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The Deep Dive

Is media agency young talent good enough? Maybe not. MFA board responds

By Paul McIntyre - Executive Editor

22 July 2019 6min read

PodcastOne Studio

MFA board members in the studio debating the smarts, hunger and curiosity of the agency sector's 20 and 30-somethings. L-R: Hyland Media's Virginia Hyland; Mi3's Paul McIntyre; Initiative's Mel Fein; OMG's Peter Horgan and GroupM's Mark Lollback

By Paul McIntyre - Executive Editor

22 July 2019 6min read

Do young media agency talent really have the smarts, curiosity and hunger to compete with their peers in tech and consulting - and the challenge from AI? The agency sector's "Middle Earth" might have a problem. MFA board members - Initiative CEO Mel Fein, Hyland Media founder Virginia Hyland, GroupM CEO Mark Lollback and OMG boss Peter Horgan - dig in.   

“You’ve come up with some sort analogy for the rump, the engine room of the agency community, which is fundamentally wrong.”

- Peter Horgan, OMG

Peter Horgan

MFA Chair Peter Horgan

 
Change your habit. Get a richer, more robust and nuanced debate from agency leaders in the Audio Edition here. It's the smartest 20 minutes you'll spend informing yourself this week. Or read the abridged version below, if you must.

The battle for media agency middle earth

The average Facebook employee earns $250,000 per year and consulting firms pour huge investments into elite graduate programs. With such competition for emerging talent and less resource to fund, develop and keep the industry's best, do media agency ‘middle earthers’ – the talent pool that makes up the heart of agencies – have the hunger, curiosity and smarts to help agencies to see off incoming challenges posed by consultants, marketers in-housing and the big platforms wooing clients direct? 

The MFA's board nods an emphatic yes as they head towards the MFA EX event in October, when the entire media agency sector shuts its doors for a day to back an effectiveness expo and applaud the industry's best on stage. 

MFA chairman Peter Horgan immediately shoots down any notion that junior to mid-level staff are not up for the bigger fight.

“Let’s challenge your descriptor around the ‘middle earthers’,” says Horgan. “You’ve come up with some sort analogy for the rump, the engine room of the agency community, which is fundamentally wrong.”

Horgan says the accelerating pace of change within media means by definition only the smart, curious and ambitious can thrive. Meanwhile, their exposure to verticals across industries means that naturally, both clients and tech platforms will try to poach agency staff, “because they deliver genuine impact for those businesses,” Horgan suggests.

Virginia Hyland agrees. She says marketers and platforms coveting agency staff illustrates the richness of talent within the sector – and will create a positive feedback loop.

“We should be celebrating our depth and diversity. We are skilling people in tech. We are skilling them in what content works in which channel. Our knowledge is so broad that marketers want us in and out of house,” Hyland suggests.

“If marketers want to take media people in-house, great! That’s still media industry talent going into marketers’ businesses and then coming back out to the media industry again.”

 

“Looking back three or four years ago, I think our industry was in a pretty disgraceful place to be honest. The way we treated our teams, the way we dealt with clients was not our proudest moments as an industry.”

- Hyland Media's Virginia Hyland

Virginia Hyland

Hyland Media's Virginia Hyland

 

Honesty + fair fees = lower churn

Staff churn remains an industry-wide issue. Coming from a marketing background, says Mark Lollback, “it blew my brain”.

“In a marketing department, if you’re going to churn at 10 or 15 per cent, you’re worried.”

However, he says the media agency figure, circa 30 per cent, has to be taken in context. 

“It tends to be the very young people that come in, [stay] in one to three years and actually about 30 per cent of them leave to go overseas.  That’s a great thing.  I’m a big fan of Australian young people going overseas to get experience,” says Lollback. 

Virginia Hyland believes there is a direct correlation between staff retention and agency remuneration and contracting models. This is played out mostly in resourcing levels with industry research highlighting that over the last seven years, the number of agency practitioners that feel adequately resourced to perform their role has decreased from 77 per cent to 70 per cent, while those actively looking for a job in the next six months has increased from 21 per cent to 30 per cent.   

“Looking back three or four years ago, I think our industry was in a pretty disgraceful place to be honest.  The way we treated our teams, the way we dealt with clients was not our proudest moments as an industry,” she admits.

After fallout over transparency issues and pricing models – domestically and internationally – “we have had to be braver in discussions with clients,” over fees, says Hyland.  That approach, along with a ‘reputational reset’ across the sector is bearing fruit, she suggests. 

“What that has shown is that we can then increase the salaries … of the teams that we employ and then help those teams to believe in this industry again and be proud of what they’re doing.”

That leads junior and mid-level staff to “step up, start to work harder and think smarter” about delivering business outcomes, claims Hyland.

“As an industry, we’ve come together in a far more powerful way in the last two years to address the issues and have those very brave conversations [around fees] that actually make a difference to our industry,” she suggests. “So, I think our 20 to 30-year-olds are now far more proud of working for agencies and delivering great results for businesses. 

“I think we do underestimate the smarts that they bring to those clients on a day-to-day basis.”

