YEAR-END REVIEW: When bigger really is better

It's a year many would sooner forget, but 2001 may well mark a turning point for agency executives. A year when a promising career path mattered more than the size of a compensation package. Alicia Kan looks at the highs and lows of life in agencies. How has the year been for advertising executives? In a word, rough. Have agencies changed and adapted to what has been a Sod's Law year marked by a technology slowdown, a global slump, dwindling advertising revenues, salary cuts, redundancies, a terrorist attack on the US and a war in central Asia? Some have, but most are still feeling their way. Media's year-end ad agency survey polled more than 2,500 advertising executives region-wide on a wide range of issues, from job satisfaction to their opinions on how well their respective agencies were riding out the storm. It also asked them to rank the top five agencies in terms of creative reputation, account servicing and the company they would most like to work for. The survey, conducted online by Asia Market Intelligence, drew a response rate of 12.5 per cent. The most significant findings drawn from the answers of 320 individuals who completed the poll are certainly compelling. Nine out of 10 feel it is important to belong to a global network. One head of an advertising agency recently remarked that the world would belong to the very big or the very small, and advertising executives are feeling this point of differentiation quite keenly. The merger and acquisition flurry in recent years has resulted in six powerful global players: the WPP Group, the Omnicom Group, the Interpublic Group of Companies, Publicis Groupe SA, Havas Advertising and Dentsu. Being a member of the "big six" makes sense: consolidated resources means a more widespread network to ride out rough seas when times get tough - although this year has been exceptional with just about every economy hitting the rocks - and better benefits for global clients. The M&A dance has slowed down for the moment, replaced by profit warnings right and left. Zenith Optimedia predicts an advertising recovery will start in 2002, but world advertising spending is still tipped to fall 1.3 per cent next year. In the US, where acquisitions have been taking place until recently, Zenith says it sees a fall of 3.5 per cent in 2002. Full recovery in the sector will only be felt in the fourth quarter. Despite dwindling revenues and shrinking staff payrolls around the world, Asian advertising executives are confident in the long-term benefits of belonging to a global network. Interestingly, 85 per cent of those who have worked at their present agencies seven years or longer - and they make up the second biggest group among the respondents - are most vocal about the advantages of being part of a worldwide player. The first two years of an executive's worklife are critical in deciding whether he or she stays or leaves. More than half of the respondents - 51 per cent - have worked at their respective agencies for two years or less. The next biggest group at 18 per cent are respondents who have been faithfully working for the same agency for seven years or more. The two-year period is a time of soul-searching for a new advertising executive; do they treat me well, do I have a future here, do I like my job are the questions that regularly cross their minds. The fact that the second-biggest number of respondents are seven-year veterans belies the common impression that the revolving door syndrome is rife in agency circles. Yes, some agency people may well flit around like flies looking for the best deal, but it appears that only two out of 10 are seriously thinking of leaving their agencies. Surprisingly, despite the prevailing belief, the main reason for walking out is not money or long hours worked, but career development. If there is a message in this, all agencies had better do more than simply mouthing on about training. They had better start nurturing young talent, training them, treating them better, and motivating them. More than money, these are the factors that will secure staff commitment and loyalty. One agency that has been moving in this direction is Leo Burnett. For the past three years, Burnett has been conducting an in-house survey globally called the Agency Climate Survey. Asia regional human resources director Nadia Pan says media's findings bear out what Burnett has found in its poll. "Our employees' issues with the agency are not about money," Pan says. "They're more concerned about training and development. They want leadership and communication." Burnett now allocates a specific portion of payroll for training, which is a combination of in-house and external programmes. Pan says there has been a strong trend towards job satisfaction, with the renewed emphasis on training and development. Agencies within the network which score highly in Burnett's poll also tend to enjoy sustainable success - both financially and creatively - in the long term. "They may not get the highest revenues, but their performance is consistent," Pan says. Communication and transparency make a huge difference as well. CIA managing director Charles Brian-Boys recalls asking in all the