As I embarked on a quest to better understand the qualities of agency and client engagement I naively thought that most were doing this well and I just needed to learn more about how that excellence transpired. What I found was a great deal of crisis within the industry, it's talent and it's leadership.
A Harvard Business Review article points out that only 2% of Fortune 500 companies are what they would call "highly digital". This creates a lot of challenges but also a lot of opportunity.
Industry Crisis:
Brands depend on digital marketing for growth and as a tool for driving their relationships for their customers. Proctor & Gamble, the largest advertiser in the U.S. spends more than $2B a year. U.S. marketers spend an average of 2.5% of their total company revenue on digital marketing activities according to a 2013 report by Gartner Inc.
Only about 1 in 3 CMO's said they feel that their companies are spending enough to build out their digital capabilities, strongly indicating that spend towards digital will only continue to increase. The internet's projected share of ad spending is nearly 27% according to Advertising Age 2014 edition of their Marketing Fact Pack.
Talent Crisis:
It's estimated that marketing & advertising agencies have an annual employee turnover rate of upwards of 30%. To put this in perspective, only the hospitality industry – made up of people who work at hotels and tourist attractions -- has a higher rate (37%). There's a great deal of competition for talented digital marketers but the efforts to retain that talent are minimal. "We need to fight with startups, technology and platform companies for talent," according to Maurice Levy, CEO of Publicis Groupe. Even within organizations that provide programs to increase retention, retaining talent is rarely measured, analyzed and reported upon as part of regular health measurement.
Even companies who are leveraging human resources and operational resources to impact talent happiness, engagement and longevity, this data is rarely shared as part of the top-level health of the organization or as a predictor of future performance.
Leadership Crisis:
Authors on the topic of leadership share that 7 out of 8 of the 130 million people in the US workforce are unhappy in their jobs. Those numbers may not correlate perfectly in digital marketing, but the high level of turnover in agencies and on marketing teams within brands is illustrative of the problem.
"The spoils go to those who can best imagine state-of-the-art products and creative relationships—and then successfully rewire their enterprises as needed," The Year of the Digital Leader.
This rewiring and revolution requires a change of priorities, a change of thinking and a focus on investing in the relationship at least as much as we invest in technology. What we're doing isn't working. Turnover in the industry is high, dissatisfaction with the relationship between agency and client is high and there is a great deal of untapped revenue and human potential.
Book Excerpt