The good will get back to the office soon and thrive in that reconnection. The not-so-good ones will get back and wonder where everyone is.
“And nationally, we unfortunately discovered that Australia is not quite one nation — it is a federation of states for the common wealth. We could argue it’s not even that. It’s a federation of states. I’m pretty sure what we’ve seen this year is not what our forefathers and foremothers had in mind back in January 1901. The sooner we move past this divisive border approach the better. We all have places to go and family to see, and the sooner we can all do that, the better.”
Mark Frain at Foxtel Media: “The quest for keeping yourself match-fit, physically and mentally, for the task ahead has never been more important.”
The talent squeeze
Digital advertising and adtech industry job vacancy rates more than doubled to 9.8% over 12 months, according to IAB Australia’s inaugural Industry Talent Report. This was driven by a lack of fresh talent due to border restrictions, and the entry of new, large global organisations into the Australian market, creating a squeeze on talent availability and an increase in the cost of talent.
And those organisations that did hire staff in recent months faced an average 10% to 20% salary increase and 28% of organisations increased offshoring of local work to help manage staff shortages.
An increase in poaching, decreasing productivity and slowing growth is also resulting in organisations reporting that they are reviewing their investment in Australia.
Gai Le Roy, IAB Australia CEO: “The demand for talent in the Australia digital advertising market is the highest I have seen in my 20-plus years in the industry.”
Global consultancy Forrester, in its annual forecasts: “The pandemic’s impact on talent and the marketing they produce leaves a void CMOs and agencies must fill. In 2022, the pendulum will swing back towards creativity generated by new constructs of technology, partnerships and ingenuity.”
Mark Coad at Mediabrands Australia describes the talent squeeze as one of the greatest challenges.
“Any manager who has not experienced this is either lying, or working as a sole trader,” he says.
“I do fear it will get worse before it gets any better, and I say that on two fronts.
“Firstly, the talent land-grab invariably results in people being fast-tracked in their careers, simply to fill roles. Some have been poached, others elevated internally. Many will prosper. I sincerely hope those growing into these roles are not caught short having been promoted too early and that the expectations placed on them don’t exceed their skills and experience.
“Secondly, our industry loyalists are tired. They have worked bloody hard for their employers, their teams and their clients, and the vast majority have covered for positions in their teams that have not been filled.
“It has been a slog for many and I hope we all find ways to reenergise and rekindle our love of this industry. I am optimistic there — as we light up many of the things we all love, such as working closer together, socialising together having fun together.
“I’m a huge believer in a focus on culture and those who have worked with me will know that. I also know that everyone else will say that so let me share my perspective: don’t say it, do it.
“A common quote has always rung massively true to me: ‘Your culture is defined by the worst standards/behaviours you are prepared to accept’. This is incredibly true, but only works if you actually practice it. Because if you don’t, you won’t just lose people, you will lose your best people. You will lose the people who expect the highest standards and career potential from their professional environments. And if those are not delivered — genuinely delivered — the good people will leave. The ones who remain will be the ones who accept that lower level of behaviour and your culture will be redefined/adjusted (downwards) accordingly. Deep answer to a simple question, but it is very simply the only way to keep good people.”
Mark Frain at Foxtel Media: “The competition for talent in media and marketing has been as fierce as ever in 2021 and — with predictions of a Great Resignation as we emerge from the pandemic — the media industry needs to reimagine how we hire and nurture people.
“I truly believe it's going to take a long time to rebuild the talent pool in the industry while many of the entry positions are enveloped in heavy admin tasks. As a whole we will have to continue to invest and explore new ways of working to improve the attractiveness of those roles.
“For our industry, this means looking further than the confines of our traditional competitive set when hiring. It’s just not good enough to go through LinkedIn to target people working in the same roles in other media companies or pick up the phone and call the same recruiter to start hitting up your industry peers. We need new ideas from a diverse and varied set of backgrounds, with intrinsic and long-standing university connections
“We’re in an industry that is rapidly changing with some much momentum, we just need to start telling that story better to new and fresh talent.
“For me, you must get people to engage with your vision and show them how they’re contributing to building the future and be truly prescriptive on how their role makes a difference.
“If you want to keep good people you must invest in them, evolve their skillset and retrain and upskill them. This in turn makes them more valuable to other industries should they decide to seek challenges in the future.
“As modern day business, we also must create workplaces that reflect the new realities of how and where people do their best work. The return of face-to-face to the industry will be balanced by agile working models and navigating that will be key to keeping good people. But there are also factors beyond skillset that employees look for, they want to see our impact on the broader community.”
Mat Nunn at Nunn Media: “Probably the biggest challenge in media at the moment is staff. With no international staff coming inbound, there is a massive shortage of skilled workers within the two-to-five-year experience bracket.
“That has meant that everybody is basically trying to steal everybody's resource. That's been a real challenge, not only for us but for everybody.
“We haven't turned over any senior people. We've got a very loyal, solid, high-performing executive team. We've retained 100% of those.
“I think unfortunately when I was growing up, you didn't really move jobs. You were very loyal and you worked in a particular way. Whereas I think the culture now for younger people perhaps isn't that way. The one-to-three-year starters within this industry, they're very transient.”
Greg Graham: “We mustn’t forget that talent is our most important asset. While agencies talk a lot about the importance of people and culture, and more recently mental health, I’m not entirely convinced they’re walking the talk. If we look more closely, I believe we’ll find some window dressing and a dash of tokenism. Scratch the surface of that impressive sounding press release or awards entry and what you’ll find is a pile of frogshit.
