First I am very happy to hear that the economy is showing signs of a pickup. Need to look at some aggregate data for that.
It is not just a matter of giving out pink slips but how you did it.

First I am very happy to hear that the economy is showing signs of a pickup. Need to look at some aggregate data for that.
It is not just a matter of giving out pink slips but how you did it.

I think it’s also going to be very tough for everyone who left and started their own agencies. The number of competitors is piling up rapidly. It will be interesting to see, but I think there will be another big realignment in the industry as too many people create new agencies and a good chunk of them fail within the next few years. What do you think?

I think it’s also going to be very tough for everyone who left and started their own agencies. The number of competitors is piling up rapidly. It will be interesting to see, but I think there will be another big realignment in the industry as too many people create new agencies and a good chunk of them fail within the next few years. What do you think?

Atul,

The rate of job loss is decreasing:

http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET?SITE=PAPOE&SECTION;=HOME&TEMPLATE;=DEFAULT

Oil Prices have been increasing due to increased demand:

http://finance.yahoo.com/news/Oil-prices-jump-to-new-high-apf-15149868.html?sec=topStories&pos;=8&asset;=&ccode;=

— Those two alone spell it out… more oil is being used … and less people are being fired…

Atul,

The rate of job loss is decreasing:

http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET?SITE=PAPOE&SECTION=HOME&TEMPLATE=DEFAULT

Oil Prices have been increasing due to increased demand:

http://finance.yahoo.com/news/Oil-prices-jump-to-new-high-apf-15149868.html?sec=topStories&pos=8&asset=&ccode=

— Those two alone spell it out… more oil is being used … and less people are being fired…

Are you living on another planet? Ad agencies are doing just fine. They have all the people they need. This economic meltdown was an excuse for them to cut all the dead wood. An agency insider told me the trend is going to be to hire freelancers on an as needed basis so they won’t have the problem of firing people in the future. That’s how it’s going to be from now on – a small core group of employees and a few freelancers from time to time. I applied for a job online in New York and got an automatic response that said 1500 creative people in had all responded to the job. And it was only for two weeks of freelance at a low day rate. There is nothing but desperation among the advertising unemployed. I expect to see a few commit suicide soon it’s so bad. Also, the BDAs are still going to lay off more people. Clients are spending their money in other areas, social media, interactive etc. The way I see it, if you don’t have a job in advertising today, you’re not going to get one.

Are you living on another planet? Ad agencies are doing just fine. They have all the people they need. This economic meltdown was an excuse for them to cut all the dead wood. An agency insider told me the trend is going to be to hire freelancers on an as needed basis so they won’t have the problem of firing people in the future. That’s how it’s going to be from now on – a small core group of employees and a few freelancers from time to time. I applied for a job online in New York and got an automatic response that said 1500 creative people in had all responded to the job. And it was only for two weeks of freelance at a low day rate. There is nothing but desperation among the advertising unemployed. I expect to see a few commit suicide soon it’s so bad. Also, the BDAs are still going to lay off more people. Clients are spending their money in other areas, social media, interactive etc. The way I see it, if you don’t have a job in advertising today, you’re not going to get one.

outonmyear — there is no way they are doing “just fine” — look at their balance sheets… yes I agree with you there is a shift taking place… all freelancers… all digital…. I know this… we all know this…

But to say they are “doing just fine” is not really accurate… they are trying to figure out what they can do it stay in business during the recession… hence all the layoffs and firings…. and in many cases… such as Enfatico… they are not staying in business…

They made poor decisions in the past… and now because of those poor decisions they are having difficulty making it going forward other than firing everyone and his brother… reducing their talent pool and hurting their ability to take part of the recovery.

They are hiring freelancers because they lack digital skillset for example….. these people should have never been fired in the first place…..

outonmyear — there is no way they are doing “just fine” — look at their balance sheets… yes I agree with you there is a shift taking place… all freelancers… all digital…. I know this… we all know this…

But to say they are “doing just fine” is not really accurate… they are trying to figure out what they can do it stay in business during the recession… hence all the layoffs and firings…. and in many cases… such as Enfatico… they are not staying in business…

They made poor decisions in the past… and now because of those poor decisions they are having difficulty making it going forward other than firing everyone and his brother… reducing their talent pool and hurting their ability to take part of the recovery.

They are hiring freelancers because they lack digital skillset for example….. these people should have never been fired in the first place…..

Unsolicited RFPs Rock.

Unsolicited RFPs Rock.

