Ad agencies increase focus on progressive compensation, diverse talent

Source: O’Keefe, Reinhard & Paul, Chicago — AdAge 2015 Small Agency of the Year

A few months ago, I shared some of the wisdom bestowed to me by Eric Mower, founder, chairman, and CEO of his namesake agency–advertising is challenging, emotionally and mentally taxing. While the conditions and playing field have changed over the past 47 years since Eric first opened shop, advertising remains as challenging and exciting as ever.

This week, the American Association of Advertising Agencies (4As) hosted Transformation V, a mini-conference that drew upon many of the themes and topics from the organization’s annual event of the same name. Speakers included leaders from two of the industry’s most notable independents — Walrus New York and O’Keefe, Reinhard & Paul of Chicago — and a panel comprised of Millennials working at agencies across upstate New York. Their combined insights demonstrate how advertising today is comfortingly static in some areas yet unnervingly dynamic in others.

Despite changes to clients’ corporate organizations, disruption within product categories, and a fractured media landscape, key aspects of the business remain the same as when Don Draper sold fur coats. First, who you know matters as much — if not more — than what you know. Second, knowledge of the target customer coupled with focused messaging and tactical execution remain a strong recipe for success.

What’s changed is two-fold: the type of people needed and wanted to do the work and how those people get paid for said work; in short, it’s about talent and compensation.

On the talent front, agencies are increasing their focus on non-traditional skill sets that benefit the unexpected combination of data-driven environments and human-centered storytelling. Communications experience obviously still matters, yet much of the breakthrough work shared by Walrus and O’Keefe, Reinhard & Paul exhibits more interdisciplinary collaboration comprised of talent that transcends typical work in journalism, mass communications, or marketing.

Diversity also emerged as a sub-narrative of the discussion, especially among Millennials. Doug Parton, head of talent and HR at Partners + Napier, emphasized the need for talent to reflect both the client and consumer landscape. As a Korean American, Asians represent a mere 5.7 percent of total advertising professionals. The outlook slightly improves for Hispanics and African Americans, however, much progress is still required.

When it came to talent retention, many of the Millennial panelists expressed a desire for hands-on experience, constructive feedback, and ample opportunity to learn and grow. Most Millennials also said they took it upon themselves to build and develop their own career paths.

While staffing for the work is one essential part of the equation, how agencies get paid is another equally complex issue for the advertising industry. Deacon Webster, chief creative officer, Walrus New York encouraged agencies to act creativity when it comes to business development. While retainers can provide a solid source of revenue, he noted how small projects with larger brands provide greater flexibility and more marketing-savvy clients. Regardless, he explicitly rejects hours-based billing practices alluding to its potential to commoditize great creative work.

Nick Paul, president, O’Keefe, Reinhard & Paul, shared two innovative examples of talent sourcing and compensation. First, unlike Walrus, Paul’s agency employs a highly collaborative model that relies upon partnerships with niche specialists that enable creative teams to align the right talent to the right client scenario. He coins this principle as “putting the agent in advertising agency,” which means working  on behalf of clients to assemble the best possible team.

O’Keefe, Reinhard & Paul also utilizes a base plus bonus compensation structure with clients that rewards great work for both quantitative and qualitative performance-based measures. Paul alluded to a desire to eventually adopt a model based on realized value, however, most peers in the room acknowledged the difficulty of such an approach. Nonetheless, Paul and his growing team in Chicago are helping to outline a progressive pathway that other independent agencies can follow.

By the end of Transfomation V, I was again reminded why I got into this business. It’s an exciting, always challenging, deeply-inspired and sometimes thrilling place to work that holds the potential to deeply impact the way everyday people feel, think, and act. For this Millennial, my only hope is that we can collectively transform the industry into a more inclusive place for diverse talent to be rewarded fairly for work that delivers tangible, realized value to organizations and their people.

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