Will the ad industry benefit from Big Tech layoffs?
Over the past few weeks, it seems like the party for Big Tech is over.
Amid fears of a looming recession, many of the Silicon Valley giants have announced plans to freeze hiring or lay off staff in the coming months as revenues slow and stock prices fall.
The outlook continued to worsen last week as Twitter, Meta, Google, Snap and Netflix, among others, reported disappointing second-quarter results as advertisers cut spending.
For the ad industry, which has long been losing talent to Big Tech, the layoffs and hiring freezes could present an opportunity to attract talent amid an ongoing talent shortage plaguing the the market. But the industry will have to compete with the massive salaries and endless perks that Big Tech offers to become an attractive alternative.
In a changing talent market, Campaign US asked industry leaders:
Given the war for talent, do the recent hiring and layoff freezes at major tech companies present an opportunity for the advertising industry?
Here are their answers.
Jeff Geheb, Global Experience Manager, VMLY&R
The short answer is yes. But the opportunity is nuanced in several important ways.
Every person in the advertising industry is constantly rationalizing the effect of technology companies on the business. Creative and media companies in particular cannot simply understand Big Tech on a thematic level. Agencies differentiate themselves by knowing the finer details of how platforms work and how they will innovate in the future. Talent coming directly from these companies will always be relevant and welcome!
The appeal of this talent is to get closer to how technologies present themselves in the hands of consumers. Agencies use technology — Big Tech creates it — so it’s a different skill set that’s a bit more like field medicine than a traditional academic study. For those in technology who want to use their knowledge in new and creative ways, our industry is a fantastic place to see how technology is used in the hands of the companies it was designed for.
The challenge will be to attract tech talent to the advertising industry. It’s not an intuitive place to think about supporting a technical career path. So where hard work, culture and creativity are demonstrated through the application of technology, it will attract new talent. Where our industry treats technology as a downstream consideration, it’s a drag. The agencies that take advantage of the opportunity are those where technology is in the DNA of their culture.
Alexa Zonsius, Senior Director, Creative Talents, Genuine Search Group; Partner, Allies in Recruitment
Every year we see more and more talent crossover between advertising, technology, consulting, entertainment and brand teams. If there is a pause in one sector, the others have a chance to compete for quasi-hires suddenly left in the market.
In fact, agencies stand a chance of attracting talent if they are able to pay attention to the perks that often attract talent to technology. If ad agencies can modernize their talent offerings as they compete for the best candidates, it could lead to gains in acquisition and retention.
For example, agency family leave policies are often insufficient or dependent on state benefits, and even when they are not, most are usually not fully effective until after the first year, immediately disadvantaging anyone starting a family. It forces someone to make the impossible choice between advancing their career or starting and growing their family. In an increasingly remote world, this gives tech companies a clear advantage as their advantages continue to outpace ad agencies.
Greg Paull, Co-Founder and Director, R3
The tech industry lays off [staff] because their ad revenue is down, which, in turn, will make holding companies jittery.
A much better opportunity for holding companies is to look to younger, lower-cost talent that graduates at the end of the second quarter and develops a sustainable career plan for them to enter the industry from scratch. . Marketing in 2025 will look nothing like marketing in 2015 – and it’s only through this injection of new blood that the industry can stay relevant and connected.
Lauren Hoops, Vice President and Chief Digital Officer, Moroch
With the rise of digital, ad companies have had to align their perks, benefits, office environment, and compensation with those of tech companies in order to compete with top talent. Now that this gap is closed, advertising agencies are more competitive in the job market. Add to that the hiring freeze at tech companies, and we have a level playing field.
There will always be an interest in being able to brag that you work at Google or Meta. But with a looming recession, top talent will be looking for safety above all else. If agencies can prove they’ve weathered the 2020 COVID-19 crisis well, then they’re poised to succeed with leads.
On the other hand, when ad tech giants are understaffed, ad agencies receive less support, personalized solutions, and data from their reps, putting more pressure on agencies to deliver through them. themselves while spending the same amount.
Dimi Albers, CEO, Department
Yes, it certainly has an impact on the industry. On the one hand, retaining top talent is getting a little easier without big tech companies poaching people on a daily basis. Second, people are less nervous. They see that some of their friends and former colleagues who may have jumped over to Big Tech aren’t really in greener pastures yet. And finally, competitive hiring is a little weaker now. Expectations seem to be slightly more realistic step by step.
Katy Thorbahn, Partner and Managing Director, Shiny
Recent layoffs and hiring freezes will certainly impact adland, but perhaps not in the way we anticipate. The pandemic and economic downturn may be just what the ad industry needed to attract new talent. The pandemic has made virtually everyone comfortable with distributed team members, which removes any arbitrary geographic limits on where people can live and work.
With hiring freezes in some industries, talent agencies need to continue to grow and may now see advertising as a desirable place to build a career. The challenge is to help these people see it as such. For independent agencies in particular, it is about increasing the individual impact one can have on the direction and evolution of an agency. Part of our job is to help shine a light on these long-term growth opportunities.
Bob Bailey, CEO and Founding Partner, Truth Collective
I think that’s a “hell yes” answer. The creative industry becomes more creative when it finds new pools of talent to tap into. Think about it: people in the tech industry know how to solve problems, are solution-oriented AND are systems thinkers, which means they can create at their own pace and at scale. Knowing how much of a focus the creative industry places on wellness and fighting burnout, this might be a breath of fresh air for someone in Big Tech.
Brendan Condon, Global Chief Revenue Officer, Captify
The independent advertising industry has been challenged to recruit and retain talent in part because of the overcompensation of big tech companies. This has contributed to a severe brain drain in these companies, taking away all expertise from employees and then making them expendable. We now find that such high operating expenses were unsustainable.
After years of rapid expansion and accelerated hiring, freezes, layoffs, and even rescinded offers are changing the way talent views America’s hyper-competitive tech sector. It presents an opportunity for the advertising industry to hire and retain top talent because the level playing field is level. There is a growing awareness of the value people get – through culture, innovation and career growth.
Proactive companies in the advertising industry will identify top talent. People will experience the difference between feeling like a cog in the machine and valued individuals.
George Ellis, Owner and Creative Director, Bandolier Media
Any change this substantial opens up possibilities, but in this market, possibility must be a win for talent working to find more meaning and fairness in their work.
It is always important to seek out people from different industries and disciplines. When talent helps ensure a more nuanced view of creativity, it’s a win. But what if agencies don’t have a talent plan? If an agency was expecting a massive influx of available tech talent, they probably weren’t looking for those people very hard to begin with.
This shift should remind agencies that talent doesn’t have to come from the industry. Thinking beyond traditional talent descriptions challenges island thinking. Whether it’s technology, finance, or any other industry, it’s important that an agency has a variety of skills and backgrounds beyond the rotation of characters from the usual holding company rosters. But agencies: what is your plan to unlock the potential of an outside perspective? And the talent: do they clearly explain this plan to you?
This story originally appeared on Campaign US.