Founder, we’re looking at this situation from two different points of view. I’ve never been more than a humble copywriter so I don’t know from RPFs whatever the fuck they are. And I have no digital experience because the digital kids won’t let me play in their sandbox. I have a direct and general background. All the people I know who are working are having the best times of their lives. I used to have to fight to get a good Tv assignment. Now everybody’s getting the best assignments. A friend who has worked only in direct just produced half a dozen Tv spots. The first in his life. These are wonderful times if you’re working. And if you’re out, agencies aren’t going to let you back in. They are restructuring to be smaller and they’ll be happy that way. And employees now feel a sense of job security as they know agencies can’t cut back much further without hurting themselves. Also, Enfatico is only a problem for a few people. I have a friend who works there and he will now be a CD at Y&R. No problem for him. But it means that I have less of a chance of finding work – one lass agency to send my book to. Most of Enfatico’s employees will keep their jobs to service the client, only as Y&R employees. As I said, these are great days if you’re employed. Meanwhile I’m about to become homeless.

Founder, we’re looking at this situation from two different points of view. I’ve never been more than a humble copywriter so I don’t know from RPFs whatever the fuck they are. And I have no digital experience because the digital kids won’t let me play in their sandbox. I have a direct and general background. All the people I know who are working are having the best times of their lives. I used to have to fight to get a good Tv assignment. Now everybody’s getting the best assignments. A friend who has worked only in direct just produced half a dozen Tv spots. The first in his life. These are wonderful times if you’re working. And if you’re out, agencies aren’t going to let you back in. They are restructuring to be smaller and they’ll be happy that way. And employees now feel a sense of job security as they know agencies can’t cut back much further without hurting themselves. Also, Enfatico is only a problem for a few people. I have a friend who works there and he will now be a CD at Y&R. No problem for him. But it means that I have less of a chance of finding work – one lass agency to send my book to. Most of Enfatico’s employees will keep their jobs to service the client, only as Y&R employees. As I said, these are great days if you’re employed. Meanwhile I’m about to become homeless.

@outonmyyear “so I don’t know from RPFs whatever the fuck they are”

An RFP is literally a “request for proposal” generally speaking it’s the very first step a company makes when it’s searching for an advertising agency.

It states “we are looking for an ad agency that can do X,X and X … and what will you charge me to do it… and how will do you it… and detail X , X and X”

These documents are sometimes monsters, going on for pages upon pages…

The responses to them are monsters as well.. At this point it’s called “the pitch” .. its when the sales people go try to sell their agency skillset…

The next step is after the company sends out 10 RFP’s or so… get’s 8 responses… narrows it down to 4 … then all 4 of those firms reach the “the pitch” part… basically it’s when you wine and dine the CMO of the company to give them your business…. or in the case of Walmart Circa @2006 … the agencies give out joyrides on sports cars to the CMO’s…

I understand where you are coming from…. I wasn’t always employed… during the 2001-2002 recession I got the pink slip like everyone else did at the firm I worked for.

At that time I thought the recession was never going to be over… we had the .com crash…. 9/11 … then anthrax attacks… it was crisis after crisis …. and at the end… it recovered and everyone had a job….. until the next crash…

I am not removed from this recession one inch… I got to worry about payroll.. worry about clients.. worry about their businesses …

trust me when I say I totally understand.

@outonmyyear “so I don’t know from RPFs whatever the fuck they are”

An RFP is literally a “request for proposal” generally speaking it’s the very first step a company makes when it’s searching for an advertising agency.

It states “we are looking for an ad agency that can do X,X and X … and what will you charge me to do it… and how will do you it… and detail X , X and X”

These documents are sometimes monsters, going on for pages upon pages…

The responses to them are monsters as well.. At this point it’s called “the pitch” .. its when the sales people go try to sell their agency skillset…

The next step is after the company sends out 10 RFP’s or so… get’s 8 responses… narrows it down to 4 … then all 4 of those firms reach the “the pitch” part… basically it’s when you wine and dine the CMO of the company to give them your business…. or in the case of Walmart Circa @2006 … the agencies give out joyrides on sports cars to the CMO’s…

I understand where you are coming from…. I wasn’t always employed… during the 2001-2002 recession I got the pink slip like everyone else did at the firm I worked for.

At that time I thought the recession was never going to be over… we had the .com crash…. 9/11 … then anthrax attacks… it was crisis after crisis …. and at the end… it recovered and everyone had a job….. until the next crash…

I am not removed from this recession one inch… I got to worry about payroll.. worry about clients.. worry about their businesses …

trust me when I say I totally understand.

you have the added worry of being a total wanker too.

you have the added worry of being a total wanker too.