agency's staff into the conference room to show them that the latest business figures were considerably down. "They had three choices: make the necessary redundancies, look at closing down the business or everyone gets a 20 per cent pay cut but we all retain our jobs." The last option got the overwhelming vote. "It's a strong bond we have here," he says. "The economic situation has pulled everyone together in our agency; people here act more like a family." Despite longer working hours and less staff, agency people still believe their senior management has done well under the circumstances. Only one out of 10 respondents think their senior management's performance has been poor in today's harsh climate. Having said that, a possible bias may exist as the respondents are survivors of the inevitable redundancies plaguing the region as much as it is impacting the rest of the world. Seven out of 10 expressed confidence in senior management's ability to take their companies through the current crisis. The same number believe that despite the dire situation, their employers have still provided an environment that fosters creativity. Bartle Bogle Hegarty's creative director, Steve Elrick, says: "Our people can see that a tight-knit unit like ours is all heading in the same direction - that everyone, whichever department, is respected for their ability to contribute to creativity. And people also see us standing firm on the value of creative work - like our refusal to present creative work at pitches; as though serious insight into brands and great creative work can be conjured up in a couple of weeks. "I've had many other agency people applaud us on this. They say 'I wish we could do that.' I usually reply, you can. Grow some balls." When it comes to best practices, Elrick says the best creative people are self-motivated. "All I hope I have done is give the teams the environment in which they trust myself and the other people in the room to choose and fight for the best work devoid of politics or any other factor," he says. Training and development is a no-brainer. "We try to have fun together. Doesn't it just appear that a lot of agencies are depressingly serious and bland? We've also tried to give our people a little wider scope too - we've asked them to look outside advertising for inspiration. Sent them on courses that have nothing to do with ads," says Elrick. Despite what's happening, advertising is still the career for most respondents. The survey shows two out of 10 plan to leave the industry altogether in the next 12 months. Six out of 10 intend to stay - job cuts and salary cuts and longer hours notwithstanding. Hong Kong 4As chairman Jeffrey Yu has said that ad executives need a passion for advertising. The fire is still there, but it helps that agencies are working furiously at stoking the passion by developing their staff and providing the appropriate environment for growth. "Getting the right heads (of divisions) is pretty damn important," says Ogilvy & Mather vice-chairman Tim Isaac. "We also care about awards - it's at the heart of what we do." Isaac says the human resources function had never before existed in ad agencies, but O&M is consciously upgrading, advising and training staff. How does he manage to keep communications flowing when the agency has grown so huge? Isaac says management does its best to keep connected. "I write up a chatty email to everyone in the agency, with little anecdotes. It's tough, but we need to keep the communication channels constantly open. And there's room for improvement. We're aware of how we're not doing it well enough." Which agencies do ad executives rate most highly? Ogilvy & Mather's formidable reputation continues to precede it. The network trounced rivals, topping media year-end measurement of the creative and account servicing reputation of ad agencies. Naturally, this made O&M the it agency again in this year's poll. The majority of respondents all want to work for the agency, which is lead by regional chairman Miles Young, media's choice for its new Agency Head of the Year award. The sheer strength of O&M's creative and account servicing muscle meant that the fight was really for second place. BBDO and J. Walter Thompson were respectively honoured in second place for their creative and account servicing reputation respectively. In the mixed bag of media and ad agencies that respondents would most like to work for, O&M was followed closely by MindShare in second place, Leo Burnett in third, Zenith Media in fourth and Bartle Bogle Hegarty in fifth. The online poll went to 2,569 employees spread across more than 500 advertising and media agency offices in Asia. In all, 320 completed questionnaire forms, or 12.5 per cent of the total, were returned to Asia Market Intelligence, which conducted the poll. According to AMI, no more than seven per cent of completed questionnaires came from one particular agency. More than 60 per cent of votes for the top agency came from employees outside of the top five agencies in the three ranking categories. The results of the survey show the attitudes towards advertising agencies among those who work in the industry.

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