“What I’d like to ask agencies is this: What are your real tangible actions around staff retention? Where are the stats and metrics to back up your claims? Instead of giving staff an extra doona day, how are you addressing the issue of burnout with substantial sustainable help.
“The churn-and-burn mentality coupled with low pay should be a thing of the past. Talent shortages and ‘the big resignation’ we’re seeing sweeping through the media and marketing industries in the UK and US, and now here in Australia, demand we value, nurture, retain, train and develop our talent. Clients want the best talent, stability and consistency — and we as an industry must ensure we are paid fairly to deliver this.
“At the start of the pandemic most agencies completely cancelled or delayed their training and development programs, and that budget went straight to the bottom line. Recently some have reinstated the programs, albeit in a virtual format, and let’s hope they ramp up further in 2022. I believe face-to-face engagement is much more effective than virtual training, but virtual is better than nothing.
“Another unfortunate impact of not being in the office is that it’s had a dramatic effect on informal training. The stuff you pick up by sitting with or next to your manager, overhearing a conversation, receiving random feedback or seeing your boss model great leadership behaviour is not available when you’re working in your spare bedroom or your kitchen table. Not having mentors or coaches in the office environment to guide you can also take its toll.
“For agency leaders, my advice is this: Now is the time to take action, implement new programs and invest back into your most important asset — your people — and make retention your number-one priority.”
Yaron Farizon at MediaCom says the talent squeeze has always been with us.
“There has always been one, and not just here in Australia,” he says. “Is it slightly more exacerbated right now ? Yes, sure. But we have a plan.
“Creating a place where your best talents want to stay, and the best industry talent want to work, is a vision we are committed to as an agency, and as a group. On the back of the last couple of years, people are changing their relationship to work and productivity, and this reflects in how we build our culture and value proposition.
“For example, we have relaunched GroupM’s Graduate program, Launch Pad, and restructured to help bring more talent through in the early years, giving the teams more support and us a bigger talent pool to train and grow. We’ve also built and expanded carefully-crafted initiatives in training, development, and enjoyment to ensure that we are a place where people can enjoy what they do, feel challenged professionally, yet supported.
“We’re investing in training our teams to become mental health allies for their peers, supporting our people with an array of mental health and wellbeing initiatives. And of course, building a real headway in how the future of hybrid, more flexible ways of working, will look like for our people and clients.
“People are making big decisions to get back control over their lives. Making sure our people are having fun at work, are happy, properly challenged yet supported and fairly rewarded is the core of leaders’ work, every day. And being kind. In the context of 2022, it is about helping our people to be the best versions of themselves, renew their passion and future goals, and really support them in taking more control over their lives.”
Sir Martin Sorrell at S4 Capital: “We have a talent squeeze? They [the global holding companies] were firing people last year. So it's lack of consistency and that's what causes the problem. You've got an oscillation instead of a steady growth bar.”
He says they wouldn't have fired 25,000 to 30,000 people if they were truly worried about their talent .
“You can do the arithmetic, you can look at their numbers,” Sir Martin tells AdNews. “They paid all those people off, threw them out of work, and they've been rehiring them this year at higher rates. Go figure.
“In Australia with BizTech, which is now, a full part of MediaMonks, we took the decision — despite the fact engineers couldn't visit clients because of the lockdowns — that they were in such short supply and the cost of cutting and going back was so great that we would maintain the fabric.
“I think it was short-termism. That's the basic problem with manager-managed companies. Where you have a split between ownership of control. There's too much focus on the short-term and not enough focus on the long-term.
“We are fortunate that we operate with 50% of our revenues in tech. And therefore we probably naturally operate with more expansive companies who, I put it, 'look at the sky rather than look at their boots'.
“Obviously people are reassessing their lives as a result of the pandemic. By the way, I would say CMOs are reassessing their agency relationships. We are seeing a lot of CMOs reassess their agency relations. They're not only reassessing their personal lives, they're reassessing their professional lives.
“The demand for digital talent has been strong and growing and sort of pushing the price up for many years. This is nothing new. What is new is what we call the levelling up. What we are seeing, and it's good news, is the gender pay gap being reduced. Black, Hispanic, Asian American, we are very strong. We have 40% people of colour across the business, which for a tech company, or a technical services company or technology services company, is unusual.”
Dennis Wong: “The talent squeeze is happening because the industry has for too long relied on imported talent and not grown its own. In short, the elevated demand for work isn’t being fed by a strong enough pipeline of talent.
“It’s also happening because of market disruption — the rise of data and the convergence of different types of businesses competing for the same talent. For example, a tier-one talent analyst could work in market research, but equally internally for a business such as WooliesX or Sportsbet, or perhaps a hedge fund.
“It’s also happening because marketing isn’t seen to have the lead growth role it once had within most organisations. So agency land isn’t the most aspirational place to be, all choices considered for the best talent.”
Carmen Bekker, partner-in-charge, KPMG Customer, Brand & Marketing Advisory: “Everyone wants the best people so we are seeing a competitive market which is driving up the cost of hiring across the marketing sector. I’m grateful we have so many skilled Australians. I encourage everyone to use this time to upskill.
“We are also seeing moves by people to reassess their current roles and consider where they want to go with their careers. We have some fantastic roles open at KPMG in the customer team so if anyone is considering a move
into consulting do get in touch with me.
“When the borders open, we should see this situation start to normalise. Australia is a very attractive market for top talent, both overseas Australians looking to come home as well as foreign talent looking to come and work here for a few years.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at firstname.lastname@example.org