Things seem to be thawing out a bit and we’ve noticed the same pick-up in demand.

Rather than lament over whether or not you screwed up by letting too many people go, you should see this as an opportunity to change your business model to maximize your brand (read pricing power) and flexibility moving forward. Why hire back the PHP or Flash programmers if you don’t have to? There are a small and growing number of onshore companies that can handle that production for you at a lower cost than you were paying your previous production staff and probably with higher levels of quality.

Although there can be a decent profit margin associated with production, in my roughly fifteen years of experience managing the operations of several large digital agencies, having production as part of your in-house offering introduces a number of problems into a creative organization:

1. There is typically a conflict between the creative culture and the production culture. Whereas creative needs the flexibility to generate great ideas, production needs structure in order to actually get those ideas out the door on time and within budget. When push comes to shove, creative usually gets all the time they want and production is left with the remainder to get the idea executed by the deadline.

2. The problems you have with clients are generally due to execution problems, not necessarily problems with the creative ideas or strategy. These problems, however small, negatively impact your brand and distract senior management.

3. Having production in-house can negatively impact your pricing power. I don’t know how many times I’ve had to convince a brand’s purchasing department that they shouldn’t try to categorize our digital agency alongside the offshore chop shops in India and elsewhere in an attempt to drive our rate down. They couldn’t or didn’t want to understand that we provided high value strategy and creative capabilities those firms didn’t.

4. Keeping a production capability up-and-running is more expensive than most managers think it is. Many just look at the salary and benefit costs to come up with an hourly cost. There are many more costs that need to be factored in, such as computers, software, management, space, bench time, turnover, severance, etc. The typical agency probably pays on average somewhere north of $100 per hour for internal production staff.

The last several months have been very tough on the agencies. Some have responded well, some haven’t. I’m not sure the big full-service agencies will be able to survive due to their size, legacy business models, and lack of leadership. Contrary to the insular agency thinking no one channel is more important than another. This includes digital channels, which are being positioned as the silver bullet they aren’t or ever will be. TV, print, and radio aren’t going away although they are rapidly evolving. At the end of the day, it’s about the customer. What do they need or want? What media do they use to learn about products and make purchase decisions?

It’s time for a new way of thinking across the board.

Things seem to be thawing out a bit and we’ve noticed the same pick-up in demand.

Rather than lament over whether or not you screwed up by letting too many people go, you should see this as an opportunity to change your business model to maximize your brand (read pricing power) and flexibility moving forward. Why hire back the PHP or Flash programmers if you don’t have to? There are a small and growing number of onshore companies that can handle that production for you at a lower cost than you were paying your previous production staff and probably with higher levels of quality.

Although there can be a decent profit margin associated with production, in my roughly fifteen years of experience managing the operations of several large digital agencies, having production as part of your in-house offering introduces a number of problems into a creative organization:

1. There is typically a conflict between the creative culture and the production culture. Whereas creative needs the flexibility to generate great ideas, production needs structure in order to actually get those ideas out the door on time and within budget. When push comes to shove, creative usually gets all the time they want and production is left with the remainder to get the idea executed by the deadline.

2. The problems you have with clients are generally due to execution problems, not necessarily problems with the creative ideas or strategy. These problems, however small, negatively impact your brand and distract senior management.

3. Having production in-house can negatively impact your pricing power. I don’t know how many times I’ve had to convince a brand’s purchasing department that they shouldn’t try to categorize our digital agency alongside the offshore chop shops in India and elsewhere in an attempt to drive our rate down. They couldn’t or didn’t want to understand that we provided high value strategy and creative capabilities those firms didn’t.

4. Keeping a production capability up-and-running is more expensive than most managers think it is. Many just look at the salary and benefit costs to come up with an hourly cost. There are many more costs that need to be factored in, such as computers, software, management, space, bench time, turnover, severance, etc. The typical agency probably pays on average somewhere north of $100 per hour for internal production staff.

The last several months have been very tough on the agencies. Some have responded well, some haven’t. I’m not sure the big full-service agencies will be able to survive due to their size, legacy business models, and lack of leadership. Contrary to the insular agency thinking no one channel is more important than another. This includes digital channels, which are being positioned as the silver bullet they aren’t or ever will be. TV, print, and radio aren’t going away although they are rapidly evolving. At the end of the day, it’s about the customer. What do they need or want? What media do they use to learn about products and make purchase decisions?

It’s time for a new way of thinking across the board.