Whilst there are pockets of the industry that reflect Hyland's sentiment, the broader market still has some challenges ahead. Media i's industry research in the past seven years shows a five percentage point drop in agency staff "feeling pride in their work" to 90 per cent and those who state they're adequately remunerated for their role is also down five percentage points to 50 per cent over the same period. 

“30 per cent churn tends to be the very young people that come in, stay one to three years - and actually about 30 per cent of them leave to go overseas. That’s a great thing. I’m a big fan of Australian young people going overseas to get experience.”

- Marl Lollback, GroupM

THE PULSE

Quick question: Is the MFA board correct?

Choices
Mark Lollback

GroupM's Mark Lollback

 

Raising the level of debate

Media agency bosses think the trade press played a role in talking down the industry. As a result, they struck back, pulling money from awards programmes and hitting publishers in their pockets.

They want a more positive discourse and agenda.

Issues around “murky supply chains almost gave all trade press an invitation to take one issue and snowball it for two to three years … and just keep hitting the industry more and more and more,” says Initiative CEO Mel Fein.

She suggests anonymous commentary below the line can be “evil-like”, and supports John Steadman’s recent attempts to address it. 

But isn’t part of the problem that negative stories attract more attention and more commentary, incentivising publishers to chase hits? Is agency ‘middle earth’ hungry enough and curious enough to get beyond negative and transactional stories?

Fein thinks tall poppy syndrome is particularly acute in Australia. 

“They take a headline and it just snowballs. It’s not seen as interesting if it’s a considered, intelligent article that comes out. It’s not as fun, I guess, for a lot of people to start commenting and for that to snowball. [Tall poppy syndrome] is just somehow ingrained in our culture.”

Mark Lollback agrees. 

“I don’t think any organisation whose focus is clickbait and sensationalism is actually bringing any value to the party,” he says. “My simple analysis is: why do they exist? I think we give them more airtime than they deserve, to be honest. I don’t think many of our clients actually give a shit, or read the stories.”

Agency staff certainly do.

“Yes, they do. They’ll also probably take it for what it’s worth. I don’t think they’re interested in half of the rubbish that gets written,” says Lollback, bemoaning the lack of intelligent debate. “We should be taking a topic and using those forums to help educate people,” he suggests.

Horgan says agency staffers can only read what is put in front of them.

“You’ve  questioned whether our mid-level people have the curiosity to actually go for deeper stories - if they’re available.  Our whole industry is about trying to tease out of the tea leaves how consumers behave and intercept them in a way that is going to make a meaningful difference,” says Horgan. 

“Going deeper is exactly what our industry foundations are built on. I think if we offer them the right content, framed in the right way, these are people who will lap it up.  That is why we welcome a new entrant into the trade press that is going to help champion that,” Horgan adds. “We’ll be pushing it from our side as well.”

 

“We have had huge amounts of energy in the lead up to the MFA EX submission. Only five agencies will get the opportunity to be on stage so our guys went pretty hard in the fight for entry.”

- Initiative CEO Mel Fein

Melissa Fein

Initiative's Mel Fein

 

Keeping pants on

Mark Lollback says he couldn’t agree more – and that clients have also played a role in recognising the negative impacts of “unrealistic retainers” and “procurement-led” directives. “That’s a two-way street. If you are going to pay fairly, you deserve absolutely all transparency,” says Lollback. “If you don’t care how your agency is being remunerated, that is a totally different kind of relationship.”

Horgan thinks there is more work to be done. 

“We have a duty of care to all of our staff and that means we need to have the brave conversations, grow up more and lean into our clients - particularly some of the procurement teams - and actually challenge some of the remuneration models and offers on the table.”

But he accepts that the industry has been its own worst enemy.

“We love chasing it to the bottom.  I hope and I wish this debate around pitching truly comes to a mature discussion around how clients pitch and how we engage as an industry,” says Horgan.

“There is not a week that goes by there isn’t somebody in this country buying business at ridiculous rates that we should as an industry just say no to. We - and many other people sitting on this table - have walked out of pitches and resigned clients because of duty and care of people.”

But Horgan sees signs that the market is maturing. 

“More and more organisations are saying to their clients, 'You know what, that’s probably not going to serve you well or serve us well, because we won’t be able to have the right number of people. We won’t be able to fund and deliver the value and the quality of work that you expect from us on those fees and on those commissions.  It’s actually just wrong.  So you’re probably better going off somewhere else’.”

 

Resetting the metrics of success

Horgan says the decision to pull awards across industry was driven by a need for a reset, to redefine the metrics of success both for the sector and for clients. The focus is now on “effectiveness, demonstrating the fruits of our labour and how that can drive business outcome for clients”. That, he says is the key focus of MFA EX. 

Mel Fein says MFA EX has re-energised teams. “We've had huge amounts of energy in the lead up to the submission. Only five agencies will get the opportunity to be on stage, so the odds are pretty low and so our guys went pretty hard in the fight for entry.” 

Previously, Fein says the awards treadmill had become “monotonous”. Now she says there is an opportunity for “the whole industry rather than leaders of the business to win and be on the stage. That is the real opportunity that I’m so proud of - and I can’t wait for the day.”

Horgan believes that puts the ‘middle earther’ argument to bed.

 

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